Form 10-Q

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

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

As of February 28, 2007, there were 201,905,898 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 food and pet products for the U.S. retail market. The Company’s leading food brands include Del Monte, StarKist, S&W, Contadina and College Inn. In addition, the Company has pet food and pet snack brands including Meow Mix, Kibbles ‘n Bits, 9Lives, Milk-Bone, Pup-Peroni, Meaty Bone, Snausages, and Pounce. The Company acquired the Meow Mix and Milk-Bone brands during the three months ended July 30, 2006 in connection with the acquisitions discussed in Note 5. The Company also produces private label food and pet products. 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.

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 and StarKist Seafood operating segments, which manufacture, market and sell shelf-stable products, including fruit, vegetable, tomato, broth and tuna 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.

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 28, 2007 and January 29, 2006 each reflect periods that contain 13 weeks. The results of operations for the nine months ended January 28, 2007 and January 29, 2006 each reflect periods that contain 39 weeks.

The accompanying unaudited condensed consolidated financial statements of Del Monte as of January 28, 2007 and for the three and nine months ended January 28, 2007 and January 29, 2006 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 28, 2007 are not necessarily indicative of the results expected for the year ending April 29, 2007. 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 April 30, 2006 (“2006 Annual Report”). All significant intercompany balances and transactions have been eliminated.

Certain items in the consolidated financial statements of prior years have been reclassified to conform to the current year’s presentation, including the classification of certain assets, liabilities and results of operations as discontinued operations.

For a description of the Company’s stock-based incentive plans, see Note 9 of the 2006 Annual Report.

Stock-based Compensation . In December 2004, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards No. 123 (revised 2004), “Share-Based Payment” (“SFAS 123R”), which replaces FASB Statement of Financial Accounting Standards No. 123, “Accounting for Stock-Based Compensation” (“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. The Company adopted the provisions of SFAS 123R as of May 1, 2006 and has elected to use the modified prospective transition method of adoption.

Prior to May 1, 2006, the Company followed the fair value recognition provisions of SFAS 123, to account for its stock-based compensation effective at the beginning of fiscal 2004. The Company elected the prospective method of transition as permitted by FASB Statement of Financial Accounting Standards No. 148, “Accounting for Stock-Based Compensation—Transition and Disclosure” (“SFAS 148”). Effective April 28, 2003, future employee stock option grants and other stock-based compensation were expensed over the vesting period, based on the fair value at the time the stock-based compensation was granted.

The fair value for stock options granted subsequent to April 28, 2003 was estimated at the date of grant using a Black-Scholes option-pricing model. The following table presents the weighted average assumptions for the nine months ended January 28, 2007 and January 29, 2006:

SFAS 123R requires disclosure of pro forma information for periods prior to adoption. The pro forma disclosures are based on the fair value of awards at the grant date, which is amortized to expense over the service period. The following table illustrates the effect on prior period net income and earnings per share if the Company had accounted for all its employee stock options under the fair value method of SFAS 123R:

Stock option activity and related information during the period indicated was as follows:

As of January 28, 2007, the aggregate intrinsic values of options outstanding and options exercisable were $24.3 and $17.7, respectively.

At January 28, 2007, the range of exercise prices and weighted-average remaining contractual life of outstanding options was as follows:

Other stock-based compensation activity and related information during the period indicated was as follows:

In July 2006, the FASB issued Interpretation No. 48, “Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109,” (“FIN 48”), which seeks to reduce the diversity in practice associated with the accounting and reporting for uncertainty in income tax positions. This interpretation prescribes a comprehensive model for the financial statement recognition, measurement, presentation and disclosure of uncertain tax positions taken or expected to be taken in income tax returns. An uncertain tax position will be recognized if it is determined that it is more likely than not to be sustained upon examination. The tax position is measured as the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. The cumulative effect of applying the provisions of this interpretation is to be reported as a separate adjustment to the opening balance of retained earnings in the year of adoption. FIN 48 is effective for fiscal years beginning after December 15, 2006 and the Company plans to adopt the pronouncement in the first quarter of fiscal 2008. The Company is in the process of evaluating the impact of the adoption of FIN 48 on its consolidated financial statements.

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (“SFAS 157”). SFAS 157 defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles, and expands disclosures about fair value measurements. The provisions of SFAS 157 are effective for fiscal years beginning after November 15, 2007. The Company will adopt the provisions of SFAS 157 for its fiscal year beginning April 28, 2008. The Company is currently evaluating the impact of the provisions of SFAS 157 on its consolidated financial statements.

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans” (“SFAS 158”). SFAS 158 requires an entity to recognize in its balance sheet the funded status of its defined benefit postretirement plans, measured as the difference between the fair value of the plan assets and the benefit obligation, and to recognize changes in the funded status of a defined benefit postretirement plan within accumulated other comprehensive income, to the extent such changes are not recognized in earnings as a component of net periodic benefit cost. It also requires an entity to measure defined benefit plan assets and obligations as of the date of the employer’s fiscal year-end statement of financial position. The recognition provisions of SFAS 158 are to be applied prospectively and are effective for fiscal years ending after December 15, 2006. The measurement provisions are effective for fiscal years ending after December 15, 2008. The Company will adopt the recognition provisions of SFAS 158 as of April 29, 2007. The Company intends to adopt the measurement provisions of SFAS 158 as of May 3, 2009. The Company does not expect the adoption of the recognition provisions on April 29, 2007 to have a significant impact on its consolidated balance sheet, and is currently evaluating the impact of the measurement provisions of SFAS 158 on its consolidated financial statements.

In September 2006, the Securities and Exchange Commission (“SEC”) issued Staff Accounting Bulletin No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements” (“SAB 108”). SAB 108 requires analysis of misstatements using both an income statement (rollover) approach and a balance sheet (iron curtain) approach in assessing materiality and provides for a one-time cumulative effect transition adjustment. SAB 108 is effective for annual financial statements for the first fiscal year ending after November 15, 2006. The Company will adopt the provisions of SAB 108 as of April 29, 2007. The Company currently believes that the adoption of

SAB 108 will have no impact on its consolidated financial statements, although the Company will continue evaluating SAB 108 until its adoption on April 29, 2007.

On April 24, 2006, pursuant to an Asset Purchase Agreement dated March 1, 2006 between, Del Monte Corporation (“DMC”), a direct wholly-owned subsidiary of Del Monte Foods Company (“DMFC”), and TreeHouse Foods, Inc. (“TreeHouse”), DMC sold to TreeHouse certain real estate, equipment, machinery, inventory, raw materials, intellectual property and other assets that were primarily related to the Company’s (1) private label soup business, (2) infant feeding business conducted under the brand name Nature’s Goodness, and (3) the food service soup business (collectively, the “Soup and Infant Feeding Businesses”). Under the terms of the Asset Purchase Agreement, TreeHouse also assumed certain liabilities to the extent related to the Soup and Infant Feeding Businesses. The divestiture of the Soup and Infant Feeding Businesses included the sale of Del Monte’s manufacturing facility and distribution center in Pittsburgh, PA and certain manufacturing assets associated with the private label soup business located at the Mendota, IL facility. Upon closing of the divestiture, approximately 790 of Del Monte’s plant employees and approximately 120 additional Del Monte employees joined TreeHouse. In the fourth quarter of fiscal 2006, the Company recognized a gain on the sale. Due to revisions of estimates during the nine months ended January 28, 2007, the Company recognized additional pre-tax net costs of $0.5 related to the Soup and Infant Feeding Businesses. During a transition period, not to exceed twelve months after the closing date, the Company is providing transition services for the buyer, including accounting, financial reporting, customer service, billing, transportation, warehousing and certain information technology services. For all periods presented, the operating results and assets and liabilities related to the Soup and Infant Feeding Businesses have been classified as discontinued operations.

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 manufactured certain products for the buyer. The Company also performed certain transition services for the buyer during agreed-upon post-closing periods. During the period ended October 30, 2005, the Company completed the sale of the remaining assets then included in discontinued operations, primarily consisting of the Canadian production facility. The Company recognized a $0.5 loss on the sale of the assets, which was offset by a non-cash gain of $2.7 due to the reversal of the cumulative foreign currency translation adjustment resulting from the substantial liquidation of the assets of its Canadian subsidiary due to the sale of the production facility. For all periods presented, the operating results related to the 2004 Asset Sale and other operating results from a related Canadian production facility have been classified as discontinued operations.

Net sales from discontinued operations were $1.2 and $1.1 during the three and nine months ended January 28, 2007, respectively. Net sales from discontinued operations for the three and nine months ended January 28, 2007 are primarily related to minor activities and changes in estimates as the Company performs the final wind-down of items related to the Soup and Infant Feeding Businesses. Net sales from discontinued operations were $88.9 and $244.6 for the three and nine months ended January 29, 2006, respectively.

On May 19, 2006, DMC completed the acquisition of Meow Mix Holdings, Inc. and its subsidiaries (“Meow Mix”), the maker of Meow Mix brand cat food and Alley Cat brand cat food. The total cost of the acquisition was $721.8 as of January 28, 2007 and consisted of an initial $705.6 cash payment, an additional $3.2 cash payment related to a post-closing working capital adjustment and direct transaction and other costs of $13.0. This acquisition cost includes severance-related and relocation costs of $4.4, of which $0.1 and $4.3 were paid during the three and nine months ended January 28, 2007, respectively. Accordingly, as of January 28, 2007, the Company had $0.1 of accrued severance-related and relocation costs related to the acquisition. The financial results of Meow Mix are reported within the Pet Products reportable segment.

Effective July 2, 2006, DMC completed the acquisition of certain pet product assets, including the Milk-Bone brand (“Milk-Bone”), from Kraft Foods Global, Inc. The total cost of the acquisition was $593.0 as of January 28, 2007, and consisted of an initial $580.2 cash payment, an additional $2.3 cash payment related to a post-closing inventory adjustment and direct transaction and other costs of $10.5. This acquisition cost includes severance-related and relocation costs of $0.2 of which $0 and $0.1 were paid during the three and nine months ended January 28, 2007, respectively. Accordingly, as of January 28,

2007, the Company had $0.1 of accrued severance-related and relocation costs related to the acquisition. The financial results of Milk-Bone are reported within the Pet Products reportable segment.

