##### Table of Contents









SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


Form 10-Q

|                                                   |  |                                                                                                 
|-------------------------------------------------- |  | ------------------------------------------------------------------------------------------------
|(Mark One)                                         |  |                                                                                                 
|                                                  
|þ                                                  |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR
    15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934 
|                                                  
|For the quarterly period ended October 4,
    2003
|                                                  
|or                                                
|                                                  
|o                                                  |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR
    15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934
|For the transition period
    from           to   

Commission File Number 1-4455

Dole Food Company, Inc.

(Exact name of registrant as specified in its
charter)


|                                                                                                                |  |                                                        
|--------------------------------------------------------------------------------------------------------------- |  | -------------------------------------------------------
|Delaware
    (State or other jurisdiction of
    incorporation or organization)                                 |  | 99-0035300
    (I.R.S. Employer
    Identification No.)
|One Dole Drive
    Westlake Village, California 91362
    (Address of principal executive offices and zip code)

Registrants telephone number, including
area code: (818) 879-6600

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

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

Indicate the number of shares outstanding of each
of the issuers classes of common stock, as of the latest
practicable date.

|                               |  |                                            
|------------------------------ |  | -------------------------------------------
|Class                          |  | Shares Outstanding at November 17,
    2003
|Common Stock, $0.001 Par Value |  | 1,000                                      



---






---

TABLE OF CONTENTS



|                                                     |                                                                                               |                                                      |  |  |  |  |  | 
|---------------------------------------------------- | --------------------------------------------------------------------------------------------- | ---------------------------------------------------- |  |  |  |  |  | 
|PART I. FINANCIAL INFORMATION                       
|ITEM 1. FINANCIAL STATEMENTS DOLE FOOD COMPANY, INC.
|                                                     |                                                                                               | CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS     
|                                                     |                                                                                               | CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS     
|                                                     |                                                                                               | CONDENSED CONSOLIDATED BALANCE SHEETS               
|                                                     |                                                                                               | CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS     
|                                                     |                                                                                               | NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|                                                     | ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|                                                     | ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                           
|                                                     | ITEM 4. CONTROLS AND PROCEDURES                                                              
|PART II. OTHER INFORMATION                          
|                                                     | Item 1. Legal Proceedings                                                                    
|                                                     | Item 6. Exhibits and Reports on Form 8-K                                                     
|SIGNATURES                                          
|EXHIBIT INDEX                                       
|EXHIBIT 31.1                                        
|EXHIBIT 31.2                                        
|EXHIBIT 32.1                                        
|EXHIBIT 32.2                                        



---



##### Table of Contents



DOLE FOOD COMPANY, INC.

INDEX

|                                   |         |                                                                                                                                                                                                                 |                      |        |    |  | 
|---------------------------------- | ------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------- | ------ | -- |  | 
|                                   |         |                                                                                                                                                                                                                 |                      | Page  
|                                   |         |                                                                                                                                                                                                                 |                      | Number
|                                   |         |                                                                                                                                                                                                                 |                      |       
|PART I   Financial
    Information |         |                                                                                                                                                                                                                 |                      |       
|                                   | Item 1. |                                                                                                                                                                                                                 | Financial Statements |        |    |  | 
|                                   |         | Condensed Consolidated Statements of
    Operations  Quarters Ended October 4, 2003
    (Successor) and October 5, 2002 (Predecessor)                                                                          |                      |        | 3  | 
|                                   |         | Condensed Consolidated Statements of
    Operations  Two Quarters Ended October 4, 2003
    (Successor), Quarter Ended March 22, 2003 (Predecessor) and
    Three Quarters Ended October 5, 2002 (Predecessor) |                      |        | 4  | 
|                                   |         | Condensed Consolidated Balance Sheets 
    October 4, 2003 (Successor) and December 28, 2002
    (Predecessor)                                                                                                 |                      |        | 5  | 
|                                   |         | Condensed Consolidated Statements of Cash
    Flows  Two Quarters Ended October 4, 2003
    (Successor), Quarter Ended March 22, 2003 (Predecessor) and
    Three Quarters Ended October 5, 2002 (Predecessor) |                      |        | 6  | 
|                                   |         | Notes to Condensed Consolidated Financial
    Statements                                                                                                                                                        |                      |        | 7  | 
|Item 2.                            |         | Managements Discussion and Analysis of
    Financial Condition and Results of Operations                                                                                                                       |                      |        | 31 | 
|Item 3.                            |         | Quantitative and Qualitative Disclosures About
    Market Risk                                                                                                                                                  |                      |        | 44 | 
|Item 4.                            |         | Controls and Procedures                                                                                                                                                                                         |                      |        | 44 | 
|PART II  Other Information         |         |                                                                                                                                                                                                                 |                      |       
|Item 1.                            |         | Legal Proceedings                                                                                                                                                                                               |                      |        | 44 | 
|Item 6.                            |         | Exhibits and Reports on Form 8-K                                                                                                                                                                                |                      |        | 46 | 
|                                   |         | Signatures                                                                                                                                                                                                      |                      |        | 47 | 
|                                   |         | Exhibit Index                                                                                                                                                                                                   |                      |        | 48 | 
|                                   |         | Certification by the Chairman and Chief Executive
    Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                         |                      |        |    | 
|                                   |         | Certification by the Senior Vice President and
    Chief Financial Officer pursuant to Section 302 of the
    Sarbanes-Oxley Act of 2002                                                                        |                      |        |    | 
|                                   |         | Certification by the Chairman and Chief Executive
    Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                         |                      |        |    | 
|                                   |         | Certification by the Senior Vice President and
    Chief Financial Officer pursuant to Section 906 of the
    Sarbanes-Oxley Act of 2002                                                                        |                      |        |    | 

On March 28, 2003, Dole Food Company, Inc.
and its consolidated subsidiaries (the Company)
completed the going-private merger transaction with
DHM Holding Company, Inc. (HoldCo) described in
Note 3 to the Condensed Consolidated Financial Statements.
As a result of this transaction, the Companys results of
operations, financial position and cash flows prior to the date
of the going-private merger transaction are presented as the
Predecessor. The going-private merger transaction
and the Companys results of operations, financial position
and cash flows thereafter are presented as the
Successor.

2



---



##### Table of Contents






PART I.

FINANCIAL INFORMATION





ITEM 1.     FINANCIAL
STATEMENTS

DOLE FOOD COMPANY, INC.





CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS


(Unaudited)


(In thousands)


|                                                               |                            |               |           |             |  |   |           |         | 
|-------------------------------------------------------------- | -------------------------- | ------------- | --------- | ----------- |  | - | --------- | ------- | 
|                                                               |                            |              
|                                                               |                            | Quarter Ended
|                                                               |                            |              
|                                                               |                            | October 4,    |           | October 5, 
|                                                               |                            | 2003          |           | 2002       
|                                                               |                            |               |           |            
|                                                               |                            | Successor     |           | Predecessor
|                                                               |                            |               |           |            
|Revenues, net                                                  |                            | $             | 1,357,861 |             |  | $ | 1,254,494 |        
|Cost of products sold                                          |                            |               | 1,176,299 |             |  |   | 1,075,370 |        
|                                                               |                            |               |           |             |  |   |           |        
|                                                               | Gross margin               |               |           | 181,562     |  |   |           | 179,124 | 
|Selling, marketing and general and administrative
    expenses |                            |               | 125,664   |             |  |   | 140,083   |        
|                                                               |                            |               |           |             |  |   |           |        
|                                                               | Operating income           |               |           | 55,898      |  |   |           | 39,041  | 
|Other income, net                                              |                            |               | 409       |             |  |   | 4,114     |        
|Interest income                                                |                            |               | 1,755     |             |  |   | 3,996     |        
|Interest expense                                               |                            |               | 48,993    |             |  |   | 26,802    |        
|                                                               |                            |               |           |             |  |   |           |        
|                                                               | Income before income taxes |               |           | 9,069       |  |   |           | 20,349  | 
|Income taxes                                                   |                            |               | 1,539     |             |  |   | 5,699     |        
|                                                               |                            |               |           |             |  |   |           |        
|                                                               | Net income                 |               | $         | 7,530       |  |   | $         | 14,650  | 
|                                                               |                            |               |           |             |  |   |           |        

See Accompanying Notes to Condensed
Consolidated Financial Statements

3



---



##### Table of Contents



DOLE FOOD COMPANY, INC.




CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS


(Unaudited)


(In thousands)


|                                                               |                                                                                          |              |           |             |  |                |           |         |  |   |           |         | 
|-------------------------------------------------------------- | ---------------------------------------------------------------------------------------- | ------------ | --------- | ----------- |  | -------------- | --------- | ------- |  | - | --------- | ------- | 
|                                                               |                                                                                          | Two Quarters |           | Quarter     |  | Three Quarters
|                                                               |                                                                                          | Ended        |           | Ended       |  | Ended         
|                                                               |                                                                                          | October 4,   |           | March 22,   |  | October 5,    
|                                                               |                                                                                          | 2003         |           | 2003        |  | 2002          
|                                                               |                                                                                          |              |           |             |  |               
|                                                               |                                                                                          | Successor    |           | Predecessor |  | Predecessor   
|                                                               |                                                                                          |              |           |             |  |               
|Revenues, net                                                  |                                                                                          | $            | 2,574,683 |             |  | $              | 1,073,170 |         |  | $ | 3,432,094 |        
|Cost of products sold                                          |                                                                                          |              | 2,225,059 |             |  |                | 895,039   |         |  |   | 2,879,734 |        
|                                                               |                                                                                          |              |           |             |  |                |           |         |  |   |           |        
|                                                               | Gross margin                                                                             |              |           | 349,624     |  |                |           | 178,131 |  |   |           | 552,360 | 
|Selling, marketing and general and administrative
    expenses |                                                                                          |              | 225,147   |             |  |                | 89,341    |         |  |   | 314,424   |        
|                                                               |                                                                                          |              |           |             |  |                |           |         |  |   |           |        
|                                                               | Operating income                                                                         |              |           | 124,477     |  |                |           | 88,790  |  |   |           | 237,936 | 
|Other income (expense), net                                    |                                                                                          |              | (9,778    | )           |  |                | 2,045     |         |  |   | 5,625     |        
|Interest income                                                |                                                                                          |              | 2,867     |             |  |                | 2,700     |         |  |   | 8,596     |        
|Interest expense                                               |                                                                                          |              | 86,772    |             |  |                | 19,647    |         |  |   | 60,799    |        
|                                                               |                                                                                          |              |           |             |  |                |           |         |  |   |           |        
|                                                               | Income before income taxes and cumulative effect
    of a change in accounting principle |              |           | 30,794      |  |                |           | 73,888  |  |   |           | 191,358 | 
|Income taxes                                                   |                                                                                          |              | 5,363     |             |  |                | 13,100    |         |  |   | 53,581    |        
|                                                               |                                                                                          |              |           |             |  |                |           |         |  |   |           |        
|                                                               | Income before cumulative effect of a change in
    accounting principle                  |              |           | 25,431      |  |                |           | 60,788  |  |   |           | 137,777 | 
|Cumulative effect of a change in accounting
    principle      |                                                                                          |              |          |             |  |                |          |         |  |   | (119,917  | )      
|                                                               |                                                                                          |              |           |             |  |                |           |         |  |   |           |        
|                                                               | Net income                                                                               |              | $         | 25,431      |  |                | $         | 60,788  |  |   | $         | 17,860  | 
|                                                               |                                                                                          |              |           |             |  |                |           |         |  |   |           |        

See Accompanying Notes to Condensed
Consolidated Financial Statements

4



---



##### Table of Contents



DOLE FOOD COMPANY, INC.




CONDENSED CONSOLIDATED BALANCE
SHEETS


(Unaudited)


(In thousands, except share data)


|                                                                                            |                                                                                                                                                                                                        |                                                |           |              |           |  |           |         |           | 
|------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ---------------------------------------------- | --------- | ------------ | --------- |  | --------- | ------- | --------- | 
|                                                                                            |                                                                                                                                                                                                        | October 4,                                     |           | December 28,
|                                                                                            |                                                                                                                                                                                                        | 2003                                           |           | 2002        
|                                                                                            |                                                                                                                                                                                                        |                                                |           |             
|                                                                                            |                                                                                                                                                                                                        | Successor                                      |           | Predecessor 
|                                                                                            |                                                                                                                                                                                                        |                                                |           |             
|ASSETS                                                                                      |                                                                                                                                                                                                        |                                                |           |              |           |  |           |        
|Current Assets:                                                                             |                                                                                                                                                                                                        |                                                |           |              |           |  |           |        
|                                                                                            | Cash and cash equivalents                                                                                                                                                                              |                                                | $         | 67,066       |           |  | $         | 646,967 |          
|                                                                                            | Receivables, net of allowances of $55,738 and
    $70,938                                                                                                                                              |                                                |           | 533,093      |           |  |           | 505,427 |          
|                                                                                            | Inventories                                                                                                                                                                                            |                                                |           | 397,607      |           |  |           | 437,110 |          
|                                                                                            | Prepaid expenses                                                                                                                                                                                       |                                                |           | 49,122       |           |  |           | 42,467  |          
|                                                                                            | Deferred income tax assets                                                                                                                                                                             |                                                |           | 48,129       |           |  |           | 36,842  |          
|                                                                                            |                                                                                                                                                                                                        |                                                |           |              |           |  |           |        
|                                                                                            |                                                                                                                                                                                                        | Total current assets                           |           |              | 1,095,017 |  |           |         | 1,668,813 | 
|Investments                                                                                 |                                                                                                                                                                                                        |                                                | 82,493    |              |           |  | 80,939    |        
|Property, plant and equipment, net of accumulated
    depreciation of $329,216 and $917,983 |                                                                                                                                                                                                        |                                                | 1,366,082 |              |           |  | 1,026,565 |        
|Goodwill and intangible assets, net                                                         |                                                                                                                                                                                                        |                                                | 1,208,261 |              |           |  | 132,080   |        
|Other assets, net                                                                           |                                                                                                                                                                                                        |                                                | 140,465   |              |           |  | 128,455   |        
|                                                                                            |                                                                                                                                                                                                        |                                                |           |              |           |  |           |        
|                                                                                            |                                                                                                                                                                                                        | Total assets                                   |           | $            | 3,892,318 |  |           | $       | 3,036,852 | 
|                                                                                            |                                                                                                                                                                                                        |                                                |           |              |           |  |           |        
|LIABILITIES AND SHAREHOLDERS
    EQUITY                                                    |                                                                                                                                                                                                        |                                                |           |              |           |  |           |        
|Current Liabilities:                                                                        |                                                                                                                                                                                                        |                                                |           |              |           |  |           |        
|                                                                                            | Accounts payable and accrued liabilities                                                                                                                                                               |                                                | $         | 724,922      |           |  | $         | 710,944 |          
|                                                                                            | Current portion of long-term debt                                                                                                                                                                      |                                                |           | 24,848       |           |  |           | 230,813 |          
|                                                                                            | Notes payable                                                                                                                                                                                          |                                                |           | 3,719        |           |  |           | 11,601  |          
|                                                                                            |                                                                                                                                                                                                        |                                                |           |              |           |  |           |        
|                                                                                            |                                                                                                                                                                                                        | Total current liabilities                      |           |              | 753,489   |  |           |         | 953,358   | 
|Long-term debt                                                                              |                                                                                                                                                                                                        |                                                | 1,751,689 |              |           |  | 882,480   |        
|Deferred income tax liabilities                                                             |                                                                                                                                                                                                        |                                                | 462,832   |              |           |  | 2,459     |        
|Other long-term liabilities                                                                 |                                                                                                                                                                                                        |                                                | 455,753   |              |           |  | 424,154   |        
|Minority interests                                                                          |                                                                                                                                                                                                        |                                                | 27,620    |              |           |  | 29,290    |        
|Shareholders equity:                                                                       |                                                                                                                                                                                                        |                                                |           |              |           |  |           |        
|                                                                                            | Common stock  Successor: $0.001 par
    value; 1,000 shares authorized, issued and outstanding;
    Predecessor: no par; 80 million shares authorized,
    56.2 million shares issued and outstanding |                                                |           |             |           |  |           | 316,853 |          
|                                                                                            | Additional paid-in capital                                                                                                                                                                             |                                                |           | 340,032      |           |  |           | 66,319  |          
|                                                                                            | Retained earnings                                                                                                                                                                                      |                                                |           | 120,349      |           |  |           | 449,334 |          
|                                                                                            | Accumulated other comprehensive loss                                                                                                                                                                   |                                                |           | (19,446      | )         |  |           | (87,395 | )        
|                                                                                            |                                                                                                                                                                                                        |                                                |           |              |           |  |           |        
|                                                                                            |                                                                                                                                                                                                        | Total shareholders equity                     |           |              | 440,935   |  |           |         | 745,111   | 
|                                                                                            |                                                                                                                                                                                                        |                                                |           |              |           |  |           |        
|                                                                                            |                                                                                                                                                                                                        | Total liabilities and shareholders
    equity |           | $            | 3,892,318 |  |           | $       | 3,036,852 | 
|                                                                                            |                                                                                                                                                                                                        |                                                |           |              |           |  |           |        

See Accompanying Notes to Condensed
Consolidated Financial Statements

5



---



##### Table of Contents



DOLE FOOD COMPANY, INC.




CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS


(Unaudited)


(In thousands)


|                                                                                                   |                                                            |              |            |             |   |                |         |         |   |   |          |         |  
|-------------------------------------------------------------------------------------------------- | ---------------------------------------------------------- | ------------ | ---------- | ----------- | - | -------------- | ------- | ------- | - | - | -------- | ------- | -
|                                                                                                   |                                                            | Two Quarters |            | Quarter     |   | Three Quarters
|                                                                                                   |                                                            | Ended        |            | Ended       |   | Ended         
|                                                                                                   |                                                            | October 4,   |            | March 22,   |   | October 5,    
|                                                                                                   |                                                            | 2003         |            | 2003        |   | 2002          
|                                                                                                   |                                                            |              |            |             |   |               
|                                                                                                   |                                                            | Successor    |            | Predecessor |   | Predecessor   
|                                                                                                   |                                                            |              |            |             |   |               
|Operating activities                                                                               |                                                            |              |            |             |   |                |         |         |   |   |          |        
|Net income                                                                                         |                                                            | $            | 25,431     |             |   | $              | 60,788  |         |   | $ | 17,860   |        
|Adjustments to reconcile net income to net cash
    provided by operating activities:              |                                                            |              |            |             |   |                |         |         |   |   |          |        
|                                                                                                   | Cumulative effect of a change in accounting
    principle  |              |            |            |   |                |         |        |   |   |          | 119,917 |  
|                                                                                                   | Depreciation and amortization                              |              |            | 73,794      |   |                |         | 25,051  |   |   |          | 81,037  |  
|                                                                                                   | Purchase accounting step-up of inventory                   |              |            | 50,431      |   |                |         |        |   |   |          |        |  
|                                                                                                   | Asset write-offs and net (gain) loss on sale
    of assets |              |            | (305        | ) |                |         | 1,884   |   |   |          | (3,578  | )
|                                                                                                   | Equity earnings, net of distributions                      |              |            | (3,460      | ) |                |         | (2,273  | ) |   |          | (7,921  | )
|                                                                                                   | Provision for deferred income taxes                        |              |            | 11,437      |   |                |         | 2,201   |   |   |          | 24,155  |  
|                                                                                                   | Write-off of debt issuance costs                           |              |            | 12,552      |   |                |         |        |   |   |          |        |  
|                                                                                                   | Other                                                      |              |            | 8,960       |   |                |         | 2,211   |   |   |          | 10,682  |  
|Changes in operating assets and liabilities, net
    of effects from non-cash transactions:        |                                                            |              |            |             |   |                |         |         |   |   |          |        
|                                                                                                   | Receivables                                                |              |            | 77,487      |   |                |         | (78,749 | ) |   |          | 27,303  |  
|                                                                                                   | Inventories                                                |              |            | 49,329      |   |                |         | (6,195  | ) |   |          | (2,554  | )
|                                                                                                   | Prepaid expenses and other assets                          |              |            | (1,770      | ) |                |         | (5,662  | ) |   |          | 8,906   |  
|                                                                                                   | Accounts payable and accrued liabilities                   |              |            | (7,187      | ) |                |         | 5,253   |   |   |          | (74,412 | )
|                                                                                                   | Other long-term liabilities                                |              |            | 3,501       |   |                |         | (3,104  | ) |   |          | 7,185   |  
|                                                                                                   |                                                            |              |            |             |   |                |         |         |   |   |          |        
|Cash flow provided by operating activities                                                         |                                                            |              | 300,200    |             |   |                | 1,405   |         |   |   | 208,580  |        
|                                                                                                   |                                                            |              |            |             |   |                |         |         |   |   |          |        
|Investing activities                                                                               |                                                            |              |            |             |   |                |         |         |   |   |          |        
|Proceeds from sales of assets                                                                      |                                                            |              | 49,128     |             |   |                | 1,743   |         |   |   | 23,174   |        
|Net proceeds from sale of businesses and
    investments                                           |                                                            |              | 7,554      |             |   |                |        |         |   |   | 27,986   |        
|Purchases of investments                                                                           |                                                            |              | (1,022     | )           |   |                |        |         |   |   | (767     | )      
|Capital additions                                                                                  |                                                            |              | (62,668    | )           |   |                | (3,827  | )       |   |   | (183,521 | )      
|Repurchase of common stock and settlement of
    stock options in going-private merger transaction |                                                            |              | (1,470,184 | )           |   |                |        |         |   |   |         |        
|Transaction costs paid in going-private merger
    transaction                                     |                                                            |              | (66,494    | )           |   |                |        |         |   |   |         |        
|                                                                                                   |                                                            |              |            |             |   |                |         |         |   |   |          |        
|Cash flow used in investing activities                                                             |                                                            |              | (1,543,686 | )           |   |                | (2,084  | )       |   |   | (133,128 | )      
|                                                                                                   |                                                            |              |            |             |   |                |         |         |   |   |          |        
|Financing activities                                                                               |                                                            |              |            |             |   |                |         |         |   |   |          |        
|Repurchase of notes                                                                                |                                                            |              |           |             |   |                |        |         |   |   | (110,133 | )      
|Short-term debt borrowings                                                                         |                                                            |              | 5,224      |             |   |                | 7,936   |         |   |   | 26,114   |        
|Short-term debt repayments                                                                         |                                                            |              | (14,537    | )           |   |                | (6,834  | )       |   |   | (24,557  | )      
|Long-term debt borrowings, net of debt issuance
    costs                                          |                                                            |              | 1,797,112  |             |   |                | 5,034   |         |   |   | 403,694  |        
|Long-term debt repayments                                                                          |                                                            |              | (1,241,274 | )           |   |                | (6,777  | )       |   |   | (22,474  | )      
|Dividends paid to minority shareholders                                                            |                                                            |              | (5,331     | )           |   |                |        |         |   |   | (8,991   | )      
|Capital contribution by DHM Holding Company, Inc.                                                  |                                                            |              | 125,000    |             |   |                |        |         |   |   |         |        
|Proceeds from issuance of common stock
    (Predecessor)                                           |                                                            |              |           |             |   |                | 2,768   |         |   |   | 4,236    |        
|Dividends paid to common shareholders
    (Predecessor)                                            |                                                            |              |           |             |   |                | (8,440  | )       |   |   | (25,210  | )      
|                                                                                                   |                                                            |              |            |             |   |                |         |         |   |   |          |        
|Cash flow provided by (used in) financing
    activities                                           |                                                            |              | 666,194    |             |   |                | (6,313  | )       |   |   | 242,679  |        
|                                                                                                   |                                                            |              |            |             |   |                |         |         |   |   |          |        
|Effect of foreign exchange rate changes on cash
    and cash equivalents                           |                                                            |              | 3,358      |             |   |                | 1,025   |         |   |   | 3,420    |        
|                                                                                                   |                                                            |              |            |             |   |                |         |         |   |   |          |        
|(Decrease) increase in cash and cash equivalents                                                   |                                                            |              | (573,934   | )           |   |                | (5,967  | )       |   |   | 321,551  |        
|Cash and cash equivalents at beginning of period                                                   |                                                            |              | 641,000    |             |   |                | 646,967 |         |   |   | 361,326  |        
|                                                                                                   |                                                            |              |            |             |   |                |         |         |   |   |          |        
|Cash and cash equivalents at end of period                                                         |                                                            | $            | 67,066     |             |   | $              | 641,000 |         |   | $ | 682,877  |        
|                                                                                                   |                                                            |              |            |             |   |                |         |         |   |   |          |        

Supplemental cash flow information

Changes in assets and liabilities used in the
Companys condensed consolidated statement of cash flows
for the two quarters ended October 4, 2003 have been
determined using the Successors (Note 1) opening
balance sheet at March 23, 2003, which includes the
push-down of purchase accounting. Refer to Note 4 to the
condensed consolidated financial statements for a summary of the
values attributed to the Companys assets and liabilities
in the going-private merger transaction.