The acquisitions are being accounted for under the purchase method of accounting. The purchase prices were allocated to the net assets acquired based upon estimated fair market values at the respective dates of acquisition. The Company utilized independent valuation firms to assist in estimating the fair value of the acquired businesses’ real estate, machinery and equipment and identifiable intangible assets. The Company’s allocation of purchase price to the net tangible and intangible assets acquired and liabilities assumed is as follows as of January 28, 2007:

Further changes to the fair values of the assets acquired and liabilities assumed may be recorded as the Company receives further information during the remainder of fiscal 2007.

The Company executed the acquisitions of Meow Mix and Milk-Bone with the objective of providing its pet business with an improved competitive position, including an improved platform for developing innovative and successful products, and enhancing the Company’s overall gross margins, building on its long-term strategy designed to fortify the Company’s position as a leading branded marketer of quality food and pet products in the U.S. retail market.

The results of operations for Meow Mix and Milk-Bone are included in the Pet Products reportable segment beginning May 19, 2006 and July 2, 2006, respectively. The following unaudited pro forma financial information presents the combined results of operations of the Company, including Meow Mix and Milk-Bone, as if the acquisitions had occurred as of the beginning of the periods presented. The unaudited pro forma financial information is not intended to represent or be indicative of the Company’s consolidated financial results of operations that would have been reported had the business combinations been completed as of the beginning of the periods presented and should not be taken as indicative of the Company’s future consolidated results of operations:

During the nine months ended January 28, 2007, the Company’s goodwill and intangible assets increased by $1,272.0 due to the acquisitions (see Note 5) which was offset by a decrease of $2.8 due to other changes. Further changes to goodwill and intangible assets may be recorded as the purchase price allocations for the acquisitions are finalized during the remainder of fiscal 2007.

As of January 28, 2007, the Company’s goodwill was comprised of $200.1 related to the Consumer Products reportable segment and $1,190.8 related to the Pet Products reportable segment. As of April 30, 2006, the Company’s goodwill was comprised of $202.9 related to the Consumer Products reportable segment and $555.8 related to the Pet Products reportable segment.

Amortization expense for the three and nine months ended January 28, 2007 was $2.1 and $5.9, respectively, and $0.9 and $2.7 for the three and nine months ended January 29, 2006, respectively. The Company expects to recognize $2.1 of amortization expense during the remainder of fiscal 2007. The following table presents expected amortization of intangible assets as of January 28, 2007, for each of the five succeeding fiscal years:

Included in prepaid expenses and other current assets are certain real properties that were classified as assets held for sale. Assets held for sale totaled $3.2 and $10.0 as of January 28, 2007 and April 30, 2006, respectively. During the three and nine months ended January 28, 2007, the Company sold $6.8 and $10.6 of assets held for sale, respectively, and recognized gains of $0.7 and $1.1 on the sales in those periods, respectively. During the nine months ended January 29, 2006, the Company sold $22.8 of assets held for sale and recognized a gain of $0.5 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 awards.

Options outstanding in the aggregate amounts of 6,560,422 and 7,749,671 were not included in the computation of diluted earnings per share for the three and nine months ended January 28, 2007, respectively, because their inclusion would be antidilutive. Options outstanding in the aggregate amounts of 8,397,714 and 8,613,733 were not included in the computation of diluted earnings per share for the three and nine months ended January 29, 2006, respectively, because their inclusion would be antidilutive.

On May 19, 2006, the Company entered into an amendment of its senior credit facility (the “Second Amendment”). The Second Amendment, among other things, increased the existing Term Loan B facility commitments and revolving credit facility (the “Revolver”) commitments in order to provide funding for the Meow Mix and Milk-Bone acquisitions. On the effective date of the Second Amendment, DMC borrowed an additional $65.0 in Term B loans and $125.0 under its revolving credit facility to provide a portion of the funding for the consummation on such date of the Meow Mix acquisition and the payment of related fees and expenses. On July 3, 2006, DMC borrowed an additional $580.0 in Term B loans and $13.0 under its revolving credit facility to provide the funding for the Milk-Bone acquisition and to fund transaction related expenses.

Upon consummation of the Meow Mix acquisition, the Meow Mix entities acquired by Del Monte, in addition to the existing subsidiary guarantors, guaranteed DMC’s obligations under the 8⁵/8% senior subordinated notes and the 6³/4% senior subordinated notes and DMC’s obligations under the Amended Senior Credit Facility.

On August 15, 2006, the Company entered into a third amendment of its senior credit facility (as amended through August 15, 2006, the “Amended Senior Credit Facility”). On the effective date of the amendment, DMC borrowed an additional $100.0 in Term B loans, which proceeds (net of fees and expenses) were used to reduce the then-outstanding balance of the Revolver. The new Term B loans amortize on a pro rata basis with the existing Term B loans, and the other terms and conditions of the new Term B loans (including without limitation the applicable interest rate) are the same as the terms and conditions set forth in the Amended Senior Credit Facility applicable to the existing Term B loans.

The Company borrowed $169.3 from the Revolver during the three months ended January 28, 2007. A total of $271.7 was repaid during the three months ended January 28, 2007. During the nine months ended January 28, 2007, the Company borrowed $738.4 from the Revolver and repaid $552.1. As of January 28, 2007, the net availability under the Revolver, reflecting $47.8 of outstanding letters of credit, was $215.9. The blended interest rate on the Revolver was approximately 7.24% on January 28, 2007.

The Company is scheduled to repay $4.8 of its long-term debt during the remainder of fiscal 2007. Scheduled maturities of long-term debt for each of the five succeeding fiscal years are as follows:

Agreements relating to the Company’s long-term debt, including the Amended Senior Credit Facility and the indentures governing the senior subordinated notes, contain covenants that restrict the ability of DMC 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 DMFC. Del Monte is required to meet a maximum leverage ratio and a minimum fixed charge coverage ratio under the Amended Senior Credit Facility. The Second Amendment increased the maximum permitted leverage ratio in effect through the term of the Amended Senior Credit Facility and decreased the minimum fixed charge coverage ratio in effect through the term of the Amended Senior Credit Facility. The maximum permitted leverage ratio decreases over time and the minimum fixed charge coverage ratio increases over time, as set forth in the Amended Senior Credit Facility. As of January 28, 2007, the Company believes that it is in compliance with all such financial covenants.

On June 22, 2006, the Company announced a transformation plan, which was approved by the Strategic Committee of the Company’s Board of Directors on June 20, 2006, pursuant to authority granted to such Strategic Committee by the Company’s Board of Directors. The transformation plan is intended to further the Company’s progress against its strategic goal of becoming a more value-added consumer packaged food company. The plan’s initiatives are focused on strengthening systems and processes, streamlining the organization and leveraging the scale efficiencies expected from the acquisitions of Meow Mix and Milk-Bone.

During the quarter ended July 30, 2006, the Company communicated to affected employees that their employment would be terminated as part of the transformation plan. Termination benefits and severance costs are expensed as part of selling, general and administrative expense and are recorded as corporate expenses, as it is the Company’s policy to record such restructuring expenses as corporate expenses.

The following table reconciles the beginning and ending accrued transformation-related termination and severance costs:

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”). During the fiscal years ended May 1, 2005 and 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 were expensed as part of selling, general and administrative expense. As of April 30, 2006, the Company had $0.5 of accrued Merger-related termination and severance costs. None of these costs were paid during the three months ended January 28, 2007. During the nine months ended January 28, 2007, $0.3 of these

costs were paid. During the three months ended January 28, 2007, the Company reversed the remaining $0.2 of accrued termination and severance costs related to the Merger.

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 for the three and nine months ended January 28, 2007 and January 29, 2006, respectively, are as follows:

The Company made cash contributions of $15.0 to the defined benefit pension plans during the second quarter of fiscal 2007. The Company expects to make an additional cash contribution of approximately $1.9 to the defined benefits plans during the fourth quarter of fiscal 2007.

In August 2006, the Pension Protection Act of 2006 (the “Act”) was signed into law. This legislation will ultimately result in accelerated rates of funding to the Company’s defined benefit pension plans and encourages employers to fully fund their defined benefit pension plans by 2011 by imposing certain consequences beginning in calendar 2008 for plans that do not meet certain funding levels. The Company currently expects to make a minimum contribution of approximately $16 in fiscal 2008. As a result of the Act, the Company is evaluating whether or not it will make an additional contribution in fiscal 2008 in excess of the minimum, which excess amount the Company believes could approximate $30 to $50. If the Company does not make an additional contribution in fiscal 2008, among other things, more frequent contributions (quarterly instead of annually), additional contributions in fiscal 2009 and beyond, and agreements with the Pension Benefit Guarantee Corporation may be required, and the form of benefit payments to participants could be impacted. The Company continues to analyze the full impact of this law on the Company’s financial position, results of operations and cash flows. Refer to Note 11 of the 2006 Annual Report for a description of the Company’s defined benefit pension plans.

Except as set forth below, there have been no material developments in the Company’s legal proceedings since the legal proceedings reported in the Company’s 2006 Annual Report:

The Company filed a Notice of Arbitration with the American Arbitration Association (“AAA”) on February 15, 2006, which initiated arbitration proceedings against Pacer Global Logistics. The Company alleged that Pacer breached the Logistics Services Agreement entered into between the companies on April 4, 2005, effective as of March 4, 2005. Pacer filed a Demand for Arbitration with AAA on March 8, 2006, as amended on April 4, 2006, in which Pacer asserted claims against

the Company for breach of the Pacer Agreement. The Company has denied Pacer’s claims. The arbitration hearing occurred in December 2006 during which Pacer sought declaration of its ability to terminate the Pacer Agreement, damages of $21.0 and attorney fees, expert fees and interest. Final arguments were held on February 9, 2007 and the arbitrator is expected to issue a decision on or before March 31, 2007. The Company believes it has accrued adequate reserves to cover any material liability in this matter. Although the parties have been unable to negotiate a formal termination of the Pacer Agreement, the Company began using a different transportation services provider beginning on May 1, 2006.

The Company is a defendant in an action brought by the Public Media Center in the Superior Court in San Francisco, CA, on December 31, 2001. 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 sought 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 disputed the plaintiff’s allegations. This case was consolidated with the California Attorney General case described below and trial began on October 18, 2005. The court issued a decision in favor of the Company on May 11, 2006. As noted below, on August 18, 2006, the Attorney General filed a Motion to Reopen Trial to Present New Evidence. On September 29, 2006, the court issued a decision denying the Attorney General’s Motion to Reopen Trial. The court entered a final judgment in favor of the Company on November 21, 2006. Public Media Center filed a Notice of Appeal on January 26, 2007.