The statement of cash flows for the two quarters
ended October 4, 2003 excludes non-cash increases to
property, plant, and equipment, deferred tax assets and
long-term debt of approximately $43.4 million,
$4.7 million and $54.9 million, respectively, recorded
in connection with the Companys adoption of Financial
Accounting Standards Board Interpretation No. 46
(FIN 46), Consolidation of Variable
Interest Entities, effective March 23, 2003. During
the two quarters ended October 4, 2003, the Company
purchased containers that were previously held under capital
lease for $45.5 million.

See Accompanying Notes to Condensed
Consolidated Financial Statements

6



---



##### Table of Contents



DOLE FOOD COMPANY, INC.




NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS


(Unaudited)




|   |                      
|-- | ---------------------
|1. | BASIS OF PRESENTATION

In the opinion of management, the accompanying
unaudited condensed consolidated financial statements of Dole
Food Company, Inc. and its consolidated subsidiaries (the
Company) include all adjustments necessary, which
are of a normal recurring nature, to present fairly the
Companys financial position as of October 4, 2003 and
December 28, 2002; its results of operations for the
quarters ended October 4, 2003 and October 5, 2002 and
two quarters ended October 4, 2003, the quarter ended
March 22, 2003 and three quarters ended October 5,
2002; and its cash flows for the two quarters ended
October 4, 2003, the quarter ended March 22, 2003 and
three quarters ended October 5, 2002. The Company operates
under a 52/53-week year and the quarters ended October 4,
2003 and October 5, 2002 are sixteen weeks in duration. For
a summary of significant accounting policies used in the
preparation of these financial statements, refer to the Notes to
Consolidated Financial Statements in Item 8 of the
Companys Annual Report on Form 10-K
(10-K) for the year ended December 28, 2002 and
the new accounting policies adopted by the Company in
Note 2 below.

On March 28, 2003, the Company completed the
going-private merger transaction with DHM Holding Company, Inc.
(HoldCo) described in Note 3. As a result of
this transaction, the Companys results of operations,
financial position and cash flows prior to the date of the
going-private merger transaction are presented as the
Predecessor. The going-private merger transaction
and the Companys results of operations, financial position
and cash flows thereafter are presented as the
Successor.

The going-private merger transaction has been
accounted for as a purchase at the HoldCo level with the related
purchase accounting pushed-down to the Company. For convenience,
the allocation of the purchase price was done as of
March 23, 2003, the first day of the Companys 2003
second fiscal quarter as opposed to the actual transaction date
of March 28, 2003 (Note 4).

Interim results are subject to seasonal
variations and are not necessarily indicative of the results of
operations for a full year. The Companys operations are
sensitive to a number of factors including weather-related
phenomena and their effects on industry volumes, prices, product
quality and costs. Operations are also sensitive to fluctuations
in currency exchange rates in both sourcing and selling
locations as well as economic crises and security risks in
developing countries. For additional information on market risks
and related matters affecting the Companys financial
position and results of operations, refer to Items 1, 7 and
7A of the Companys 10-K for the year ended
December 28, 2002.

Certain prior year amounts have been reclassified
to conform with the 2003 presentation.



|   |                                    
|-- | -----------------------------------
|2. | ADOPTION OF NEW ACCOUNTING POLICIES

In the quarters ended March 22, 2003 and
June 14, 2003, the Company adopted new accounting policies
in accordance with the provisions of the following recently
issued accounting pronouncements. With the exception of the
adoption of a new accounting policy for interests in
variable-interest entities acquired before February 1,
2003, these new accounting policies became effective
December 29, 2002, the first day of the Companys 2003
fiscal year:

Asset Retirement Obligations:In June 2001, the Financial Accounting
Standards Board (FASB) issued Statement of Financial
Accounting Standards No. 143 (FAS 143),
Accounting for Asset Retirement Obligations. This
standard provides accounting guidelines for the cost of legal
obligations associated with the retirement of long-lived assets.
FAS 143 requires that companies recognize the fair value of
a liability for asset retirement obligations in the period in
which the obligations are incurred and capitalize that amount as
part of the book value of the long-lived asset. The resulting
net cost is then depreciated over the remaining life of the
underlying long-lived asset. The adoption of FAS 143 did
not have a material impact on the Companys financial
condition or results of operations.

7



---



##### Table of Contents



DOLE FOOD COMPANY, INC.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(Unaudited)


Restructuring Costs:In June 2002, the FASB issued
Statement of Financial Accounting Standards No. 146
(FAS 146), Accounting for Costs
Associated with Exit or Disposal Activities. FAS 146
addresses financial accounting and reporting for costs
associated with exit or disposal activities and nullifies
Emerging Issues Task Force Issue No. 94-3
(EITF 94-3), Liability Recognition for
Certain Employee Termination Benefits and Other Costs to Exit an
Activity (including Certain Costs Incurred in a
Restructuring). This statement requires that the fair
value of an initial liability for a cost associated with an exit
or disposal activity be recognized when the liability is
incurred as opposed to when the entity commits to an exit plan,
thereby eliminating the definition and requirements for
recognition of exit costs. The adoption of FAS 146 did not
have a material impact on the Companys financial condition
or results of operations.

Guarantees:In
November 2002, the FASB issued FASB Interpretation No. 45
(FIN 45), Guarantors Accounting and
Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others. FIN 45
elaborates on the disclosures to be made by a guarantor about
its obligations under certain types of guarantees. FIN 45
also clarifies that a guarantor is required to recognize, at the
inception of a guarantee, a liability for the fair value of the
obligation undertaken in issuing the guarantee. FIN 45
specifically identifies obligations that are excluded from the
provisions related to recognizing a liability at inception;
however, these guarantees are subject to the disclosure
requirements of FIN 45. The recognition and measurement
provisions of FIN 45 are applicable on a prospective basis
to guarantees issued or modified after the beginning of the
fiscal year in which FIN 45 is adopted. The adoption of
FIN 45 did not have a material impact on the Companys
financial condition or results of operations.

Stock-Based Compensation:In December 2002, the FASB issued
Statement of Financial Accounting Standards No. 148
(FAS 148), Accounting for Stock-Based
Compensation  Transition and Disclosure, an amendment
of FASB Statement No. 123. FAS 148 amends
Statement of Financial Accounting Standards No. 123
(FAS 123), Accounting for Stock-Based
Compensation, to provide alternative methods of transition
for a voluntary change to the fair value based method of
accounting for stock-based employee compensation. Beginning on
December 29, 2002, the Company elected to adopt the fair
value method of accounting for stock-based employee
compensation. Prior to December 29, 2002, the Company
applied the intrinsic value method of accounting for stock
options issued to employees. The Company has elected to apply
the prospective method of adoption outlined in FAS 148. The
prospective method applies the recognition provisions of
FAS 123 to all employee awards granted, modified or settled
after the beginning of the fiscal years in which the recognition
provisions are first applied. The adoption of the fair value
method of accounting for stock options issued to employees, on a
prospective basis, did not have a material impact on the
Companys financial condition or results of operations for
the quarter ended March 22, 2003. In connection with the
going-private merger transaction, the Company settled or
cancelled all outstanding stock options.

Special-Purpose Entities:In January 2003, the FASB issued FASB
Interpretation No. 46 (FIN 46),
Consolidation of Variable Interest Entities. This
standard clarifies the application of Accounting Research
Bulletin No. 51, Consolidated Financial
Statements, and addresses consolidation by business
enterprises of variable interest entities (more commonly known
as Special-Purpose Entities or SPEs). FIN 46 requires
existing unconsolidated variable interest entities to be
consolidated by their primary beneficiaries if the entities do
not effectively disperse risk among the parties involved. This
statement is immediately effective for variable interest
entities created or in which an enterprise obtains an interest
after January 31, 2003. In connection with the
going-private merger transaction, effective March 23, 2003,
the Company elected to early adopt the provisions of FIN 46
applicable to interests in variable interest entities acquired
before February 1, 2003. The adoption of FIN 46
resulted in the Company consolidating the variable-interest
entity that owns the Companys corporate headquarters
building. The consolidation resulted in an increase in the
Companys long-term debt of approximately
$54.9 million and an increase in assets, primarily land and
buildings, of approximately $48.1 million. The difference
of approximately $6.8 million was allocated to goodwill in
purchase accounting. In addition, for the quarter and two
quarters ended October 4, 2003, the consolidation of

8



---



##### Table of Contents



DOLE FOOD COMPANY, INC.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(Unaudited)


the variable interest entity resulted in an
increase in interest expense of approximately $0.8 million
and $1.4 million, respectively, with a corresponding
decrease in rent expense, and additional depreciation expense of
approximately $0.5 million and $0.9 million,
respectively.

In the quarter ended October 4, 2003, the
Company adopted new accounting policies in accordance with the
provisions of the following recently issued accounting
pronouncements. These policies became effective June 15,
2003, the first day of the Companys third fiscal quarter:

Derivative Instruments and Hedging
Activities:In April 2003, the FASB
issued FASB Statement of Financial Accounting Standards
No. 149 (FAS 149), Amendments of
Statement 133 on Derivative Instruments and Hedging
Activities. FAS 149 amends and clarifies financial
accounting and reporting for derivative instruments, including
certain instruments embedded in other contracts and for hedging
activities under FASB Statement No. 133, Accounting
for Derivative Instruments and Hedging Activities. This
statement requires that contracts with comparable
characteristics be accounted for similarly. In particular, this
statement clarifies under what circumstances a contract with an
initial net investment meets the characteristic of a derivative,
clarifies when a derivative contains a financing component,
amends the definition of an underlying hedged risk to conform to
language used in FIN 45 and amends certain other existing
pronouncements. This statement, the provisions of which are to
be applied prospectively, is effective for contracts entered
into or modified after June 30, 2003. The adoption of FAS
149 did not have a material impact on the Companys
financial condition or results of operations.

Financial Instruments:In May 2003, the FASB issued FASB
Statement of Financial Accounting Standards No. 150
(FAS 150), Accounting for Certain
Financial Instruments with Characteristics of both Liabilities
and Equity. FAS 150 establishes standards for how an
issuer classifies and measures certain financial instruments
with characteristics of both liabilities and equity. The
requirements of this statement apply to issuers
classification and measurement of freestanding financial
instruments, including those that comprise more than one option
or forward contract. This statement does not apply to features
that are embedded in a financial instrument that is not a
derivative in its entirety. This statement also addresses
questions about the classification of certain financial
instruments that embody obligations to issue equity shares. The
adoption of FAS 150 did not have a material impact on the
Companys financial condition or results of operations.

The adoption of the above-mentioned accounting
policies have had no impact on the Companys critical
accounting policies and estimates as disclosed in the
Companys Annual Report on Form 10-K for the year
ended December 28, 2002.



|   |                                                      
|-- | -----------------------------------------------------
|3. | GOING-PRIVATE MERGER AND REFINANCING
    TRANSACTIONS

On December 18, 2002, the Company signed a
definitive merger agreement with David H. Murdock, the
Companys Chairman and Chief Executive Officer, pursuant to
which Mr. Murdock would acquire the approximately 76% of
the Companys common stock that he and his affiliates did
not already own for $33.50 per share in cash. On March 26,
2003, the merger was approved at a special meeting of the
Companys stockholders. The transaction was successfully
completed on March 28, 2003 and the Company became wholly
owned by Mr. Murdock through DHM Holding Company, Inc., a
Delaware corporation (HoldCo). As a result of the
transaction, the Companys outstanding shares of common
stock were retired and all outstanding stock options were
settled in cash, except those options held by Mr. Murdock
that were cancelled without payment.

The purchase price of all of the outstanding
common stock of the Company not already owned by
Mr. Murdock, plus transaction costs, was approximately
$1.55 billion. The funds necessary to purchase these shares
of the Company consisted of a $125 million capital
contribution by HoldCo, funds borrowed under $1.125 billion of
new senior secured credit facilities (consisting of
$825 million of term loan facilities and $300 million
of revolving credit facilities) and the issuance of
$475 million principal amount of 8.875% Senior

9



---



##### Table of Contents



DOLE FOOD COMPANY, INC.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(Unaudited)


Notes due 2011 (the 2011 Notes). The
2011 Notes were offered within the United States only to
qualified institutional investors pursuant to Rule 144A
under the Securities Act of 1933 (the Securities
Act) and to persons outside the United States in
compliance with Regulation S under the Securities Act. The
Credit Agreement with respect to the new senior secured credit
facilities and the Indenture with respect to the 2011 Notes
contain significant restrictions and covenants affecting, among
other things, the operations and finances of the Company and its
subsidiaries.

In addition, on March 28, 2003, the Company
repaid its 7% Senior Notes due 2003 and called for redemption
its 6.375% Senior Notes due 2005 with outstanding balances of
approximately $209.8 million and $300 million,
respectively, at March 22, 2003. The Companys 7.25%
Senior Notes due 2009 and 7.875% Debentures due 2013 remain
outstanding; however, the terms of both the Senior Notes due
2009 and Debentures due 2013 were modified to provide for
substantially the same interest rates, covenants and guarantees
from certain of the Companys subsidiaries as are provided
for by the 2011 Notes. The modifications provide for interest at
8.625% on the Senior Notes due 2009 and 8.75% on the Debentures
due 2013.

In connection with the transaction, the Company
sold its interest in an aircraft under an operating
sale-leaseback agreement for approximately $28.9 million, which
approximated its book value. The Company also purchased shipping
containers for approximately $76.5 million that were
previously leased under separate capital and operating lease
agreements and modified the provisions of its corporate
headquarters financing facility to provide for substantially the
same interest rate as the new senior secured credit facilities.

On May 29, 2003, the Company issued and sold
$400 million aggregate principal amount of 7.25% Senior
Notes due 2010 (the 2010 Notes) in an offering
exempt from the registration requirements of the Securities Act
of 1933. The Company used the net proceeds from this offering of
approximately $392.7 million, together with other available
cash of $7.3 million, to prepay $400 million of the
term loans under the senior secured credit facility. In
connection with the offering, the Company and the lenders under
the senior secured credit facility effected certain amendments
to the Companys senior secured credit facility. The
indenture with respect to the 2010 Notes contains covenants and
restrictions substantially identical to those under the 2011
Notes.

The going-private merger transaction has been
accounted for as a purchase at the HoldCo level with the related
purchase accounting pushed-down to the Company as of the date of
the transaction.

In July 2003, the Company filed two registration
statements on Form S-4 with the Securities and Exchange
Commission (SEC) offering the holders of the 2011
Notes and the 2010 Notes the opportunity to exchange their notes
for publicly registered notes having substantially identical
terms, except for certain restrictions on transfer that pertain
to the original notes. These registration statements were
declared effective on July 25, 2003. The exchange offers,
which commenced on July 25, 2003 and expired on
August 25, 2003, resulted in all notes being exchanged for
publicly registered notes.



|   |                                                                     
|-- | --------------------------------------------------------------------
|4. | ALLOCATION OF PURCHASE PRICE IN GOING-PRIVATE
    MERGER TRANSACTION

The Company has prepared a preliminary allocation
of the purchase price to the assets acquired and liabilities
assumed based upon their respective fair values at the date of
the going-private transaction. In accordance with EITF Issue
No. 88-16, Basis in Leveraged Buyout
Transactions, Mr. Murdocks continuing residual
interest has been reflected at its original cost adjusted for
his share of the Companys earnings, losses, dividends and
equity adjustments since the date of original acquisition
(predecessor basis). In accordance with EITF Issue
No. 90-12, Allocating Basis to Individual Assets and
Liabilities for Transactions within the Scope of Issue
No. 88-16, only a partial step-up of assets and
liabilities to fair value has been recorded in purchase
accounting. The partial step-up, which reflects
Mr. Murdocks acquisition of the common stock of the
Company that he did not already own, has resulted in the
Companys assets and liabilities being adjusted

10



---



##### Table of Contents



DOLE FOOD COMPANY, INC.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(Unaudited)


by approximately 76% of the difference between
their fair value at the date of acquisition and their historical
carrying cost. Fair value was determined using a variety of
valuation methods, including third party appraisals.

For convenience, the allocation of the purchase
price was done as of March 23, 2003, the first day of the
Companys 2003 second fiscal quarter as opposed to the
actual transaction date of March 28, 2003. The following
represents the estimated values attributable to the assets
acquired and liabilities assumed in the going-private merger
transaction. These values include the historical values
attributable to Mr. Murdocks predecessor basis.
Changes may occur as additional information becomes available.

|                                                                                                                        |                                                                   |                     |           |           |           | 
|----------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------- | ------------------- | --------- | --------- | --------- | 
|(In thousands)                                                                                                          |                                                                   |                    
|Amount paid for 43.2 million shares of
    common stock and the settlement of approximately 3 million
    stock options |                                                                   | $                   | 1,476,717 |          
|Transaction fees and costs                                                                                              |                                                                   |                     | 69,372    |          
|                                                                                                                        |                                                                   |                     |           |          
|Total purchase price, including transaction
    expenses                                                                |                                                                   | $                   | 1,546,089 |          
|                                                                                                                        |                                                                   |                     |           |          
|The total purchase price has been allocated as
    follows:                                                             |                                                                   |                     |           |          
|Current assets                                                                                                          |                                                                   | $                   | 1,788,031 |          
|Investments                                                                                                             |                                                                   |                     | 74,540    |          
|Property, plant and equipment                                                                                           |                                                                   |                     | 1,419,836 |          
|Intangible assets                                                                                                       |                                                                   |                     | 743,558   |          
|Goodwill                                                                                                                |                                                                   |                     | 470,252   |          
|Other assets, net                                                                                                       |                                                                   |                     | 122,886   |          
|                                                                                                                        |                                                                   |                     |           |          
|                                                                                                                        | Total assets acquired                                             |                     |           | 4,619,103 |          
|Current liabilities                                                                                                     |                                                                   |                     | 957,751   |          
|Long-term debt                                                                                                          |                                                                   |                     | 918,579   |          
|Other long-term liabilities                                                                                             |                                                                   |                     | 443,603   |          
|Deferred income tax liabilities                                                                                         |                                                                   |                     | 435,515   |          
|Minority interests                                                                                                      |                                                                   |                     | 30,563    |          
|                                                                                                                        |                                                                   |                     |           |          
|                                                                                                                        | Total liabilities assumed                                         |                     |           | 2,786,011 |          
|Net assets                                                                                                              |                                                                   |                     | 1,833,092 |          
|                                                                                                                        | Less: Historical net assets attributable to
    Predecessor basis |                     |           | 186,958   |          
|                                                                                                                        | Less: Goodwill attributable to Predecessor basis                  |                     |           | 100,045   |          
|                                                                                                                        |                                                                   |                     |           |          
|                                                                                                                        |                                                                   | Net assets acquired |           | $         | 1,546,089 | 
|                                                                                                                        |                                                                   |                     |           |          

Of the $743.6 million allocated to
intangible assets, $694.5 million relates to the
Companys trademarks, trade names and other related
intangibles, which have an indefinite life and as such, will not
be amortized. The remaining $49.1 million is attributable
to licenses and customer relationships with finite lives, which
will be amortized over a weighted-average period of
approximately 7 years.

The total amount allocated to goodwill of
$470.3 million includes $100 million that is
attributable to Mr. Murdocks predecessor basis. The
allocation is still preliminary at this time. None of this
goodwill is expected to be deductible by the Company for tax
purposes. Refer to Note 9 for additional information on
goodwill and acquired intangible assets.

11



---



##### Table of Contents



DOLE FOOD COMPANY, INC.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(Unaudited)




|   |                                                               
|-- | --------------------------------------------------------------
|5. | PRO FORMA INFORMATION FOR GOING-PRIVATE MERGER
    TRANSACTION

The following unaudited pro forma financial
information was prepared as if the going-private merger
transaction and refinancing transaction had occurred at the
beginning of each of the periods presented (in thousands):

|                  |  |                 |           |                 |  |   |           |  
|----------------- |  | --------------- | --------- | --------------- |  | - | --------- | -
|                  |  |                
|                  |  | Quarter Ended  
|                  |  |                
|                  |  | October 4, 2003 |           | October 5, 2002
|                  |  |                 |           |                
|Revenues, net     |  | $               | 1,357,861 |                 |  | $ | 1,254,494 |  
|Net income (loss) |  | $               | (25,936   | )               |  | $ | (48,121   | )

|                                                                        |  |                      |           |                 |  |   |           |  
|----------------------------------------------------------------------- |  | -------------------- | --------- | --------------- |  | - | --------- | -
|                                                                        |  |                     
|                                                                        |  | Three Quarters Ended
|                                                                        |  |                     
|                                                                        |  | October 4, 2003      |           | October 5, 2002
|                                                                        |  |                      |           |                
|Revenues, net                                                           |  | $                    | 3,647,853 |                 |  | $ | 3,432,094 |  
|Income before cumulative effect of a change in
    accounting principle |  | $                    | 57,834    |                 |  | $ | 28,373    |  
|Net income (loss)                                                       |  | $                    | 57,834    |                 |  | $ | (91,544   | )

These unaudited pro forma results have been
prepared for comparative purposes only and primarily include
adjustments for depreciation and amortization arising from the
step-up of assets in the merger transaction, interest expense on
debt issued in connection with the merger and refinancing
transactions, the write-off of debt issuance costs on the early
repayment of debt, and related income tax adjustments. Included
in net income for the quarter and three quarters ended
October 4, 2003 and the pro forma results for the quarter
and three quarters ended October 5, 2002, is approximately
$10.6 million of pre-tax expense related to the write-off
of debt issuance costs due to the early repayment of debt in the
going-private merger and refinancing transactions. Included in
net income for the three quarters ended October 4, 2003 is
approximately $6.9 million of pre-tax expense related to a
litigation settlement. Included in net income for the three
quarters ended October 5, 2002 is a goodwill impairment
charge of approximately $119.9 million that resulted from
the adoption of a new accounting policy in the quarter ended
March 23, 2002.

Excluding the impact of the refinancing
transaction, pro forma net income (loss) would have been
$(17.2) million and $(38.3) million, respectively, in
the quarters ended October 4, 2003 and October 5,
2002, and $59.8 million and $(78.3) million,
respectively, in the three quarters then ended. The refinancing
transaction had no impact on pro forma revenues.

The pro forma information is not necessarily
indicative of the results that would have occurred had the
going-private merger and refinancing transactions occurred at
the beginning of the periods presented, nor is it necessarily
indicative of future results.



|   |             
|-- | ------------
|6. | INCOME TAXES

As a result of the consummation of the
going-private merger transaction described in Note 3,
income tax expense for the quarter ended March 22, 2003 was
based on earnings for the period from December 29, 2002
through March 22, 2003, to reflect the final separate
financial reporting period for the Company in its predecessor
form. After the consummation of the going-private transaction,
the results of operations are attributable to the new successor
company.

The income tax expense for the quarter and the
two quarters ended October 4, 2003 of $1.5 million and
$5.4 million, respectively, reflects the Companys
expected effective income tax rate of approximately 17% for the
three-quarter successor period ending January 3, 2004. The
income tax expense of approximately $13.1 million for the
quarter ended March 22, 2003 reflects the Companys
effective income tax rate for that quarter of approximately 18%.
The income tax expense for the quarter and three quarters ended
October 5,

12



---



##### Table of Contents



DOLE FOOD COMPANY, INC.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(Unaudited)


2002 of approximately $5.7 million and
$53.6 million, respectively, reflects the Companys
then expected effective income tax rate for the full fiscal year
of 28%. The reduction in the effective income tax in the current
year is primarily due to a change in the mix of taxable
earnings, as well as the impact of tax refunds received in the
current year. For all periods presented, the Companys
effective tax rate differs from the U.S. federal statutory
rate primarily due to earnings from operations being taxed in
foreign jurisdictions at a net effective rate lower than the
U.S. rate. No U.S. taxes have been provided on these
earnings because such earnings are intended to be indefinitely
invested outside the U.S.

7. DIVIDENDS

No dividends were declared in the two quarters
ended October 4, 2003. With respect to the predecessor,
during the quarter ended March 22, 2003, the Company
declared and paid dividends of approximately $8.4 million
on its common shares representing a quarterly dividend of
15 cents per share. During the first three quarters of
2002, the Company declared and paid dividends of approximately
$25 million on its common shares, representing its
quarterly dividends of 15 cents per share for the first,
second and third quarters of 2002. The Companys ability to
declare future dividends is restricted under the terms of its
new senior secured credit facilities.



|   |            
|-- | -----------
|8. | INVENTORIES

The major classes of inventories were as follows
(in thousands):

|                                   |  |            |         |              |  |   |         | 
|---------------------------------- |  | ---------- | ------- | ------------ |  | - | ------- | 
|                                   |  | October 4, |         | December 28,
|                                   |  | 2003       |         | 2002        
|                                   |  |            |         |             
|                                   |  | Successor  |         | Predecessor 
|                                   |  |            |         |             
|Finished products                  |  | $          | 178,859 |              |  | $ | 180,580 | 
|Raw materials and work in progress |  |            | 94,011  |              |  |   | 111,725 | 
|Crop-growing costs                 |  |            | 73,337  |              |  |   | 85,870  | 
|Operating supplies and other       |  |            | 51,400  |              |  |   | 58,935  | 
|                                   |  |            |         |              |  |   |         | 
|                                   |  | $          | 397,607 |              |  | $ | 437,110 | 
|                                   |  |            |         |              |  |   |         | 

Included in crop-growing costs at October 4,
2003 is a remaining balance of approximately $8.9 million
related to unharvested fruit valued in purchase accounting. This
amount will be fully amortized in the fourth quarter of 2003.