The Company is a defendant in an action brought by the California Attorney General in the Superior Court in San Francisco, CA, 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 sought 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 disputed the Attorney General’s allegations. This case was consolidated with the Public Media Center case described above and trial began on October 18, 2005. The court issued a decision in favor of the Company on May 11, 2006. On August 18, 2006, the Attorney General filed a Motion to Reopen Trial to Present New Evidence. On September 29, 2006, the court issued a decision denying the Attorney General’s Motion to Reopen Trial. The court entered a final judgment in favor of the Company on November 21, 2006. The Attorney General filed a Notice of Appeal on January 18, 2007.

The Company was 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. 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 alleged 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 sought compensatory damages of at least $22.0, plus punitive damages. On December 9, 2004, the Company agreed to a settlement with PPI Enterprises. Counter-claims against the Company by two third-parties in the amount of $1.4 remained after the settlement with PPI Enterprises. The court granted the Company’s motion for summary judgment against these third-parties on November 28, 2005. The third-parties appealed that decision. The Company settled with one of the third-parties on March 14, 2006 and that third-party withdrew its appeal. On September 27, 2006, the appeals court heard argument in connection with the remaining appeal and on November 20, 2006 denied that appeal and upheld the trial court’s decision granting summary judgment in favor of the Company.

The Company is a defendant in an action filed in the Superior Court in Middlesex, NJ, on May 15, 2006. The complaint alleges that four-packs of StarKist albacore tuna wrapped in shrink-wrap were mislabeled because the nutritional information on the shrink-wrap was different from the nutritional information on the individual cans. The complaint alleges several causes of action including consumer fraud, violations of the New Jersey Truth-in-Consumer Contract, Warranty and Notice Act and unjust enrichment and seeks compensatory, punitive and treble damages. The complaint seeks certification of this matter as a class action. The Company has negotiated a tentative settlement with the plaintiff’s counsel, currently expected to be less than $0.1, and believes it has accrued adequate reserves to cover the settlement of this matter.

Del Monte is also involved from time to time in various legal proceedings incidental to its business, including proceedings involving product liability claims, worker’s compensation and other employee claims, tort and other general liability claims, for which the Company carries insurance, as well as trademark, copyright, patent infringement and related litigation. While it is not feasible to predict or determine the ultimate outcome of these matters, the Company believes that none of these legal proceedings will have a material adverse effect on its financial position.

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:

In connection with its accelerated stock buyback (“ASB”), the Company entered into certain arrangements with Goldman Sachs International (“Goldman Sachs”), including a purchase price adjustment. On October 25, 2006, such arrangements terminated in accordance with their terms. As a result, the aggregate amount required to be paid to Goldman Sachs, which included the amount of the price adjustment for the shares purchased by Goldman Sachs based on their actual cost to purchase the shares in the open market between December 22, 2005 and October 25, 2006, was approximately $6.6 and was paid in cash on October 30, 2006.

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 April 30, 2006 (the “2006 Annual Report”). These historical financial statements may not be indicative of our future performance. This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains a number of forward-looking statements, all of which are based on our current expectations and could be affected by the uncertainties and risks described in Item 1A. “Risk Factors” in our 2006 Annual Report and in Part II of this quarterly report on Form 10-Q.

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 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 Meow Mix, Kibbles ‘n Bits, 9Lives, Milk-Bone, Pup-Peroni, Meaty Bone, Snausages and Pounce. We acquired the Meow Mix and Milk-Bone brands during the three months ended July 30, 2006, in connection with the acquisitions discussed below.

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 and StarKist Seafood operating segments, which manufacture, market and sell branded and private label shelf-stable products, including fruit, vegetable, tomato, broth and tuna products. The Pet Products reportable segment includes the Pet Products operating segment, which manufactures, markets and sells branded and private label dry and wet pet food and pet snacks.

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 $907.2 million, which represent growth of 14.9% over the third quarter of fiscal 2006. The Meow Mix and Milk-Bone acquisitions, which were completed during the first quarter and are discussed further below, drove growth of 15.7%. In addition, volume growth from new products contributed 3.7% to sales growth. Pricing, net of associated volume loss or “elasticity,” was flat. Reduced fruit volume from historically lower margin products and lower merchandising, both due to limited fruit supply, negatively impacted net sales. In addition, volume loss associated with sales declines in fruit products due to the second quarter 2007 customer purchases in advance of price increases, competitive factors affecting certain of our existing products, and other factors as discussed in “Results of Operations—Net Sales” below also negatively impacted net sales. Overall, reduced volume negatively impacted net sales by 4.5%.

Unusual weather conditions in California affecting the 2006 summer growing cycle resulted in reduced yields, and accordingly, increased raw product and other related costs for peaches and tomatoes. During the third quarter of fiscal 2007, pricing actions, combined with our cost saving efforts, fully offset inflationary and other cost increases. For the remainder of fiscal 2007, we expect that raw product and other related costs, particularly in connection with our crop-based products, as well as tinplate and other packaging costs and transportation-related costs, will continue to be higher than the prior year.

Our third quarter operating income was $110.5 million, which represented an increase of $18.0 million or 19.5% compared to the third quarter of fiscal 2006. Operating margin increased by 50 basis points to 12.2% for the third quarter of fiscal 2007. The increase in both operating income and operating margin was driven by the acquisitions, partially offset by decreased operating income in the StarKist Seafood operating segment due to higher fish, can and energy costs and lower volume from higher pricing and lower levels of merchandising. In addition, we incurred $6.9 million in expenses during the third quarter of fiscal 2007 related to the transformation plan described below and $2.3 million of integration expense associated with the acquisition of Meow Mix and Milk-Bone, as compared to no integration or transformation expense for the three months ended January 29, 2006. We expect to see continued softness in the tuna category in the fourth quarter of fiscal 2007.

We incurred $42.2 million in interest expense in the third quarter of fiscal 2007 as compared to $22.7 million in the third quarter of fiscal 2006, driven by higher average debt levels as well as higher interest rates. We expect that our interest expense for the remainder of fiscal 2007 will continue to be higher than in fiscal 2006 as a result of the higher debt levels related to the Meow Mix and Milk-Bone acquisitions and higher interest rates.

On May 19, 2006, we completed the acquisition of Meow Mix Holdings, Inc. and its subsidiaries (“Meow Mix”), the maker of Meow Mix brand cat food and Alley Cat brand cat food. The total cost of the acquisition was $721.8 million as of January 28, 2007 and consisted of an initial $705.6 million cash payment, an additional $3.2 million cash payment related to a post-closing working capital adjustment and direct transaction and other costs of $13.0 million. This acquisition cost includes severance-related and relocation costs of $4.4 million, of which $0.1 million and $4.3 million were paid during the three and nine months ended January 28, 2007, respectively. Accordingly, as of January 28, 2007, we had $0.1 million of accrued severance-related and relocation costs related to the acquisition. We funded the Meow Mix acquisition with proceeds from the divestiture of the Soup and Infant Feeding Businesses, as well as with cash from operations and additional debt. The financial results of Meow Mix are reported within our Pet Products reportable segment.

Effective July 2, 2006, we completed the acquisition of certain pet product assets, including the Milk-Bone brand (“Milk-Bone”), from Kraft Foods Global, Inc. The total cost of the acquisition was $593.0 million as of January 28, 2007 and consisted of a $580.2 million cash payment, an additional $2.3 million cash payment related to a post-closing inventory adjustment and direct transaction and other costs of $10.5 million. This acquisition cost includes severance-related and relocation costs of $0.2 million, of which $0 and $0.1 million were paid during the three and nine months ended January 28, 2007. Accordingly, as of January 28, 2007, we had $0.1 million of accrued severance-related and relocation costs related to the acquisition. We funded the Milk-Bone acquisition with additional debt. The financial results of Milk-Bone are reported within our Pet Products reportable segment.

We executed the acquisitions of Meow Mix and Milk-Bone with the objective of providing our pet business with an improved competitive position, including an improved platform for developing innovative and successful products, and enhancing our overall gross margins, building on our long-term strategy designed to fortify our position as a leading branded marketer of quality food and pet products in the U.S. retail market.

On June 22, 2006, we announced a transformation plan to further our progress against our strategic goal of becoming a more value-added consumer packaged food company. The plan’s initiatives, which are focused on strengthening systems and processes, streamlining the organization and leveraging the scale efficiencies expected from the recent pet acquisitions noted above, are anticipated to improve our competitiveness and enhance our overall performance.

We expect to incur total pre-tax costs associated with these initiatives from inception through the end of fiscal 2008 of approximately $110 million, including $60 million in anticipated capital expenditures and $10 million of non-cash expenses. As of January 28, 2007, we have incurred approximately $38.9 million of these expected pre-tax costs, including approximately $11.4 million of capital expenditures and $6.8 million of non-cash expenses. We have begun to generate savings in fiscal 2007, and expect to capture approximately $40 million of pre-tax savings in fiscal 2008 and approximately $50 million in fiscal 2009.

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 reevaluate our estimates, including those related to trade promotions, retirement benefits, goodwill and intangibles, and retained-insurance liabilities. Estimates in the assumptions used in the valuation of our stock option expense are updated periodically and reflect conditions that existed at the time of each new issuance of stock options. 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 therefore, these estimates routinely require adjustment.

Management has discussed the selection of critical accounting policies and estimates with the Audit Committee of the Board of Directors, 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 Consolidated Financial Statements included in our 2006 Annual Report. The following is a summary of the more significant judgments and estimates used in the preparation of our consolidated financial statements:

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 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 28, 2007 and January 29, 2006 resulted in net reductions to the trade promotion liability and increases in net sales from continuing operations of approximately $6.0 million and $3.5 million, respectively, which related to prior year activity. The nine month impact from these evaluations resulted in net reductions to the trade promotion liability and increases in net sales from continuing operations of approximately $6.1 million and $3.2 million for the nine months ended January 28, 2007 and January 29, 2006 respectively, which related to prior year activity.

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.

Our Assumptions. 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:

These assumptions reflect our historical experience and our best judgment regarding future expectations. The assumptions, the plan assets and the plan obligations are used to measure our annual DB plans benefits expense and other benefits expense.

Since the DB plans benefits and other benefits liabilities are measured on a discounted basis, the discount rate is a significant assumption. The discount rate was determined based on an analysis of interest rates for high-quality, long-term corporate debt at each measurement date. The discount rate used to determine DB plans and other benefits projected benefit obligation as of the balance sheet date is the rate in effect at the measurement date. The same rate is also used to determine DB plans and other benefits expense for the following fiscal year. The long-term rate of return for DB plans’ assets is based on our historical experience, our DB plans’ investment guidelines and our expectations for long-term rates of return. 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 28, 2007, we recognized DB plans benefits expense of $3.0 million and $9.2 million, respectively, and a reduction of other benefits expense of $0.1 million and $0.3 million, respectively. Our remaining fiscal 2007 DB plans benefits expense is currently estimated to be approximately $3.1 million. We expect to recognize no additional reduction to other benefits expense in fiscal 2007. 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, in accordance with Financial Accounting Standards Board (“FASB”) Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets,” 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 and other intangibles, based on estimated fair value, with any remaining purchase price recorded as goodwill.

We have evaluated our capitalized 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. We review the asset groups containing Amortizing Brands (including related tangible assets) for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable in accordance with FASB Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.” An asset or asset group is considered impaired if its carrying amount exceeds the undiscounted future net cash flow the asset or asset group is expected to generate. If an asset or asset group is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds its fair value. Non-Amortizing Brands and goodwill are not amortized, but are instead tested for impairment at least annually. 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.

We engaged third-party valuation experts to assist in the valuation of identifiable intangible assets, consisting of brands and customer relationships, acquired in connection with the Meow Mix and Milk-Bone acquisitions discussed above.

Considerable management judgment is necessary in estimating future cash flows, market interest rates, discount factors and other factors affecting the valuation of goodwill and intangibles, including the operating and macroeconomic factors that may affect them. We use historical financial information, internal plans and projections, and industry information 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 28, 2007 and January 29, 2006. 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 certain 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 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 (as defined in our stock incentive plans). Typically, these 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.

Fair Value Method of Accounting. In December 2004, the FASB issued Statement of Financial Accounting Standards No. 123 (revised 2004), “Share-Based Payment” (“SFAS 123R”), which replaces FASB Statement of Financial Accounting Standards No. 123, “Accounting for Stock-Based Compensation” (“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. We adopted the provisions of SFAS 123R as of May 1, 2006 and have elected to use the modified prospective transition method of adoption.

Prior to May 1, 2006, we followed the fair value recognition provisions of SFAS 123, to account for our stock-based compensation effective at the beginning of fiscal 2004. We elected the prospective method of transition as permitted by FASB Statement of Financial Accounting Standards No. 148, “Accounting for Stock-Based Compensation—Transition and Disclosure.” Effective April 28, 2003, future employee stock option grants and other stock-based compensation were expensed over the vesting period, based on the fair value at the time the stock-based compensation was granted.

Our Assumptions. Under the fair value method of accounting for stock-based compensation, we measure stock option expense at the date of grant using the Black-Scholes valuation model. This model estimates the fair value of the options based on a number of assumptions, such as interest rates, employee exercises, the current price and expected volatility of our common stock and expected dividends, if any. The expected life is a significant assumption as it determines the period for which the risk-free interest rate, volatility and dividend yield must be applied. The expected life is the average length of time in which we expect our employees to exercise their options. The risk-free interest rate is based on the expected U.S. Treasury rate over the expected life. Expected stock volatility reflects movements in our stock price over a historical period that matches the expected life of the options. In the first quarter of fiscal 2007, we changed the dividend yield assumption from 0.9% to 1.4% based on our recent history of paying quarterly dividends beginning in the third quarter of fiscal 2006 and our expectation that the Board of Directors will continue to declare quarterly dividends at the same rate for the expected life of options granted.

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. For example, the deductible under our loss-sensitive worker’s compensation insurance policy is up to $0.5 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:

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 28, 2007 and January 29, 2006 we experienced no significant adjustments to our estimates.

The following discussion provides a summary of operating results for the three and nine months ended January 28, 2007, compared to the results for the three and nine months ended January 29, 2006.

Net sales for the three months ended January 28, 2007 were $907.2 million, an increase of $117.6 million, or 14.9%, compared to $789.6 million for the three months ended January 29, 2006. Net sales for the nine months ended January 28, 2007 were $2,474.8 million, an increase of $275.4 million, or 12.5%, compared to $2,199.4 million for the nine months ended January 29, 2006.

Net sales in our Consumer Products reportable segment were $551.0 million for the three months ended January 28, 2007, a decrease of $11.3 million or 2.0% compared to the three months ended January 29, 2006. Volume declines, primarily related to lower volumes in both our Del Monte Brands and StarKist Seafood operating segments were partially offset by increased pricing and increased volume in new products. The Del Monte Brands operating segment had sales of $428.0 million for the quarter, a decrease of $7.7 million, or 1.8%, compared to the same period a year ago. The effect of decreased volume, primarily due to second quarter customer purchases of fruit products in advance of price increases and the sale of our S&W Bean business in the first quarter, was partially offset by price increases and increased volume in new products. Reduced fruit volume from historically lower margin products and lower merchandising, both due to limited fruit supply, also contributed to the decline. The StarKist Seafood operating segment had sales of $123.0 million for the quarter, a decrease of $3.6 million, or 2.8%, compared to the same period a year ago. Net sales for the StarKist Seafood operating segment decreased due to sales volume decreases of chunk light products as we believe consumers reacted to higher prices. In addition, we experienced market share erosion in chunk light products. Pouch product sales also declined, reflecting overall category softness and less display activity at a major customer. This decrease was partially offset by increases due to pricing.

Net sales in our Consumer Products reportable segment were $1,538.1 million for the nine months ended January 28, 2007, a decrease of $30.8 million or 2.0% compared to the nine months ended January 29, 2006. Volume declines, primarily related to lower volumes in both our Del Monte Brands and StarKist Seafood operating segments were partially offset by increased pricing and increased volume in new products. The Del Monte Brands operating segment had sales of $1,147.8 million for the nine-month period, a decrease of $13.9 million, or 1.2%, compared to the same period a year ago. The effect of decreased volume, primarily due to the sale of our S&W Bean business, was partially offset by price increases and increased volume in new products. The StarKist Seafood operating segment had sales of $390.3 million for the nine-month period, a decrease of

$16.9 million, or 4.2%, compared to the same period a year ago. Net sales for the StarKist Seafood operating segment decreased due to sales volume decreases of chunk light products as we believe consumers reacted to higher prices. In addition, we experienced market share erosion in chunk light products. Pouch product sales also declined, reflecting overall category softness and less display activity at a major customer. This decrease was partially offset by increases due to pricing.

Net sales in our Pet Products reportable segment were $356.2 million for the three months ended January 28, 2007, an increase of $128.9 million or 56.7% compared to $227.3 million for the three months ended January 29, 2006. The increase was primarily driven by $124.1 million in sales from the acquisitions. New products in dry dog food and pet snacks, as well as a shift in promotional timing from fourth quarter fiscal 2007 to third quarter fiscal 2007 and pricing, also benefited net sales. These increases were partially offset by volume loss related to price elasticity and lower pet food volume in certain existing products, driven primarily by competitive merchandising related to the May 2006 price increases impacting dry dog food.

For the nine months ended January 28, 2007, net sales in our Pet Products reportable segment were $936.7 million, an increase of $306.2 million or 48.6% compared to $630.5 million for the nine months ended January 29, 2006. The increase was primarily driven by $299.2 million in sales from the acquisitions. New products in dry dog food and pet snacks, as well as pricing, also benefited net sales. These increases were partially offset by volume loss related to price elasticity and lower pet food volume in certain existing products, driven primarily by competitive merchandising related to the May 2006 price increases impacting dry dog food.

Cost of products sold. Cost of products sold for the three months ended January 28, 2007 was $654.0 million, an increase of $82.7 million, or 14.5%, compared to $571.3 million for the three months ended January 29, 2006. The cost of products sold for the nine months ended January 28, 2007 was $1,812.7 million, an increase of $194.1 million, or 12.0%, compared to $1,618.6 million for the nine months ended January 29, 2006. These increases were due to increased sales volumes resulting from the acquisitions and new products, as well as continued cost increases. Our cost increases were primarily due to higher ingredient, commodity and raw product and other related costs, particularly in connection with fish and crop-based products, as well as higher tinplate and other packaging costs and higher transportation-related costs.

Gross margin. Our gross margin percentage for the three months ended January 28, 2007 increased 0.3 points to 27.9%, compared to 27.6% for the three months ended January 29, 2006. Consistent with our acquisition objective of raising our overall gross margin, the acquisitions benefited gross margin by 1.8 points. In addition, net pricing benefited gross margin by 2.1 margin points. These benefits were almost entirely offset by a 3.1 margin point reduction related to the higher costs noted above and a 0.5 margin point reduction due to product mix.

For the nine months ended January 28, 2007, our gross margin percentage increased by 0.4 points to 26.8%, compared to 26.4% for the nine months ended January 29, 2006. Acquisitions benefited gross margin by 2.0 points and net pricing benefited gross margin by 1.6 margin points. These benefits were almost entirely offset by a 3.1 margin point reduction related to the higher costs noted above and a 0.1 margin point reduction due to product mix.

Selling, general and administrative expense. Selling, general and administrative (“SG&A”) expense for the three months ended January 28, 2007 was $142.7 million, an increase of $16.9 million, or 13.4%, compared to SG&A of $125.8 million for the three months ended January 29, 2006. This increase was primarily driven by incremental SG&A costs associated with the acquired businesses, including marketing expenses in the Pet Products reportable segment as a result of the acquisitions. In addition, transformation-related expenses of $5.2 million, promotions for our legacy brands, particularly our 9Lives and Kibbles n’ Bits brands, and $2.1 million of integration costs also contributed to the increase in SG&A. For the nine months ended January 28, 2007, SG&A expense was $428.8 million, an increase of $65.9 million, or 18.2%, compared to SG&A of $362.9 million for the nine months ended January 29, 2006. This increase was primarily driven by incremental SG&A costs associated with the acquired businesses, including marketing expenses in the Pet Products reportable segment as a result of the acquisitions, and by transformation-related expenses of $25.2 million. In addition, $9.9 million of integration costs and promotions for our legacy brands, particularly our 9Lives and Kibbles n’ Bits brands, contributed to the increase in SG&A, partially offset by the gain of $9.5 million on the sale of a perpetual license for S&W branded dry soaked beans and related products, as well as the sale of the rights to the S&W trademark in Australia and New Zealand.