13



---



##### Table of Contents



DOLE FOOD COMPANY, INC.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(Unaudited)




|   |                                            
|-- | -------------------------------------------
|9. | GOODWILL AND ACQUIRED INTANGIBLE
    ASSETS

The Company had the following identifiable
intangible assets that were valued in connection with the
going-private merger transaction (in thousands):

|                                          |                                                          |            |         |         | 
|----------------------------------------- | -------------------------------------------------------- | ---------- | ------- | ------- | 
|                                          |                                                          | October 4,
|                                          |                                                          | 2003      
|                                          |                                                          |           
|                                          |                                                          | Successor 
|                                          |                                                          |           
|Amortized intangible assets:              |                                                          |            |         |        
|                                          | Customer relationships                                   |            | $       | 28,351  | 
|                                          | Licenses                                                 |            |         | 20,688  | 
|                                          |                                                          |            |         |        
|                                          |                                                          |            | 49,039  |        
|Accumulated amortization                  |                                                          |            | (5,549  | )      
|                                          |                                                          |            |         |        
|Amortized intangibles, net                |                                                          |            | 43,490  |        
|Unamortized intangible assets:            |                                                          |            |         |        
|                                          | Trademark, trade names and other related
    intangibles |            |         | 694,518 | 
|                                          |                                                          |            |         |        
|Total identifiable intangible assets, net |                                                          | $          | 738,008 |        
|                                          |                                                          |            |         |        

Amortization expense of identifiable intangibles
totaled $5.5 million for the two quarters ended
October 4, 2003. Estimated remaining amortization expense
associated with the Companys identifiable intangible
assets in each of the next five fiscal years is as follows (in
thousands):

|            |  |        |        | 
|----------- |  | ------ | ------ | 
|Fiscal Year |  | Amount
|            |  |       
|2003        |  | $      | 2,378  | 
|2004        |  | $      | 10,305 | 
|2005        |  | $      | 10,305 | 
|2006        |  | $      | 2,834  | 
|2007        |  | $      | 2,834  | 

Trademarks, trade names and other related
intangibles are considered to have indefinite lives because they
are expected to generate cash flows indefinitely and as such
will not be amortized, but will be tested annually for
impairment, or more frequently if events or changes in
circumstances indicate that the assets might be impaired. The
Company had no identifiable intangibles at December 28,
2002.

During the quarter ended October 4, 2003,
the Company increased goodwill resulting from the transaction by
$40.1 million from $430.2 million to
$470.3 million. The increase was primarily due to an
increase in deferred tax liabilities of $34.6 million and
additional transaction costs of $5.3 million. Pursuant to
Statement of Financial Accounting Standards (SFAS)
No. 142, Goodwill and Other Intangible Assets,
the goodwill resulting from the going-private merger
transactions will not be amortized but will be subject to an
annual impairment test. The Companys Predecessor goodwill
balance of approximately $132.1 million at
December 28, 2002 was eliminated in purchase accounting.

14



---



##### Table of Contents



DOLE FOOD COMPANY, INC.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(Unaudited)




|    |               
|--- | --------------
|10. | LONG-TERM DEBT

Long-term debt consisted of the following amounts
(in thousands):

|                                          |                                                                                                     |            |           |              |  |   |           |         | 
|----------------------------------------- | --------------------------------------------------------------------------------------------------- | ---------- | --------- | ------------ |  | - | --------- | ------- | 
|                                          |                                                                                                     | October 4, |           | December 28,
|                                          |                                                                                                     | 2003       |           | 2002        
|                                          |                                                                                                     |            |           |             
|                                          |                                                                                                     | Successor  |           | Predecessor 
|                                          |                                                                                                     |            |           |             
|Unsecured debt:                           |                                                                                                     |            |           |              |  |   |           |        
|                                          | 7% notes due 2003                                                                                   |            | $         |             |  |   | $         | 209,756 | 
|                                          | 6.375% notes due 2005                                                                               |            |           |             |  |   |           | 300,000 | 
|                                          | 8.625% notes due 2009                                                                               |            |           | 400,000      |  |   |           | 400,000 | 
|                                          | 7.25% notes due 2010                                                                                |            |           | 400,000      |  |   |           |        | 
|                                          | 8.875% notes due 2011                                                                               |            |           | 475,000      |  |   |           |        | 
|                                          | 8.75% debentures due 2013                                                                           |            |           | 155,000      |  |   |           | 155,000 | 
|                                          | Various other notes due 20032005 at a
    weighted-average interest rate of 16.33% in 2002         |            |           |             |  |   |           | 4,382   | 
|Secured debt:                             |                                                                                                     |            |           |              |  |   |           |        
|                                          | Revolving credit facility                                                                           |            |           | 15,000       |  |   |           |        | 
|                                          | Term loan facilities                                                                                |            |           | 272,603      |  |   |           |        | 
|                                          | Contracts and notes due 20032014, at a
    weighted-average interest rate of 6.28% (6.06% in 2002) |            |           | 2,729        |  |   |           | 6,322   | 
|Capital lease obligations                 |                                                                                                     |            | 3,359     |              |  |   | 40,546    |        
|Corporate headquarters financing facility |                                                                                                     |            | 54,927    |              |  |   |          |        
|Unamortized debt discount                 |                                                                                                     |            | (2,081    | )            |  |   | (2,713    | )      
|                                          |                                                                                                     |            |           |              |  |   |           |        
|                                          |                                                                                                     |            | 1,776,537 |              |  |   | 1,113,293 |        
|Current maturities                        |                                                                                                     |            | (24,848   | )            |  |   | (230,813  | )      
|                                          |                                                                                                     |            |           |              |  |   |           |        
|                                          |                                                                                                     | $          | 1,751,689 |              |  | $ | 882,480   |        
|                                          |                                                                                                     |            |           |              |  |   |           |        

In connection with the going-private merger and
refinancing transactions described in Note 3, the Company
issued additional notes and term loans, repaid existing notes
and repaid approximately $37.3 million of a capital lease
obligation related to shipping containers. The Company wrote off
$2 million of deferred debt issuance costs during the
quarter ended October 4, 2003 as a result of the prepayment
of term loan facilities of $140 million during the quarter.
The Company wrote off $12.6 million of deferred debt
issuance costs during the two quarters ended October 4,
2003, as a result of the prepayment of the term loan facilities
of $540 million in connection with the refinancing
transaction and the additional prepayments during the two
quarters. Weighted-average interest rates on the revolving
credit and term loan facilities were approximately 6.25% and
5.1%, respectively at October 4, 2003.

At October 4, 2003, the Company had
approximately $245.7 million available under the
$300 million revolving credit portion of the senior secured
credit facilities. The revolving credit facility and term loan
facilities expire in 2008.

Provisions under the senior secured credit
facilities and the indentures to the Companys senior notes
and debentures require the Company to comply with certain
covenants. These covenants include financial performance
measures, such as a minimum required interest coverage ratio, a
minimum fixed charge coverage ratio, minimum quarterly earnings
and maximum permitted leverage ratios, as well as limitations
on, among other things, indebtedness, capital expenditures,
investments, loans to subsidiaries, employees and third

15



---



##### Table of Contents



DOLE FOOD COMPANY, INC.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(Unaudited)


parties, the issuance of guaranties and the
payment of dividends. At October 4, 2003, the Company was
in compliance with all applicable covenants.

Maturities with respect to long-term debt as of
October 4, 2003 were as follows (in thousands):

|                    |  |        |           | 
|------------------- |  | ------ | --------- | 
|Fiscal Year         |  | Amount
|                    |  |       
|2003                |  | $      | 5,332     | 
|2004                |  |        | 27,475    | 
|2005                |  |        | 81,236    | 
|2006                |  |        | 25,833    | 
|2007                |  |        | 25,802    | 
|2008 and thereafter |  |        | 1,610,859 | 
|                    |  |        |           | 
|Total               |  | $      | 1,776,537 | 
|                    |  |        |           | 



|    |                     
|--- | --------------------
|11. | COMPREHENSIVE INCOME

The components of comprehensive income were as
follows in each period (in thousands):

|                                                                                             |  |               |        |              |  |               |        |                |  |             |         |   |  |   |        |   |  |   |         |  
|-------------------------------------------------------------------------------------------- |  | ------------- | ------ | ------------ |  | ------------- | ------ | -------------- |  | ----------- | ------- | - |  | - | ------ | - |  | - | ------- | -
|                                                                                             |  |               |        | Two Quarters |  |               |        | Three Quarters
|                                                                                             |  | Quarter Ended |        | Ended        |  | Quarter Ended |        | Ended         
|                                                                                             |  |               |        |             
|                                                                                             |  |               |        |             
|                                                                                             |  | October 4,    |        | October 5,   |  | October 4,    |        | March 22,      |  | October 5, 
|                                                                                             |  | 2003          |        | 2002         |  | 2003          |        | 2003           |  | 2002       
|                                                                                             |  |               |        |              |  |               |        |                |  |            
|                                                                                             |  | Successor     |        | Predecessor  |  | Successor     |        | Predecessor    |  | Predecessor
|                                                                                             |  |               |        |              |  |               |        |                |  |            
|Net income                                                                                   |  | $             | 7,530  |              |  | $             | 14,650 |                |  | $           | 25,431  |   |  | $ | 60,788 |   |  | $ | 17,860  |  
|Unrealized foreign currency translation gain
    (loss), net                                 |  |               | 2,590  |              |  |               | 4,716  |                |  |             | 15,667  |   |  |   | (195   | ) |  |   | 13,811  |  
|Reclassification of translation losses realized
    upon the disposition of foreign entities |  |               | 2,423  |              |  |               | 5,917  |                |  |             | 2,423   |   |  |   |       |   |  |   | 5,917   |  
|Unrealized net (loss) gain on cash flow
    hedging instruments                              |  |               | (5,341 | )            |  |               | (2,348 | )              |  |             | (14,589 | ) |  |   | 4,192  |   |  |   | (12,612 | )
|                                                                                             |  |               |        |              |  |               |        |                |  |             |         |   |  |   |        |   |  |   |         |  
|Comprehensive income                                                                         |  | $             | 7,202  |              |  | $             | 22,935 |                |  | $           | 28,932  |   |  | $ | 64,785 |   |  | $ | 24,976  |  
|                                                                                             |  |               |        |              |  |               |        |                |  |             |         |   |  |   |        |   |  |   |         |  



|    |                         
|--- | ------------------------
|12. | STOCK-BASED COMPENSATION

Effective as of the beginning of the 2003 fiscal
year, the Company adopted the fair value recognition provisions
of FAS 123, as amended by FAS 148, for stock-based
employee compensation. Under the prospective method of adoption
selected by the Company, the recognition provisions of
FAS 123 apply to all new employee awards granted after
December 28, 2002. In connection with the going-private
merger transaction, all outstanding stock options were settled
or cancelled. No new stock options have been issued subsequent
to the going-private merger transaction.

16



---



##### Table of Contents



DOLE FOOD COMPANY, INC.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(Unaudited)


The following table illustrates the pro forma
effect on net income as if the fair value method had been
applied to all outstanding and unvested stock option awards in
each period (in thousands):

|           |             |               |   |              |  |               |   |                |  |             |   |        |  |  |   |        |  |  |   |        | 
|---------- | ----------- | ------------- | - | ------------ |  | ------------- | - | -------------- |  | ----------- | - | ------ |  |  | - | ------ |  |  | - | ------ | 
|           |             |               |   | Two Quarters |  |               |   | Three Quarters
|           |             | Quarter Ended |   | Ended        |  | Quarter Ended |   | Ended         
|           |             |               |   |             
|           |             |               |   |             
|           |             | October 4,    |   | October 5,   |  | October 4,    |   | March 22,      |  | October 5, 
|           |             | 2003          |   | 2002         |  | 2003          |   | 2003           |  | 2002       
|           |             |               |   |              |  |               |   |                |  |            
|           |             | Successor     |   | Predecessor  |  | Successor     |   | Predecessor    |  | Predecessor
|           |             |               |   |              |  |               |   |                |  |            
|Net income |             |               |   |              |  |               |   |                |  |             |   |        |  |  |   |        |  |  |   |       
|           | As reported |               | $ | 7,530        |  |               | $ | 14,650         |  |             | $ | 25,431 |  |  | $ | 60,788 |  |  | $ | 17,860 | 
|           | Pro forma   |               | $ | 7,530        |  |               | $ | 13,848         |  |             | $ | 25,431 |  |  | $ | 60,408 |  |  | $ | 15,924 | 



|    |                    
|--- | -------------------
|13. | SEGMENT INFORMATION

The Company has four primary reportable operating
segments: fresh fruit, fresh vegetables, packaged foods and
fresh-cut flowers. These reportable segments are managed
separately due to differences in their products, production
processes, distribution channels and customer bases.

Management evaluates and monitors segment
performance primarily through earnings before interest expense
and income taxes (EBIT). EBIT is calculated by
adding income taxes and interest expense to net income.
Management believes that segment EBIT provides useful
information for analyzing the underlying business results as
well as allowing investors a means to evaluate the financial
results of each segment in relation to the Company as a whole.
EBIT is not defined under accounting principles generally
accepted in the United States (GAAP) and should not
be considered in isolation or as a substitute for net income or
cash flow measures prepared in accordance with GAAP or as a
measure of the Companys profitability or liquidity.
Additionally, the Companys computation of EBIT may not be
comparable to other similarly titled measures computed by other
companies, because not all companies calculate EBIT in the same
fashion.

17



---



##### Table of Contents



DOLE FOOD COMPANY, INC.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(Unaudited)


Revenues from external customers and EBIT for the
reportable operating segments and corporate and other were as
follows (in thousands):

|                                  |                          |               |           |             |   |   |           |         |  
|--------------------------------- | ------------------------ | ------------- | --------- | ----------- | - | - | --------- | ------- | -
|                                  |                          |              
|                                  |                          | Quarter Ended
|                                  |                          |              
|                                  |                          | October 4,    |           | October 5, 
|                                  |                          | 2003          |           | 2002       
|                                  |                          |               |           |            
|                                  |                          | Successor     |           | Predecessor
|                                  |                          |               |           |            
|Revenues from external customers: |                          |               |           |             |   |   |           |        
|                                  | Fresh fruit              |               | $         | 874,682     |   |   | $         | 782,241 |  
|                                  | Fresh vegetables         |               |           | 257,151     |   |   |           | 232,121 |  
|                                  | Packaged foods           |               |           | 175,567     |   |   |           | 186,127 |  
|                                  | Fresh-cut flowers        |               |           | 40,763      |   |   |           | 41,879  |  
|                                  | Other operating segments |               |           | 9,698       |   |   |           | 12,126  |  
|                                  |                          |               |           |             |   |   |           |        
|                                  |                          | $             | 1,357,861 |             |   | $ | 1,254,494 |        
|                                  |                          |               |           |             |   |   |           |        
|EBIT:                             |                          |               |           |             |   |   |           |        
|                                  | Fresh fruit              |               | $         | 52,937      |   |   | $         | 43,677  |  
|                                  | Fresh vegetables         |               |           | 24,724      |   |   |           | 18,400  |  
|                                  | Packaged foods           |               |           | 7,090       |   |   |           | 19,198  |  
|                                  | Fresh-cut flowers        |               |           | (3,546      | ) |   |           | (7,044  | )
|                                  | Other operating segments |               |           | 275         |   |   |           | 97      |  
|                                  |                          |               |           |             |   |   |           |        
|                                  | Total operating segments |               |           | 81,480      |   |   |           | 74,328  |  
|                                  | Corporate and other      |               |           | (23,418     | ) |   |           | (27,177 | )
|Interest expense                  |                          |               | 48,993    |             |   |   | 26,802    |        
|                                  |                          |               |           |             |   |   |           |        
|Income before income taxes        |                          | $             | 9,069     |             |   | $ | 20,349    |        
|                                  |                          |               |           |             |   |   |           |        

18



---



##### Table of Contents



DOLE FOOD COMPANY, INC.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(Unaudited)


|                                                                                         |                          |              |           |               |   |                |           |         |   |   |           |           |  
|---------------------------------------------------------------------------------------- | ------------------------ | ------------ | --------- | ------------- | - | -------------- | --------- | ------- | - | - | --------- | --------- | -
|                                                                                         |                          | Two Quarters |           |               |   | Three Quarters
|                                                                                         |                          | Ended        |           | Quarter Ended |   | Ended         
|                                                                                         |                          | October 4,   |           | March 22,     |   | October 5,    
|                                                                                         |                          | 2003         |           | 2003          |   | 2002          
|                                                                                         |                          |              |           |               |   |               
|                                                                                         |                          | Successor    |           | Predecessor   |   | Predecessor   
|(In thousands)                                                                           |                          |              |           |               |   |               
|Revenues from external customers:                                                        |                          |              |           |               |   |                |           |         |   |   |           |          
|                                                                                         | Fresh fruit              |              | $         | 1,705,415     |   |                | $         | 725,115 |   |   | $         | 2,171,246 |  
|                                                                                         | Fresh vegetables         |              |           | 457,124       |   |                |           | 176,865 |   |   |           | 652,788   |  
|                                                                                         | Packaged foods           |              |           | 310,049       |   |                |           | 116,712 |   |   |           | 444,062   |  
|                                                                                         | Fresh-cut flowers        |              |           | 84,964        |   |                |           | 48,506  |   |   |           | 140,531   |  
|                                                                                         | Other operating segments |              |           | 17,131        |   |                |           | 5,972   |   |   |           | 23,467    |  
|                                                                                         |                          |              |           |               |   |                |           |         |   |   |           |          
|                                                                                         |                          | $            | 2,574,683 |               |   | $              | 1,073,170 |         |   | $ | 3,432,094 |          
|                                                                                         |                          |              |           |               |   |                |           |         |   |   |           |          
|EBIT:                                                                                    |                          |              |           |               |   |                |           |         |   |   |           |          
|                                                                                         | Fresh fruit              |              | $         | 133,891       |   |                | $         | 70,174  |   |   | $         | 189,340   |  
|                                                                                         | Fresh vegetables         |              |           | 43,085        |   |                |           | 16,703  |   |   |           | 75,412    |  
|                                                                                         | Packaged foods           |              |           | 1,272         |   |                |           | 11,693  |   |   |           | 44,665    |  
|                                                                                         | Fresh-cut flowers        |              |           | (4,656        | ) |                |           | 6,394   |   |   |           | (5,820    | )
|                                                                                         | Other operating segments |              |           | 31            |   |                |           | 65      |   |   |           | 345       |  
|                                                                                         |                          |              |           |               |   |                |           |         |   |   |           |          
|                                                                                         | Total operating segments |              |           | 173,623       |   |                |           | 105,029 |   |   |           | 303,942   |  
|                                                                                         | Corporate and other      |              |           | (56,057       | ) |                |           | (11,494 | ) |   |           | (51,785   | )
|Interest expense                                                                         |                          |              | 86,772    |               |   |                | 19,647    |         |   |   | 60,799    |          
|                                                                                         |                          |              |           |               |   |                |           |         |   |   |           |          
|Income before income taxes and cumulative effect
    of a change in accounting principle |                          | $            | 30,794    |               |   | $              | 73,888    |         |   | $ | 191,358   |          
|                                                                                         |                          |              |           |               |   |                |           |         |   |   |           |          

Total assets for the reportable operating
segments and corporate and other were as follows (in thousands):

|                         |  |            |           |              |  |   |           | 
|------------------------ |  | ---------- | --------- | ------------ |  | - | --------- | 
|                         |  | October 4, |           | December 28,
|                         |  | 2003       |           | 2002        
|                         |  |            |           |             
|                         |  | Successor  |           | Predecessor 
|                         |  |            |           |             
|Fresh fruit              |  | $          | 2,054,752 |              |  | $ | 1,509,424 | 
|Fresh vegetables         |  |            | 370,446   |              |  |   | 274,867   | 
|Packaged foods           |  |            | 388,353   |              |  |   | 347,395   | 
|Fresh-cut flowers        |  |            | 141,186   |              |  |   | 155,863   | 
|Other operating segments |  |            | 9,681     |              |  |   | 10,575    | 
|                         |  |            |           |              |  |   |           | 
|Total operating segments |  |            | 2,964,418 |              |  |   | 2,298,124 | 
|Corporate and other      |  |            | 927,900   |              |  |   | 738,728   | 
|                         |  |            |           |              |  |   |           | 
|                         |  | $          | 3,892,318 |              |  | $ | 3,036,852 | 
|                         |  |            |           |              |  |   |           | 

19



---



##### Table of Contents



DOLE FOOD COMPANY, INC.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(Unaudited)


Goodwill arising from the going-private merger
transaction has been allocated to the Companys operating
segments as follows (in thousands). The allocation is still
preliminary at this time.

|                         |  |   |         | 
|------------------------ |  | - | ------- | 
|Fresh fruit              |  | $ | 357,706 | 
|Fresh vegetables         |  |   | 93,455  | 
|Packaged foods           |  |   | 19,091  | 
|Fresh-cut flowers        |  |   |        | 
|Other operating segments |  |   |        | 
|                         |  |   |         | 
|                         |  | $ | 470,252 | 
|                         |  |   |         | 



|    |              
|--- | -------------
|14. | CONTINGENCIES

The Company is involved from time to time in
claims and legal actions incidental to its operations, both as
plaintiff and defendant. The Company has established what
management currently believes to be adequate reserves for
pending legal matters. These reserves are established as part of
an ongoing worldwide assessment of claims and legal actions that
takes into consideration such items as changes in the pending
case load (including resolved and new matters), opinions of
legal counsel, individual developments in court proceedings,
changes in the law, changes in business focus, changes in the
litigation environment, changes in opponent strategy and
tactics, new developments as a result of ongoing discovery, and
past experience in defending and settling similar claims. In the
opinion of management, after consultation with outside counsel,
the claims or actions to which the Company is a party are not
expected to have a material adverse effect, individually or in
the aggregate, on the Companys financial condition or
results of operations.

A significant portion of the Companys legal
exposure relates to lawsuits pending in the United States and in
several foreign countries, alleging injury as a result of
exposure to the agricultural chemical DBCP
(1,2-dibromo-3-chloropropane). DBCP was manufactured by several
chemical companies including Dow and Shell and registered by the
U.S. government for use on food crops. The Company and
other growers applied DBCP on banana farms in Latin America and
the Philippines and on pineapple farms in Hawaii. Specific
periods of use varied among the different locations. The Company
halted all purchases of DBCP, including for use in foreign
countries, when the U.S. EPA cancelled the registration of
DBCP for use in the United States in 1979. That cancellation was
based in part on the apparent link between male sterility and
exposure to DBCP among factory workers producing the product in
1977, as well as early product testing done by the manufacturers
showing testicular effects on animals exposed to DBCP. To date,
there is no reliable evidence demonstrating that field
application of DBCP led to sterility among farm workers,
although that claim is made in the pending lawsuits. Nor is
there any reliable scientific evidence that DBCP causes any
other injuries in humans, although plaintiffs in the various
actions assert claims based on cancer, birth defects and other
general illnesses.

Currently there are 799 lawsuits, in various
stages of proceedings, alleging injury as a result of exposure
to DBCP. Eleven of these lawsuits are currently pending in
various jurisdictions in the United States, with the remainder
pending in Latin America and the Philippines. In the United
States, plaintiffs recently moved to re-open and remand to state
court two previously dismissed cases pursuant to the United
States Supreme Courts decision in Dole Food Company,
Inc. v. Patrickson. Plaintiffs have also remanded five
other cases to state courts in Texas and Louisiana as a result
of the Patrickson decision. Claimed damages total approximately
$21.2 billion, with the lawsuits in Nicaragua representing
approximately 81% of this amount. In almost all of these cases,
the Company is a joint defendant with the major DBCP
manufacturers and, typically, other banana growers. To date,
none of these lawsuits has resulted in a verdict or judgment
against the Company. However, as described below, a judgment has
been rendered in a DBCP case in Nicaragua.

20



---



##### Table of Contents



DOLE FOOD COMPANY, INC.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(Unaudited)


In Nicaragua, the Company has been served in 46
of 313 pending cases, with the majority of the lawsuits
brought pursuant to Law 364, an October 2000 Nicaraguan
statute that contains substantive and procedural provisions that
Nicaraguas Attorney General formally opined are
unconstitutional. In October 2003, the Supreme Court of
Nicaragua issued an advisory opinion, not connected with any
litigation, that Law 364 is constitutional.

Fourteen of the 46 cases are being actively
litigated in civil trial courts in Managua and Chinendega. In
all of those actions, the Company has asked to have the cases
returned to the United States pursuant to a provision of Law
364. The Chinendega civil trial court has granted the
Companys request and ordered that the Company submit
unconditionally to the jurisdiction of the courts of the United
States for trial of the plaintiffs claims. Pursuant to the
courts order, Plaintiffs would have to file a new action
in the United States. Plaintiffs have sought reconsideration of
that order.