Operating income for the three months ended January 28, 2007 was $110.5 million, an increase of $18.0 million, or 19.5%, compared to operating income of $92.5 million for the three months ended January 29, 2006. For the nine months ended January 28, 2007, operating income was $233.3 million, an increase of $15.4 million, or 7.1%, compared to operating income of $217.9 million for the nine months ended January 29, 2006.

Our Consumer Products reportable segment operating income decreased by $7.2 million, or 12.1%, to $52.4 million for the three months ended January 28, 2007 from $59.6 million for the three months ended January 29, 2006. For the nine months ended January 28, 2007, our Consumer Products reportable segment operating income decreased by $22.5 million, or 14.7%, to $130.8 million from $153.3 million for the nine months ended January 29, 2006. This decrease was driven by the StarKist Seafood operating segment due to higher fish costs and lower volume due to the factors described in Net sales above. We also experienced higher crop-based, tinplate and other packaging costs for the three and nine months ended January 28, 2007, partially offset by pricing.

Our Pet Products reportable segment operating income increased by $31.8 million, or 70.0%, to $77.2 million for the three months ended January 28, 2007 from $45.4 million for the three months ended January 29, 2006. This increase was driven primarily by the acquisitions, partially offset by $2.3 million in integration costs. For the nine months ended January 28, 2007, our Pet Products reportable segment operating income increased by $66.8 million, or 66.3%, to $167.5 million, from $100.7 million for the nine months ended January 29, 2006. This increase was driven primarily by the acquisitions, partially offset by $10.9 million in integration costs.

Our corporate expenses increased by $6.6 million during the three months ended January 28, 2007 compared to the prior year period. This increase resulted primarily from transformation-related expenses of $5.2 million. The $28.9 million increase in our corporate expenses for the nine months ended January 28, 2007 compared to January 29, 2006 was primarily due to transformation-related expenses of $25.2 million.

Interest expense. Interest expense for the three and nine month periods ended January 28, 2007 was $42.2 million and $115.6 million, respectively, reflecting increases of $19.5 million and $48.8 million compared to interest expense of $22.7 million and $66.8 million for the three and nine months ended January 29, 2006. These increases were driven by higher average debt levels as a result of the Meow Mix and Milk-Bone acquisitions, as well as increased interest rates. We expect that our interest expense will continue to be higher in fiscal 2007 than in fiscal 2006 as a result of higher debt levels and higher interest rates.

Provision for Income Taxes. The effective tax rate for the three months ended January 28, 2007 was 34.5% compared to 35.3% for the three months ended January 29, 2006. This decrease is primarily due to the cumulative benefit created by the The Tax Relief and Health Care Act of 2006, enacted in December 2006,which was not reflected in the first and second quarters of 2007. This Act provided for the retroactive extension of the tax credit for companies operating in American Samoa and the Research tax credit. For the nine months ended January 28, 2007 the effective tax rate was 35.4% compared to 36.5% for the nine months ended January 29, 2006. The rate for the nine months ended January 28, 2007 was lower than the rate for the nine months ended January 29, 2006 primarily due to the reversal of a portion of the valuation allowance relating to foreign net operating loss carryforwards.

Income (Loss) from Discontinued Operations. The income from discontinued operations of $1.4 million for the three months ended January 28, 2007 and loss from discontinued operations of $0.3 million for the nine months ended January 28, 2007 are primarily related to minor activities and changes in estimates as we perform the final wind-down of items related to the Soup and Infant Feeding Businesses. Income from discontinued operations of $6.7 million and $16.7 million for the three and nine months ended January 29, 2006, respectively, primarily represents the results of operations of the Soup and Infant Feeding Businesses that were sold in the fourth quarter of fiscal 2006.

We have cash requirements that vary based primarily on the timing of our inventory production for fruit, vegetable and tomato items. Inventory production relating to these items typically 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 and term loans under our senior credit facility, our senior subordinated notes and, if necessary, our letters of credit), expenditures for capital assets, lease payments for some of our equipment and properties, expenditures related to our transformation plan, payment of dividends, and other general business purposes. Although we expect to continue to pay dividends, the declaration and payment of future dividends, if any, is subject to determination by our Board of Directors each quarter and is limited by our senior credit facility and indentures. Additionally, during the first quarter of fiscal 2007, we used additional debt, including debt under our revolving credit facility, and cash to fund acquisitions as described below. We may from time to time consider other uses for our cash flow from operations and other sources of cash. Such uses may include, but are not limited to, acquisitions or future transformation or restructuring plans. Our primary sources of cash are typically funds we receive as payment for the products we produce and sell and from our revolving credit facility.

In August 2006, the Pension Protection Act of 2006 (the “Act”) was signed into law. This legislation will ultimately result in accelerated rates of funding to our defined benefit pension plans and encourages employers to fully fund their defined benefit pension plans by 2011 by imposing certain consequences beginning in calendar 2008 for plans that do not meet certain funding levels. We currently expect to make a minimum contribution of approximately $16 million in fiscal 2008. In fiscal 2006 and in fiscal 2007 to date, we made contributions of $14.7 million and $15.0 million, respectively, which amounts were in excess of the then-applicable minimum requirements. As a result of the Act, we are evaluating whether or not we will make an additional contribution in fiscal 2008 in excess of the minimum, which excess amount we believe could approximate $30 million to $50 million. If we do not make an additional contribution in fiscal 2008, among other things, more frequent contributions (quarterly instead of annually), additional contributions in fiscal 2009 and beyond, and agreements with the Pension Benefit Guarantee Corporation may be required, and the form of benefit payments to participants could be impacted. Refer to Note 11 to the Consolidated Financial Statements in our 2006 Annual Report for a description of our defined benefit pension plans.

We believe that cash flow from operations and availability under our 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.

On May 19, 2006, we entered into an amendment of our senior credit facility (the “Second Amendment”). The Second Amendment, among other things, increased the existing Term Loan B facility commitments and revolving credit facility (the “Revolver”) commitments in order to provide funding for the Meow Mix and Milk-Bone acquisitions. On the effective date of the Second Amendment, we borrowed an additional $65.0 million in Term B loans and $125.0 million under our revolving credit facility to provide a portion of the funding for the consummation on such date of the Meow Mix acquisition and the payment of related fees and expenses. On July 3, 2006, we borrowed an additional $580.0 million in Term B loans and $13.0 million under our revolving credit facility to provide the funding for the Milk-Bone acquisition and to fund transaction-related expenses.

Upon consummation of the Meow Mix acquisition, the Meow Mix entities we acquired guaranteed our obligations under the 8 ⁵/8% senior subordinated notes and the 6 ³/4% senior subordinated notes and our obligations under the Amended Senior Credit Facility.

On August 15, 2006, we entered into a third amendment of our senior credit facility (as amended through August 15, 2006, the “Amended Senior Credit Facility”). On the effective date of the amendment, we borrowed an additional $100.0 million in

Term B loans, which proceeds (net of fees and expenses) were used to reduce the then-outstanding balance of the Revolver. The new Term B loans amortize on a pro rata basis with the existing Term B loans, and the other terms and conditions of the new Term B loans (including without limitation the applicable interest rate) are the same as the terms and conditions set forth in the Amended Senior Credit Facility applicable to the existing Term B loans.

We borrowed $169.3 million from the Revolver during the three months ended January 28, 2007. A total of $271.7 million was repaid during the three months ended January 28, 2007. During the nine months ended January 28, 2007, we borrowed $738.4 million from the Revolver and repaid $552.1 million. As of January 28, 2007, the net availability under the Revolver, reflecting $47.8 million of outstanding letters of credit, was $215.9 million. The blended interest rate on the Revolver was approximately 7.24% on January 28, 2007.

We are scheduled to repay $4.8 million of our long-term debt during the remainder of fiscal 2007. Scheduled maturities of long-term debt for each of the five succeeding fiscal years are as follows (in millions):

Agreements relating to our long-term debt, including the Amended Senior Credit Facility and the indentures governing the senior subordinated notes, contain covenants that restrict Del Monte Corporation’s ability, 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. Del Monte Corporation, the primary obligor on our debt obligations, is a direct, wholly-owned subsidiary of Del Monte Foods Company. Certain of these covenants are also applicable to Del Monte Foods Company. We are required to meet a maximum leverage ratio and a minimum fixed charge coverage ratio under the Amended Senior Credit Facility. The Second Amendment increased the maximum permitted leverage ratio in effect through the term of the Amended Senior Credit Facility and decreased the minimum fixed charge coverage ratio in effect through the term of the Amended Senior Credit Facility. The maximum permitted leverage ratio decreases over time and the minimum fixed charge coverage ratio increases over time, as set forth in the Amended Senior Credit Facility. As of January 28, 2007, we believe that we are in compliance with all such financial covenants.

Compliance with these covenants is 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 senior credit facility or any of 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 28, 2007:

During the nine months ended January 28, 2007, our cash and cash equivalents decreased by $439.0 million.

Operating Activities. Cash provided by operating activities for the nine months ended January 28, 2007 was $20.2 million, compared to cash provided by operating activities of $86.5 million for the nine months ended January 29, 2006. This $66.3 million fluctuation was primarily driven by the decrease in net income and the payment of fiscal 2006 employee annual incentive awards of $17.9 million in the first nine months of fiscal 2007; there were no such payments in the first nine months of fiscal 2006. 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, and 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 28, 2007 was $1,302.0 million compared to $13.1 million for the nine months ended January 29, 2006. We used $1,310.7 million for the acquisitions as described in “Executive Overview” above. Capital spending during the first nine months of fiscal 2007 was $12.1 million higher than during the first nine months of fiscal 2006 driven by increased overall spending associated with the execution of our transformation plan and other capital projects.

Financing Activities. Cash provided by financing activities for the nine months ended January 28, 2007 was $843.3 million compared to cash used in financing activities of $124.0 million for the nine months ended January 29, 2006. During the first nine months of fiscal 2007, we borrowed a net of $186.2 million in short-term borrowings as a result of financing the acquisitions and incurring normal seasonal borrowings for operations. In addition, during the nine months ended January 28, 2007 and January 29, 2006, we borrowed $745.0 million and $0, respectively in Term B loans and made scheduled repayments of $60.0 million and $1.1 million, respectively, towards our outstanding Term B loan principal. We also paid $24.1 million in dividends during the nine months ended January 28, 2007. The $124.0 million use of cash for financing activities for the nine months ended January 29, 2006 resulted primarily from the repurchase of approximately 12 million shares of our common stock in connection with an accelerated stock buyback.

In connection with our accelerated stock buyback (“ASB”), we entered into certain arrangements with Goldman Sachs International (“Goldman Sachs”), including a purchase price adjustment. On October 25, 2006, such arrangements terminated in accordance with their terms. As a result, the aggregate amount required to be paid to Goldman Sachs, which included the amount of the price adjustment for the shares purchased by Goldman Sachs based on their actual cost to purchase the shares in the open market between December 22, 2005 and October 25, 2006, was approximately $6.6 million and was paid in cash on October 30, 2006.

In July 2006, the FASB issued Interpretation No. 48, “Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109,” (“FIN 48”), which seeks to reduce the diversity in practice associated with the accounting and reporting for uncertainty in income tax positions. This interpretation prescribes a comprehensive model for the financial statement recognition, measurement, presentation and disclosure of uncertain tax positions taken or expected to be taken in income tax returns. An uncertain tax position will be recognized if it is determined that it is more likely than not to be sustained upon examination. The tax position is measured as the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. The cumulative effect of applying the provisions of this interpretation is to be reported as a separate adjustment to the opening balance of retained earnings in the year of adoption. FIN 48 is effective for fiscal years beginning after December 15, 2006 and we plan to adopt the pronouncement in the first quarter of fiscal 2008. We are in the process of evaluating the impact of the adoption of FIN 48 on our consolidated financial statements.

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (“SFAS 157”). SFAS 157 defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles, and expands disclosures about fair value measurements. The provisions of SFAS 157 are effective for fiscal years beginning after November 15, 2007. We will adopt the provisions of SFAS 157 for our fiscal year beginning April 28, 2008. We are currently evaluating the impact of the provisions of SFAS 157 on our consolidated financial statements.

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans” (“SFAS 158”). SFAS 158 requires an entity to recognize in its balance sheet the funded status of its defined benefit postretirement plans, measured as the difference between the fair value of the plan assets and the benefit obligation, and to recognize changes in the funded status of a defined benefit postretirement plan within accumulated other comprehensive income, to the extent such changes are not recognized in earnings as a component of net periodic benefit cost. It also requires an entity to measure defined benefit plan assets and obligations as of the date of the employer’s fiscal year-end statement of financial position. The recognition provisions of SFAS 158 are to be applied prospectively and are effective for fiscal years ending after December 15, 2006. The measurement provisions are effective for fiscal years ending after December 15, 2008. We will adopt the recognition provisions of SFAS 158 as of April 29, 2007. We intend to adopt the measurement provisions of SFAS 158 as of May 3, 2009. We do not expect the adoption of the recognition provisions on April 29, 2007 to have a significant impact on our consolidated balance sheet, and are currently evaluating the impact of the measurement provisions of SFAS 158 on our consolidated financial statements.

In September 2006, the Securities and Exchange Commission (“SEC”) issued Staff Accounting Bulletin No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements” (“SAB 108”). SAB 108 requires analysis of misstatements using both an income statement (rollover) approach

and a balance sheet (iron curtain) approach in assessing materiality and provides for a one-time cumulative effect transition adjustment. SAB 108 is effective for annual financial statements for the first fiscal year ending after November 15, 2006. We will adopt the provisions of SAB 108 as of April 29, 2007. We currently believe that the adoption of SAB 108 will have no impact on our consolidated financial statements, although we will continue evaluating SAB 108 until its adoption on April 29, 2007.

We have a risk management program which was adopted with the objective of minimizing our exposure to changes in commodity and other prices. We do not trade or use instruments with the objective of earning financial gains on price fluctuations alone or use instruments where there are not underlying exposures. In prior periods, our risk management program included the objective of minimizing our exposure to changes in interest rates. In the future, we may choose to incorporate this objective into our risk management program again.

During the nine months ended January 28, 2007, we were primarily exposed to the risk of loss resulting from adverse changes in interest rates and commodity and other prices, which affect interest expense 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 primarily to fund seasonal working capital needs and other uses of cash. Interest expense on our floating rate debt is typically calculated based on a fixed spread over a reference rate, such as LIBOR. Therefore, fluctuations in market interest rates will cause interest expense increases or decreases on a given amount of floating rate debt.

In prior periods, we managed our interest rate risk related to a portion of our floating rate debt by entering into interest rate swaps in which we received floating rate payments and made fixed rate payments. On February 24, 2003 we entered into six interest rate swaps, with a combined notional amount of $300.0 million, as the fixed rate-payer. A formal cash flow hedge accounting relationship was established between the six swaps and a portion of our interest payment on our floating rate debt. These six swaps expired on April 28, 2006.

During the three months ended January 29, 2006, the Company’s interest rate cash flow hedges resulted in a $0.8 million decrease to other comprehensive income (“OCI”) and a $0.5 million decrease to deferred tax liabilities. The Company’s interest rate cash flow hedges did not have an impact on other expense. During the nine months ended January 29, 2006, the Company’s interest rate cash flow hedges resulted in a $1.1 million decrease to OCI and a $0.7 million decrease to deferred tax liabilities. The Company’s interest rate cash flow hedges did not have an impact on other expense. On January 29, 2006, the fair values of our interest rate swaps were recorded as current assets of $1.6 million.

The table below presents our market risk associated with debt obligations as of January 28, 2007. The fair values are based on quoted market prices. Variable interest rates disclosed represent the weighted average rates in effect on January 28, 2007.

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

On January 28, 2007, the fair values of our commodities hedges were recorded as current assets of $3.8 million and current liabilities of $0.1 million. On January 29, 2006, the fair values of our commodities hedges were recorded as current assets of $0.9 million and current liabilities of $0.1 million.

Other: During fiscal 2006, the price of fuel rose substantially in comparison to prior periods. As a result, in the second quarter of fiscal 2006, we began a hedging program for heating oil as a proxy for fluctuations in diesel fuel prices. We have entered into futures or options contracts to cover a portion of our projected diesel fuel costs in certain periods beginning with the three months ended January 29, 2006. These contracts generally have a term of less than three months and do not qualify as cash flow hedges for accounting purposes. Accordingly, associated gains or losses are recorded directly as other income or expense. As of January 28, 2007, the fair values of our heating oil hedges were recorded as current assets of $0.2 million and current liabilities of $0.2 million. We expect to continue our hedging program with respect to diesel fuel and other energy costs during the remainder of fiscal 2007.

During the fourth quarter of fiscal 2006, we began a hedging program for natural gas. We accounted for these natural gas derivatives as either cash flow or economic hedges. For cash flow hedges, the effective portion of derivative 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 value of economic hedges are recorded directly in earnings. As of January 28, 2007, the fair values of our natural gas hedges were recorded as current assets of $0.2 million and current liabilities of $1.0 million.

The table below presents our commodity, natural gas and heating oil derivative contracts as of January 28, 2007. The fair values indicated are based on quoted market prices. All of the commodity, natural gas and heating oil derivative contracts held on January 28, 2007 are scheduled to mature prior to the end of fiscal 2008.

The table below presents the changes in the following balance sheet accounts and impact on income statement accounts of our commodities and other hedging activities.

We conducted an evaluation of 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”). 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. Our Disclosure Controls include some, but not all, components of our internal control over financial reporting.

Based upon the Controls Evaluation, and subject to the limitations noted in this Part II, Item 4, 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 to provide reasonable assurance that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified by the Securities and Exchange Commission, and that material information relating to Del Monte and its consolidated subsidiaries is made known to management, including the CEO and CFO, particularly during the period when our periodic reports are being prepared.

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.

There have not been any changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Securities Exchange Act of 1934) during the most recent fiscal quarter that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

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 on Form 10-Q includes the information concerning the Controls Evaluation referred to in the Rule 13a-14 Certifications and this section should be read in conjunction with the Rule 13a-14 Certifications for a more complete understanding of the topics presented.

Except as set forth below, there have been no material developments in our legal proceedings since the legal proceedings reported in our annual report on Form 10-K for the year ended April 30, 2006:

We filed a Notice of Arbitration with the American Arbitration Association (“AAA”) on February 15, 2006, which initiated arbitration proceedings against Pacer Global Logistics. We alleged that Pacer breached the Logistics Services Agreement entered into between the companies on April 4, 2005, effective as of March 4, 2005. Pacer filed a Demand for Arbitration with AAA on March 8, 2006, as amended on April 4, 2006, in which Pacer asserted claims against us for breach of the Pacer Agreement. We have denied Pacer’s claims. The arbitration occurred in December 2006 during which Pacer sought declaration of its ability to terminate the Pacer Agreement, damages of $21.0 million and attorney fees, expert fees and interest. Final arguments were held on February 9, 2007 and the arbitrator is expected to issue a decision on or before March 31, 2007. We believe we have accrued adequate reserves to cover any material liability in this matter. Although the parties have been unable to negotiate a formal termination of the Pacer Agreement, we began using a different transportation services provider beginning on May 1, 2006.

We are a defendant in an action brought by the Public Media Center in the Superior Court in San Francisco, CA, on December 31, 2001. 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 sought 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 disputed the plaintiff’s allegations. This case was consolidated with the California Attorney General case described below and trial began on October 18, 2005. The court issued a decision in our favor on May 11, 2006. As noted below, on August 18, 2006, the Attorney General filed a Motion to Reopen Trial to Present New Evidence. On September 29, 2006, the court issued a decision denying the Attorney General’s Motion to Reopen Trial. The court entered a final judgment in our favor on November 21, 2006. Public Media Center filed a Notice of Appeal on January 26, 2007.

We are a defendant in an action brought by the California Attorney General in the Superior Court in San Francisco, CA, 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 sought 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 disputed the Attorney General’s allegations. This case was consolidated with the Public Media Center case described above and trial began on October 18, 2005. The court issued a decision in our favor on May 11, 2006. On August 18, 2006, the Attorney General filed a Motion to Reopen Trial to Present New Evidence. On September 29, 2006, the court issued a decision denying the Attorney General’s Motion to Reopen Trial. The court entered a final judgment in our favor on November 21, 2006. The Attorney General filed a Notice of Appeal on January 18, 2007.