Nine of the 46 cases served were
consolidated into one case before a civil trial court in
Managua, with the plaintiffs naming an entity denominated as
Dole Food Corporation Inc. as a defendant. The
Company is aware of no legal entity bearing that name, and the
Company is certain that no such legal entity is related to the
Company. As a result, the Company responded in these nine
consolidated cases on behalf of Dole Fresh Fruit Company, a
subsidiary of the Company, which has been named as a defendant
in other pending DBCP matters, including matters brought by
Nicaraguan citizens. The Company paid a $100,000 non-refundable
deposit to the Nicaraguan court, as required under Law 364,
to participate in the litigation. On October 25, 2002, the
civil trial court in Managua issued a ruling that Dole Fresh
Fruit Company was not a party to the nine consolidated cases.
Thereafter, counsel for Dole Fresh Fruit Company notified the
court that no legal entity known as Dole Food Corporation
Inc. exists and sought to appear on behalf of Dole Food
Company, Inc. and to ratify all prior pleadings of Dole Fresh
Fruit Company. On November 25, 2002, the civil trial court
issued a ruling that Dole Food Company, Inc. is not a defendant
in the nine consolidated cases.

On December 13, 2002, the Nicaraguan civil
trial court entered a judgment in the aggregate amount of
$489.4 million on behalf of 468 plaintiffs against Dow
Chemical Company, also known as Dow AgroSciences, Shell Chemical
Company, Standard Fruit and Vegetable Company and Dole
Food Corporation Inc. in the nine consolidated actions.
Because the civil trial court had held that the Company is not a
defendant in the case, the court also ordered that the
Companys $100,000 deposit be returned. Standard Fruit and
Vegetable Company is a Texas corporation that is wholly
unrelated to the Company. On May 14, 2003, an action was
filed in Los Angeles County Superior Court against The Dow
Chemical Company, Shell Chemical Company, and Dole Food Company,
Inc. to enforce the Nicaraguan judgment. On July 18, 2003,
the Company filed a motion to dismiss the enforcement action on
the grounds that Dole Food Company, Inc. was not a party to the
judgment. On July 17, 2003, Dow and Shell filed a motion to
remove the enforcement action to the United States District
Court for the Central District of California. The Company
consented to that removal. On October 20, 2003, the United
States District Court for the Central District of California
dismissed with prejudice the enforcement action as to all of the
defendants, including Dole. The Court held that Dole Food
Company, Inc. was not a party in the Nicaraguan judgment.

The Company believes that the Nicaraguan civil
trial courts judgment will not be enforceable against any
Dole entity in the U.S. or in any other country, because no Dole
entity has been named in the judgment and Nicaraguas Law
364 is unconstitutional and violates international due process.
Among other things, Law 364 is an improper special
law directed at particular parties, it requires defendants
to pay large, non-refundable deposits in order to participate in
the litigation, it provides a severely truncated procedural
process, it establishes irrebutable presumptions of causation
that are contrary to the evidence and scientific data, and it
sets unreasonable minimum damages that must be awarded. In
addition, although the Company sought to participate in the
case, the Nicaraguan civil trial court ruled that the Company
would not be heard and that the Companys legal motions and
papers would not be considered. Finally, as previously noted,
the civil trial court ruled that neither Dole Food Company, Inc.
nor Dole Fresh Fruit Company is a defendant in the case.

21



---



##### Table of Contents



DOLE FOOD COMPANY, INC.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(Unaudited)


For these reasons, the Company does not believe a
U.S. court or that of any other nation would enforce this
judgment.

As to all the DBCP matters, the Company has
denied liability and asserted substantial defenses. Although no
assurance can be given concerning the outcome of these cases, in
the opinion of management, after consultation with legal counsel
and based on past experience defending and settling DBCP claims,
the pending lawsuits are not expected to have a material adverse
effect on the Companys financial condition or results of
operations.



|    |                                
|--- | -------------------------------
|15. | GUARANTOR FINANCIAL INFORMATION

In connection with the issuance of the 2011 Notes
in March 2003 and the 2010 Notes in May 2003, the Company and
all of its wholly-owned domestic subsidiaries
(Guarantors) have fully and unconditionally
guaranteed, on a joint and several basis, the Companys
obligations under the related indentures (the
Guarantees). Each Guarantee is subordinated in right
of payment to the Guarantors existing and future senior
debt, including obligations under the senior secured credit
facility, and will rank pari passu with all senior subordinated
indebtedness of the applicable Guarantor. All Guarantors are
100% owned by the Company.

The accompanying guarantor condensed
consolidating financial information is presented on the equity
method of accounting for all periods presented. Under this
method, investments in subsidiaries are recorded at cost and
adjusted for the Companys share in the subsidiaries
cumulative results of operations, capital contributions and
distributions and other changes in equity. Elimination entries
relate primarily to the elimination of investments in
subsidiaries and associated intercompany balances and
transactions.

The following are condensed consolidating
statements of operations of the Company for the quarter and two
quarters ended October 4, 2003, the quarter ended
March 22, 2003, and quarter and three quarters ended
October 5, 2002; condensed consolidating balance sheets as
of October 4, 2003 and December 28, 2002; and
condensed consolidating statements of cash flows for the two
quarters ended October 4, 2003, quarter ended
March 22, 2003 and three quarters ended October 5,
2002.

22



---



##### Table of Contents



DOLE FOOD COMPANY, INC.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(Unaudited)


UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF
OPERATIONS

SUCCESSOR

For the Quarter Ended October 4,
2003


(In thousands)


|                                                               |                            |               |         |            |   |                |         |              |  |       |         |         |  |   |          |         |   |   |           |         | 
|-------------------------------------------------------------- | -------------------------- | ------------- | ------- | ---------- | - | -------------- | ------- | ------------ |  | ----- | ------- | ------- |  | - | -------- | ------- | - | - | --------- | ------- | 
|                                                               |                            | Dole Food     |         |            |   |                |         |              |  |      
|                                                               |                            | Company, Inc. |         | Guarantors |   | Non Guarantors |         | Eliminations |  | Total
|                                                               |                            |               |         |            |   |                |         |              |  |      
|Revenues, net                                                  |                            | $             | 138,478 |            |   | $              | 523,186 |              |  | $     | 986,513 |         |  | $ | (290,316 | )       |   | $ | 1,357,861 |        
|Cost of products sold                                          |                            |               | 120,898 |            |   |                | 466,269 |              |  |       | 879,448 |         |  |   | (290,316 | )       |   |   | 1,176,299 |        
|                                                               |                            |               |         |            |   |                |         |              |  |       |         |         |  |   |          |         |   |   |           |        
|                                                               | Gross margin               |               |         | 17,580     |   |                |         | 56,917       |  |       |         | 107,065 |  |   |          |        |   |   |           | 181,562 | 
|Selling, marketing and general and administrative
    expenses |                            |               | 38,422  |            |   |                | 30,573  |              |  |       | 56,669  |         |  |   |         |         |   |   | 125,664   |        
|                                                               |                            |               |         |            |   |                |         |              |  |       |         |         |  |   |          |         |   |   |           |        
|                                                               | Operating income (loss)    |               |         | (20,842    | ) |                |         | 26,344       |  |       |         | 50,396  |  |   |          |        |   |   |           | 55,898  | 
|Equity in subsidiary income                                    |                            |               | 66,614  |            |   |                | 3,617   |              |  |       |        |         |  |   | (70,231  | )       |   |   |          |        
|Other income (expense), net                                    |                            |               | (611    | )          |   |                | 704     |              |  |       | 316     |         |  |   |         |         |   |   | 409       |        
|Interest income                                                |                            |               | 58      |            |   |                | 38      |              |  |       | 1,659   |         |  |   |         |         |   |   | 1,755     |        
|Interest expense                                               |                            |               | 42,101  |            |   |                | 489     |              |  |       | 6,403   |         |  |   |         |         |   |   | 48,993    |        
|                                                               |                            |               |         |            |   |                |         |              |  |       |         |         |  |   |          |         |   |   |           |        
|                                                               | Income before income taxes |               |         | 3,118      |   |                |         | 30,214       |  |       |         | 45,968  |  |   |          | (70,231 | ) |   |           | 9,069   | 
|Income taxes                                                   |                            |               | (4,412  | )          |   |                | 7,973   |              |  |       | (2,022  | )       |  |   |         |         |   |   | 1,539     |        
|                                                               |                            |               |         |            |   |                |         |              |  |       |         |         |  |   |          |         |   |   |           |        
|                                                               | Net income                 |               | $       | 7,530      |   |                | $       | 22,241       |  |       | $       | 47,990  |  |   | $        | (70,231 | ) |   | $         | 7,530   | 
|                                                               |                            |               |         |            |   |                |         |              |  |       |         |         |  |   |          |         |   |   |           |        

PREDECESSOR

For the Quarter Ended October 5,
2002


(In thousands)


|                                                               |                            |               |         |            |   |                |         |              |  |       |           |        |  |   |          |         |   |   |           |         | 
|-------------------------------------------------------------- | -------------------------- | ------------- | ------- | ---------- | - | -------------- | ------- | ------------ |  | ----- | --------- | ------ |  | - | -------- | ------- | - | - | --------- | ------- | 
|                                                               |                            | Dole Food     |         |            |   |                |         |              |  |      
|                                                               |                            | Company, Inc. |         | Guarantors |   | Non Guarantors |         | Eliminations |  | Total
|                                                               |                            |               |         |            |   |                |         |              |  |      
|Revenues, net                                                  |                            | $             | 131,762 |            |   | $              | 499,040 |              |  | $     | 1,010,193 |        |  | $ | (386,501 | )       |   | $ | 1,254,494 |        
|Cost of products sold                                          |                            |               | 85,675  |            |   |                | 446,199 |              |  |       | 929,997   |        |  |   | (386,501 | )       |   |   | 1,075,370 |        
|                                                               |                            |               |         |            |   |                |         |              |  |       |           |        |  |   |          |         |   |   |           |        
|                                                               | Gross margin               |               |         | 46,087     |   |                |         | 52,841       |  |       |           | 80,196 |  |   |          |        |   |   |           | 179,124 | 
|Selling, marketing and general and administrative
    expenses |                            |               | 50,650  |            |   |                | 37,475  |              |  |       | 51,958    |        |  |   |         |         |   |   | 140,083   |        
|                                                               |                            |               |         |            |   |                |         |              |  |       |           |        |  |   |          |         |   |   |           |        
|                                                               | Operating income (loss)    |               |         | (4,563     | ) |                |         | 15,366       |  |       |           | 28,238 |  |   |          |        |   |   |           | 39,041  | 
|Equity in subsidiary income                                    |                            |               | 36,705  |            |   |                | 890     |              |  |       |          |        |  |   | (37,595  | )       |   |   |          |        
|Other income (expense), net                                    |                            |               | 127     |            |   |                | 2,008   |              |  |       | 1,979     |        |  |   |         |         |   |   | 4,114     |        
|Interest income                                                |                            |               | 1,837   |            |   |                | 125     |              |  |       | 2,034     |        |  |   |         |         |   |   | 3,996     |        
|Interest expense                                               |                            |               | 24,538  |            |   |                | 59      |              |  |       | 2,205     |        |  |   |         |         |   |   | 26,802    |        
|                                                               |                            |               |         |            |   |                |         |              |  |       |           |        |  |   |          |         |   |   |           |        
|                                                               | Income before income taxes |               |         | 9,568      |   |                |         | 18,330       |  |       |           | 30,046 |  |   |          | (37,595 | ) |   |           | 20,349  | 
|Income taxes                                                   |                            |               | (5,082  | )          |   |                | 6,135   |              |  |       | 4,646     |        |  |   |         |         |   |   | 5,699     |        
|                                                               |                            |               |         |            |   |                |         |              |  |       |           |        |  |   |          |         |   |   |           |        
|                                                               | Net income                 |               | $       | 14,650     |   |                | $       | 12,195       |  |       | $         | 25,400 |  |   | $        | (37,595 | ) |   | $         | 14,650  | 
|                                                               |                            |               |         |            |   |                |         |              |  |       |           |        |  |   |          |         |   |   |           |        

23



---



##### Table of Contents



DOLE FOOD COMPANY, INC.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(Unaudited)


UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF
OPERATIONS  (Continued)