We were 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. 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 alleged 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 sought compensatory damages of at least $22.0 million, plus punitive damages. On December 9, 2004, we agreed to a settlement with PPI Enterprises. Counter-claims against us by two third-parties in the amount of $1.4 million remained after the settlement with PPI Enterprises. The court granted our motion for summary judgment against these third-parties on November 28, 2005. The third-parties appealed that decision. We settled with one of the third-parties on March 14, 2006 and that third-party withdrew its appeal. On September 27, 2006, the appeals court heard argument in connection with the remaining appeal and on November 20, 2006 denied that appeal and upheld the trial court’s decision granting summary judgment in our favor.

As previously disclosed in our quarterly report on Form 10-Q for the period ended July 30, 2006:

We are a defendant in an action filed in the Superior Court in Middlesex, NJ, on May 15, 2006. The complaint alleges that four-packs of StarKist albacore tuna wrapped in shrink-wrap were mislabeled because the nutritional information on the shrink-wrap was different from the nutritional information on the individual cans. The complaint alleges several causes of action including consumer fraud, violations of the New Jersey Truth-in-Consumer Contract, Warranty and Notice Act and unjust enrichment and seeks compensatory, punitive and treble damages. The complaint seeks certification of this matter as a class action. We have negotiated a tentative settlement with the plaintiff’s counsel, currently expected to be less than $0.1 million, and believe we have accrued adequate reserves to cover the settlement of this matter.

We are also involved from time to time in various legal proceedings incidental to our business, including proceedings involving product liability claims, worker’s compensation and other employee claims, tort and other general liability claims, for which we carry insurance, as well as trademark, copyright, patent infringement and related litigation. While it is not feasible to predict or determine the ultimate outcome of these matters, we believe that none of these legal proceedings will have a material adverse effect on our financial position.

This quarterly report on Form 10-Q, including the section entitled “Item 1. Financial Statements” and the 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. As detailed in our 2006 Annual Report, these factors include, among others:

Certain aspects of these and other 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 2006 Annual Report. In addition to the foregoing, other economic, industry and business conditions may affect our future results, for example:

We will not benefit from preferential tax treatment for our products produced in American Samoa if the legislation providing for such treatment is not renewed. Section 936 of the Internal Revenue Code historically provided a federal income tax credit for income earned from a business conducted within the United States possession of American Samoa. This credit was renewed in December 2006, retroactive to January 1, 2006, and is currently scheduled to expire in December 2007, affecting fiscal years beginning after such expiration date. We received the benefit of this credit with respect to income from our tuna business in American Samoa throughout fiscal 2006, which resulted in fiscal 2006 savings of approximately $4.9 million in tax expense. We cannot assure you that the legislation providing for this federal income tax credit will be renewed beyond December 2007, or that similar legislation will be adopted. If such legislation is not renewed or adopted, our effective federal income tax rate on income attributable to our operations in American Samoa will increase and our net profits will decrease.

Risk associated with foreign operations, including changes in import/export duties, wage rates, political or economic climates, or exchange rates, may adversely affect our operations. Our foreign operations and relationships with foreign suppliers and co-packers subject us to the risks of doing business abroad. The countries from which we source our products may be subject to political and economic instability, and may periodically enact new or revise existing laws, taxes, duties, quotas, tariffs, currency controls or other restrictions to which we are subject. Our products are subject to import duties and other restrictions, and the United States government may periodically impose new or revise existing duties, quotas, tariffs or other restrictions to which we are subject. For example, we currently import tuna pouch products from Ecuador on a duty-free basis under the Andean Trade Preference and Drug Eradication Act (ATPDEA), which expires June 30, 2007. If new legislation is not adopted that provides similar benefits to the ATPDEA, our costs could increase and our results of operations could be adversely affected. In addition, steps we may take to mitigate the impact of the expiration of the ATPDEA in the short-term, such as accelerating our production of affected products and increasing our inventories, could adversely affect our results of operations.

Accelerated pension funding obligations could adversely impact our cash from operations. In August 2006, the Pension Protection Act of 2006 (the “Act”) was signed into law. This legislation will ultimately result in accelerated rates of funding to our defined benefit pension plans and encourages employers to fully fund their defined benefit pension plans by 2011 by imposing certain consequences beginning in calendar 2008 for plans that do not meet certain funding levels. We currently expect to make a minimum contribution of approximately $16 million in fiscal 2008. As a result of the Act, we are evaluating whether or not we will make an additional contribution in fiscal 2008 in excess of the minimum, which excess amount we believe could approximate $30 million to $50 million. Our minimum contribution for fiscal 2008 and actual additional contributions may vary materially from the estimated minimum and the estimated range provided above based on a variety of factors including the results of valuations of plan assets and liabilities, a decision to accept certain consequences with respect to the pension plans, and other decisions regarding our uses of cash. If we do not make an additional contribution in fiscal 2008, among other things, more frequent contributions (quarterly instead of annually), additional contributions in fiscal 2009 and beyond, and agreements with the Pension Benefit Guarantee Corporation may be required, and the form of benefit payments to participants could be impacted.

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.

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	3

ITEM 1.	FINANCIAL STATEMENTS	3

	CONDENSED CONSOLIDATED BALANCE SHEETS – January 28, 2007 (Unaudited) and April 30, 2006	3

	CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) – three and nine months ended January 28, 2007 and January 29, 2006	4

	CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) – nine months ended January 28, 2007 and January 29, 2006	5

	NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)	6

ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	19

ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	32

ITEM 4.	CONTROLS AND PROCEDURES	34

PART II.	OTHER INFORMATION	35

ITEM 1.	LEGAL PROCEEDINGS	35

ITEM 1A.	RISK FACTORS	36

ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	38

ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	38

ITEM 4.	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS	38

ITEM 5.	OTHER INFORMATION	38

ITEM 6.	EXHIBITS	38

SIGNATURES		39


	January 28, 2007			April 30, 2006
	(Unaudited)			(derived from audited financial statements)
ASSETS
Cash and cash equivalents	$	20.9		$	459.9
Restricted cash		—			43.3
Trade accounts receivable, net of allowance		251.5			237.8
Inventories		1,006.2			764.2
Prepaid expenses and other current assets		103.5			111.9

TOTAL CURRENT ASSETS		1,382.1			1,617.1

Property, plant and equipment, net		700.5			641.4
Goodwill		1,390.9			758.7
Intangible assets, net		1,203.6			572.5
Other assets, net		39.8			33.2

TOTAL ASSETS	$	4,716.9		$	3,622.9

LIABILITIES AND STOCKHOLDERS’ EQUITY

Accounts payable and accrued expenses	$	501.6		$	450.9
Short-term borrowings		187.9			1.7
Current portion of long-term debt		26.8			58.6

TOTAL CURRENT LIABILITIES		716.3			511.2

Long-term debt		1,959.3			1,242.5
Deferred tax liabilities		325.8			228.1
Other non-current liabilities		332.3			327.1

TOTAL LIABILITIES		3,333.7			2,308.9

Stockholders’ equity:
Common stock ($0.01 par value per share, shares authorized:
500,000,000; 213,819,798 issued and 201,822,726 outstanding at January 28, 2007 and 212,114,276 issued and 200,117,204 outstanding at April 30, 2006)	$	2.1		$	2.1
Additional paid-in capital		1,013.1			989.5
Treasury stock, at cost		(133.1	)		(126.5	)
Accumulated other comprehensive loss		(7.4	)		(7.9	)
Retained earnings		508.5			456.8

TOTAL STOCKHOLDERS’ EQUITY		1,383.2			1,314.0

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	4,716.9		$	3,622.9


	Three Months Ended						Nine Months Ended
	January 28, 2007			January 29, 2006			January 28, 2007			January 29, 2006
	(Unaudited)
Net sales	$	907.2		$	789.6		$	2,474.8		$	2,199.4
Cost of products sold		654.0			571.3			1,812.7			1,618.6

Gross profit		253.2			218.3			662.1			580.8
Selling, general and administrative expense		142.7			125.8			428.8			362.9

Operating income		110.5			92.5			233.3			217.9
Interest expense		42.2			22.7			115.6			66.8
Other (income) expense		(0.6	)		(0.1	)		(0.2	)		1.0

Income from continuing operations before income taxes		68.9			69.9			117.9			150.1
Provision for income taxes		23.8			24.7			41.7			54.8

Income from continuing operations		45.1			45.2			76.2			95.3

Income (loss) from discontinued operations before income taxes		2.2			11.3			(0.5	)		27.1
Provision (benefit) for income taxes		0.8			4.6			(0.2	)		10.4

Income (loss) from discontinued operations		1.4			6.7			(0.3	)		16.7

Net income	$	46.5		$	51.9		$	75.9		$	112.0

Earnings per common share
Basic:
Continuing Operations	$	0.22		$	0.22		$	0.38		$	0.47
Discontinued Operations		0.01			0.04			—			0.08

Total	$	0.23		$	0.26		$	0.38		$	0.55

Diluted:
Continuing Operations	$	0.22		$	0.22		$	0.37		$	0.47
Discontinued Operations		0.01			0.04			—			0.07

Total	$	0.23		$	0.26		$	0.37		$	0.54


	Nine Months Ended
	January 28, 2007			January 29, 2006
	(Unaudited)
OPERATING ACTIVITIES:
Net income	$	75.9		$	112.0
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		74.9			70.9
Deferred taxes		17.5			28.4
Gain on asset disposals		(0.9	)		—
Stock compensation expense		10.6			6.7
Tax benefit from stock options exercised		—			1.6
Other non-cash items, net		2.6			(2.5	)
Changes in operating assets and liabilities		(160.4	)		(130.6	)

NET CASH PROVIDED BY OPERATING ACTIVITIES		20.2			86.5

INVESTING ACTIVITIES:
Capital expenditures		(51.3	)		(39.2	)
Net proceeds from disposal of assets		16.7			26.1
Net cash used in business acquisitions		(1,310.7	)		—
Decrease in restricted cash		43.3			—

NET CASH USED IN INVESTING ACTIVITIES		(1,302.0	)		(13.1	)

FINANCING ACTIVITIES:
Proceeds from short-term borrowings		739.9			171.2
Payments on short-term borrowings		(553.7	)		(170.4	)
Proceeds from long-term debt		745.0			—
Principal payments on long-term debt		(60.0	)		(1.1	)
Payments of debt-related costs		(10.0	)		—
Dividends paid		(24.1	)		—
Issuance of common stock		12.2			2.8
Purchase of treasury stock		(6.6	)		(126.5	)
Excess tax benefits from stock-based compensation		0.6			—

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES		843.3			(124.0	)

Effect of exchange rate changes on cash and cash equivalents		(0.5	)		(0.7	)
NET CHANGE IN CASH AND CASH EQUIVALENTS		(439.0	)		(51.3	)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		459.9			145.9

CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	20.9		$	94.6


	Nine Months Ended
	January 28, 2007		January 29, 2006
Dividend yield	1.4	%	0.9	%
Expected volatility	30.7	%	29.6	%
Risk-free interest rate	4.7	%	4.2	%
Expected life (in years)	7.0		7.0

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	Three Months Ended		Nine Months Ended
	January 29, 2006		January 29, 2006
Net income, as reported	$	51.9	$	112.0
Add: Stock-based employee compensation expense included in reported net income, net of tax		1.7		4.3
Deduct: Total stock-based employee compensation expense determined under the fair value based method for all awards, net of tax		2.0		5.3

Pro forma net income	$	51.6	$	111.0

Earnings per share:
Basic - as reported	$	0.26	$	0.55
Basic - pro forma	$	0.26	$	0.55
Diluted - as reported	$	0.26	$	0.54
Diluted - pro forma	$	0.26	$	0.54


	Options Outstanding		Outstanding Weighted Average Exercise Price		Options Exercisable	Exercisable Weighted Average Exercise Price
Balance at April 30, 2006	14,927,270		$	9.16	8,046,461	$	8.67
Granted	2,706,500			10.57
Forfeited	(561,774	)		10.23
Exercised	(1,671,776	)		7.31

Balance at January 28, 2007	15,400,220		$	9.57	8,664,082	$	9.19


	Options Outstanding				Options Exercisable
Range of Exercise Price Per Share	Number Outstanding	Weighted Average Remaining Contractual Life	Weighted Average Exercise Price		Number Exercisable	Weighted Average Exercise Price
$5.22 - 8.78	6,038,570	5.81	$	7.93	4,833,657	$	7.89
$8.81 - 10.59	7,725,847	8.05		10.27	2,750,022		10.04
$10.63 - 15.85	1,635,803	4.52		12.34	1,080,403		12.82

$5.22 - 15.85	15,400,220	6.80	$	9.57	8,664,082	$	9.19


	Performance Accelerated Restricted Stock Units		Deferred Stock Units		Board of Directors Restricted Stock Units	Performance Shares
Balance at April 30, 2006	658,779		198,570		—	961,025
Granted	327,500		96,320		54,033	544,600
Forfeited	(65,998	)	(1,359	)	—	(142,265	)
Issued as common stock	(23,529	)	(13,805	)	—	—

Balance at January 28, 2007	896,752		279,726		54,033	1,363,360


	Meow Mix		Milk-Bone
Cash and cash equivalents	$	3.6	$	—
Trade accounts receivable, net		18.9		—
Inventories		25.9		18.0
Prepaid expenses and other current assets		10.9		8.8
Property, plant and equipment, net		34.9		37.3
Goodwill		421.5		213.5
Intangible assets, net		307.0		330.0
Other assets, net		0.2		—

Total assets acquired		822.9		607.6

Accounts payable and accrued expenses		30.2		9.7
Deferred tax liabilities		67.6		—
Other non-current liabilities		3.3		4.9

Total liabilities assumed		101.1		14.6

Net assets acquired	$	721.8	$	593.0


	January 28, 2007		April 30, 2006
Inventories:
Finished products	$	855.9	$	570.7
Raw materials and in-process material		57.3		52.9
Packaging material and other		89.8		119.8
LIFO Reserve		3.2		20.8

TOTAL INVENTORIES	$	1,006.2	$	764.2


	January 28, 2007		April 30, 2006
Short-term borrowings:
Revolver	$	186.3	$	—
Other		1.6		1.7

	$	187.9	$	1.7

Long-term debt:
Term A Loan	$	401.6	$	450.0
Term B Loan		884.5		148.5

Total Term Loans		1,286.1		598.5

9 ¹/4% senior subordinated notes		—		2.6
8 ⁵/8% senior subordinated notes		450.0		450.0
6 ³/4% senior subordinated notes		250.0		250.0

		1,986.1		1,301.1
Less current portion		26.8		58.6

	$	1,959.3	$	1,242.5


Accrued termination and severance costs - April 30, 2006	$	—
Termination and severance costs incurred		7.4
Amounts utilized		(0.8	)

Accrued termination and severance costs - July 30, 2006		6.6

Amounts utilized		(2.0	)
Other		(0.1	)

Accrued termination and severance costs - October 29, 2006		4.5

Amounts utilized		(2.7	)

Accrued termination and severance costs - January 28, 2007	$	1.8


	Three Months Ended												Nine Months Ended
	Pension Benefits						Other Benefits						Pension Benefits						Other Benefits
	January 28, 2007			January 29, 2006			January 28, 2007			January 29, 2006			January 28, 2007			January 29, 2006			January 28, 2007			January 29, 2006
Components of net periodic benefit cost
Service cost for benefits earned during the period	$	2.8		$	3.1		$	0.4		$	0.5		$	8.5		$	9.2		$	1.2		$	1.6
Interest cost on projected benefit obligation		6.1			5.0			1.6			1.3			18.4			15.0			4.8			4.2
Expected return on plan assets		(6.3	)		(5.2	)		—			—			(19.0	)		(15.7	)		—			—
Amortization of prior service cost		0.3			0.3			(2.1	)		(2.1	)		0.8			0.8			(6.3	)		(5.9	)
Actuarial loss		0.1			0.1			—			—			0.5			0.1			—			—

Total benefit cost (reduction of benefit cost)	$	3.0		$	3.3		$	(0.1	)	$	(0.3	)	$	9.2		$	9.4		$	(0.3	)	$	(0.1	)


	January 28, 2007		April 30, 2006
	(in millions)
Short-term borrowings:
Revolver	$	186.3	$	—
Other		1.6		1.7

	$	187.9	$	1.7

Long-term debt:
Term A Loan	$	401.6	$	450.0
Term B Loan		884.5		148.5

Total Term Loans		1,286.1		598.5

9 ¹/4% senior subordinated notes		—		2.6
8 ⁵/8% senior subordinated notes		450.0		450.0
6 ³/4% senior subordinated notes		250.0		250.0

		1,986.1		1,301.1
Less current portion		26.8		58.6

	$	1,959.3	$	1,242.5


2008	$	7.9
2009		7.8
2010		7.6
2011		7.4
2012		5.8


2008	$	29.4
2009		39.6
2010		49.8
2011		494.1
2012		1,118.4


	Payments due by period (In millions)
	Total		Less than 1 year		1 -3 years		3 - 5 years		More than 5 years
Long-term Debt	$	1,986.1	$	26.8	$	84.3	$	952.2	$	922.8

Capital Lease Obligations		—

Operating Leases		250.1		47.2		80.9		51.0		71.0

Purchase Obligations (1)		1,165.0		425.4		483.3		233.5		22.8

Other Long-term Liabilities Reflected on the Balance Sheet		332.3		—		55.2		44.9		232.2

Total Contractual Obligations	$	3,733.5	$	499.4	$	703.7	$	1,281.6	$	1,248.8


	Maturity
	Remainder of Fiscal 2007			Fiscal 2008			Fiscal 2009			Fiscal 2010			Fiscal 2011			Fiscal 2012			After Fiscal 2012			Total			Fair Value January 28, 2007
	($ in millions)
Interest Rate Risk:
Debt
Fixed Rate	$	—		$	—		$	—		$	—		$	—		$	450.0		$	250.0		$	700.0		$	720.2
Average Interest Rate		—			—			—			—			—			8.63	%		6.75	%		7.96	%
Variable Rate	$	4.8		$	29.4		$	39.6		$	49.8		$	494.1		$	668.4		$	—		$	1,286.1		$	1,286.1
Average Interest Rate		6.83	%		6.83	%		6.82	%		6.82	%		6.83	%		6.84	%		—			6.83	%


	Soybean Meal (Short Tons)		Soybean Oil (Pounds)		Corn (Bushels)			Hard Wheat (Bushels)		Natural Gas (Decatherms)			Heating Oil (Gallons)
Futures Contracts
Contract Volumes		62,400		600,000		—			160,000		1,820,000			—
Weighted Average Price	$	172.35	$	0.29	$	—		$	5.16	$	8.16		$	—
Contract Amount ($ in Millions)	$	10.8	$	0.2	$	—		$	0.8	$	14.9		$	—
Fair Value ($ in Millions)	$	2.5	$	—	$	—		$	—	$	(0.8	)	$	—

Options
*Calls (Long)*
Contract Volumes		—		—		3,250,000			—		—			3,192,000
Weighted Average Strike Price	$	—	$	—	$	3.89		$	—	$	—		$	1.72
Weighted Average Price Paid	$	—	$	—	$	0.23		$	—	$	—		$	0.05
Fair Value ($ in Millions)	$	—	$	—	$	1.3		$	—	$	—		$	0.2

*Puts (Written)*
Contract Volumes		—		—		3,250,000			—		—			3,192,000
Weighted Average Strike Price	$	—	$	—	$	3.22		$	—	$	—		$	1.55
Weighted Average Price Received	$	—	$	—	$	0.09		$	—	$	—		$	0.05
Fair Value ($ in Millions)	$	—	$	—	$	(0.1	)	$	—	$	—		$	(0.2	)


Exhibit Number		Description
*31.1		Certification of the Chief Executive Officer Pursuant to Rule 13-14(a) of the Exchange Act

*31.2		Certification of the Chief Financial Officer Pursuant to Rule 13-14(a) of the Exchange Act

*32.1		Certification of the Chief Executive Officer furnished Pursuant to Rule 13-14(b) of the Exchange Act and 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

*32.2		Certification of the Chief Financial Officer furnished Pursuant to Rule 13-14(b) of the Exchange Act and 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002