SUCCESSOR

For the Two Quarters Ended October 4,
2003


(In thousands)


|                                                               |                            |               |         |            |   |                |         |              |  |       |           |         |  |   |          |          |   |   |           |         | 
|-------------------------------------------------------------- | -------------------------- | ------------- | ------- | ---------- | - | -------------- | ------- | ------------ |  | ----- | --------- | ------- |  | - | -------- | -------- | - | - | --------- | ------- | 
|                                                               |                            | Dole Food     |         |            |   |                |         |              |  |      
|                                                               |                            | Company, Inc. |         | Guarantors |   | Non Guarantors |         | Eliminations |  | Total
|                                                               |                            |               |         |            |   |                |         |              |  |      
|Revenues, net                                                  |                            | $             | 247,868 |            |   | $              | 979,499 |              |  | $     | 1,911,603 |         |  | $ | (564,287 | )        |   | $ | 2,574,683 |        
|Cost of products sold                                          |                            |               | 216,213 |            |   |                | 875,874 |              |  |       | 1,697,259 |         |  |   | (564,287 | )        |   |   | 2,225,059 |        
|                                                               |                            |               |         |            |   |                |         |              |  |       |           |         |  |   |          |          |   |   |           |        
|                                                               | Gross margin               |               |         | 31,655     |   |                |         | 103,625      |  |       |           | 214,344 |  |   |          |         |   |   |           | 349,624 | 
|Selling, marketing and general and administrative
    expenses |                            |               | 75,212  |            |   |                | 55,194  |              |  |       | 94,741    |         |  |   |         |          |   |   | 225,147   |        
|                                                               |                            |               |         |            |   |                |         |              |  |       |           |         |  |   |          |          |   |   |           |        
|                                                               | Operating income (loss)    |               |         | (43,557    | ) |                |         | 48,431       |  |       |           | 119,603 |  |   |          |         |   |   |           | 124,477 | 
|Equity in subsidiary income                                    |                            |               | 146,088 |            |   |                | 12,005  |              |  |       |          |         |  |   | (158,093 | )        |   |   |          |        
|Other income (expense), net                                    |                            |               | (4,017  | )          |   |                | 1,054   |              |  |       | (6,815    | )       |  |   |         |          |   |   | (9,778    | )      
|Interest income                                                |                            |               | 209     |            |   |                | 117     |              |  |       | 2,541     |         |  |   |         |          |   |   | 2,867     |        
|Interest expense                                               |                            |               | 72,011  |            |   |                | 568     |              |  |       | 14,193    |         |  |   |         |          |   |   | 86,772    |        
|                                                               |                            |               |         |            |   |                |         |              |  |       |           |         |  |   |          |          |   |   |           |        
|                                                               | Income before income taxes |               |         | 26,712     |   |                |         | 61,039       |  |       |           | 101,136 |  |   |          | (158,093 | ) |   |           | 30,794  | 
|Income taxes                                                   |                            |               | 1,281   |            |   |                | 14,085  |              |  |       | (10,003   | )       |  |   |         |          |   |   | 5,363     |        
|                                                               |                            |               |         |            |   |                |         |              |  |       |           |         |  |   |          |          |   |   |           |        
|                                                               | Net income                 |               | $       | 25,431     |   |                | $       | 46,954       |  |       | $         | 111,139 |  |   | $        | (158,093 | ) |   | $         | 25,431  | 
|                                                               |                            |               |         |            |   |                |         |              |  |       |           |         |  |   |          |          |   |   |           |        

PREDECESSOR

For the Quarter Ended March 22,
2003


(In thousands)


|                                                               |                            |               |        |            |   |                |         |              |  |       |         |        |  |   |          |         |   |   |           |         | 
|-------------------------------------------------------------- | -------------------------- | ------------- | ------ | ---------- | - | -------------- | ------- | ------------ |  | ----- | ------- | ------ |  | - | -------- | ------- | - | - | --------- | ------- | 
|                                                               |                            | Dole Food     |        |            |   |                |         |              |  |      
|                                                               |                            | Company, Inc. |        | Guarantors |   | Non Guarantors |         | Eliminations |  | Total
|                                                               |                            |               |        |            |   |                |         |              |  |      
|Revenues, net                                                  |                            | $             | 96,185 |            |   | $              | 432,831 |              |  | $     | 803,294 |        |  | $ | (259,140 | )       |   | $ | 1,073,170 |        
|Cost of products sold                                          |                            |               | 69,640 |            |   |                | 371,625 |              |  |       | 712,914 |        |  |   | (259,140 | )       |   |   | 895,039   |        
|                                                               |                            |               |        |            |   |                |         |              |  |       |         |        |  |   |          |         |   |   |           |        
|                                                               | Gross margin               |               |        | 26,545     |   |                |         | 61,206       |  |       |         | 90,380 |  |   |          |        |   |   |           | 178,131 | 
|Selling, marketing and general and administrative
    expenses |                            |               | 28,887 |            |   |                | 23,285  |              |  |       | 37,169  |        |  |   |         |         |   |   | 89,341    |        
|                                                               |                            |               |        |            |   |                |         |              |  |       |         |        |  |   |          |         |   |   |           |        
|                                                               | Operating income (loss)    |               |        | (2,342     | ) |                |         | 37,921       |  |       |         | 53,211 |  |   |          |        |   |   |           | 88,790  | 
|Equity in subsidiary income                                    |                            |               | 73,874 |            |   |                | 5,252   |              |  |       |        |        |  |   | (79,126  | )       |   |   |          |        
|Other income (expense), net                                    |                            |               | (165   | )          |   |                | 119     |              |  |       | 2,091   |        |  |   |         |         |   |   | 2,045     |        
|Interest income                                                |                            |               | 1,179  |            |   |                | 119     |              |  |       | 1,402   |        |  |   |         |         |   |   | 2,700     |        
|Interest expense                                               |                            |               | 17,831 |            |   |                | 28      |              |  |       | 1,788   |        |  |   |         |         |   |   | 19,647    |        
|                                                               |                            |               |        |            |   |                |         |              |  |       |         |        |  |   |          |         |   |   |           |        
|                                                               | Income before income taxes |               |        | 54,715     |   |                |         | 43,383       |  |       |         | 54,916 |  |   |          | (79,126 | ) |   |           | 73,888  | 
|Income taxes                                                   |                            |               | (6,073 | )          |   |                | 16,024  |              |  |       | 3,149   |        |  |   |         |         |   |   | 13,100    |        
|                                                               |                            |               |        |            |   |                |         |              |  |       |         |        |  |   |          |         |   |   |           |        
|                                                               | Net income                 |               | $      | 60,788     |   |                | $       | 27,359       |  |       | $       | 51,767 |  |   | $        | (79,126 | ) |   | $         | 60,788  | 
|                                                               |                            |               |        |            |   |                |         |              |  |       |         |        |  |   |          |         |   |   |           |        

24



---



##### Table of Contents



DOLE FOOD COMPANY, INC.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(Unaudited)


UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF
OPERATIONS  (Continued)

PREDECESSOR

For the Three Quarters Ended October 5,
2002


(In thousands)


|                                                                                         |                                                                         |               |         |            |   |                |           |              |  |       |           |         |  |   |          |         |   |   |           |         | 
|---------------------------------------------------------------------------------------- | ----------------------------------------------------------------------- | ------------- | ------- | ---------- | - | -------------- | --------- | ------------ |  | ----- | --------- | ------- |  | - | -------- | ------- | - | - | --------- | ------- | 
|                                                                                         |                                                                         | Dole Food     |         |            |   |                |           |              |  |      
|                                                                                         |                                                                         | Company, Inc. |         | Guarantors |   | Non Guarantors |           | Eliminations |  | Total
|                                                                                         |                                                                         |               |         |            |   |                |           |              |  |      
|Revenues, net                                                                            |                                                                         | $             | 320,516 |            |   | $              | 1,405,489 |              |  | $     | 2,483,609 |         |  | $ | (777,520 | )       |   | $ | 3,432,094 |        
|Cost of products sold                                                                    |                                                                         |               | 227,888 |            |   |                | 1,232,722 |              |  |       | 2,196,644 |         |  |   | (777,520 | )       |   |   | 2,879,734 |        
|                                                                                         |                                                                         |               |         |            |   |                |           |              |  |       |           |         |  |   |          |         |   |   |           |        
|                                                                                         | Gross margin                                                            |               |         | 92,628     |   |                |           | 172,767      |  |       |           | 286,965 |  |   |          |        |   |   |           | 552,360 | 
|Selling, marketing and general and administrative
    expenses                           |                                                                         |               | 99,576  |            |   |                | 92,818    |              |  |       | 122,030   |         |  |   |         |         |   |   | 314,424   |        
|                                                                                         |                                                                         |               |         |            |   |                |           |              |  |       |           |         |  |   |          |         |   |   |           |        
|                                                                                         | Operating income (loss)                                                 |               |         | (6,948     | ) |                |           | 79,949       |  |       |           | 164,935 |  |   |          |        |   |   |           | 237,936 | 
|Equity in subsidiary income                                                              |                                                                         |               | 91,569  |            |   |                | 7,925     |              |  |       |          |         |  |   | (99,494  | )       |   |   |          |        
|Other income (expense), net                                                              |                                                                         |               | (2,509  | )          |   |                | 2,114     |              |  |       | 6,020     |         |  |   |         |         |   |   | 5,625     |        
|Interest income                                                                          |                                                                         |               | 3,554   |            |   |                | 411       |              |  |       | 4,631     |         |  |   |         |         |   |   | 8,596     |        
|Interest expense                                                                         |                                                                         |               | 54,360  |            |   |                | 142       |              |  |       | 6,297     |         |  |   |         |         |   |   | 60,799    |        
|                                                                                         |                                                                         |               |         |            |   |                |           |              |  |       |           |         |  |   |          |         |   |   |           |        
|Income before income taxes and cumulative effect
    of a change in accounting principle |                                                                         |               | 31,306  |            |   |                | 90,257    |              |  |       | 169,289   |         |  |   | (99,494  | )       |   |   | 191,358   |        
|Income taxes                                                                             |                                                                         |               | 13,446  |            |   |                | 31,005    |              |  |       | 9,130     |         |  |   |         |         |   |   | 53,581    |        
|                                                                                         |                                                                         |               |         |            |   |                |           |              |  |       |           |         |  |   |          |         |   |   |           |        
|                                                                                         | Income before cumulative effect of a change in
    accounting principle |               |         | 17,860     |   |                |           | 59,252       |  |       |           | 160,159 |  |   |          | (99,494 | ) |   |           | 137,777 | 
|Cumulative effect of a change in accounting
    principle                                |                                                                         |               |        |            |   |                | (7,260    | )            |  |       | (112,657  | )       |  |   |         |         |   |   | (119,917  | )      
|                                                                                         |                                                                         |               |         |            |   |                |           |              |  |       |           |         |  |   |          |         |   |   |           |        
|                                                                                         | Net income                                                              |               | $       | 17,860     |   |                | $         | 51,992       |  |       | $         | 47,502  |  |   | $        | (99,494 | ) |   | $         | 17,860  | 
|                                                                                         |                                                                         |               |         |            |   |                |           |              |  |       |           |         |  |   |          |         |   |   |           |        

25



---



##### Table of Contents



DOLE FOOD COMPANY, INC.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(Unaudited)


UNAUDITED CONDENSED CONSOLIDATING BALANCE
SHEET

SUCCESSOR

As of October 4, 2003


|                                         |                                                |                           |   |            |         |                |   |              |         |       |   |           |         |  |   |            |        |   |   |           |           | 
|---------------------------------------- | ---------------------------------------------- | ------------------------- | - | ---------- | ------- | -------------- | - | ------------ | ------- | ----- | - | --------- | ------- |  | - | ---------- | ------ | - | - | --------- | --------- | 
|                                         |                                                | Dole Food                 |   |            |         |                |   |              |         |      
|                                         |                                                | Company, Inc.             |   | Guarantors |         | Non Guarantors |   | Eliminations |         | Total
|                                         |                                                |                           |   |            |         |                |   |              |         |      
|(In thousands)                           |                                                |                           |   |            |         |                |   |              |         |       |   |           |         |  |   |            |        |   |   |          
|ASSETS                                   |                                                |                           |   |            |         |                |   |              |         |       |   |           |         |  |   |            |        |   |   |          
|Current Assets                           |                                                |                           |   |            |         |                |   |              |         |       |   |           |         |  |   |            |        |   |   |          
|                                         | Cash and cash equivalents                      |                           | $ | 8,325      |         |                | $ | (12,816      | )       |       | $ | 71,557    |         |  | $ |           |        |   | $ | 67,066    |          
|                                         | Receivables, net of allowances                 |                           |   | 115,063    |         |                |   | 78,435       |         |       |   | 341,996   |         |  |   | (2,401     | )      |   |   | 533,093   |          
|                                         | Inventories                                    |                           |   | 79,325     |         |                |   | 61,758       |         |       |   | 256,524   |         |  |   |           |        |   |   | 397,607   |          
|                                         | Prepaid expenses                               |                           |   | 8,021      |         |                |   | 9,081        |         |       |   | 32,020    |         |  |   |           |        |   |   | 49,122    |          
|                                         | Deferred income tax assets                     |                           |   | 28,583     |         |                |   | 19,546       |         |       |   |          |         |  |   |           |        |   |   | 48,129    |          
|                                         |                                                |                           |   |            |         |                |   |              |         |       |   |           |         |  |   |            |        |   |   |          
|                                         |                                                | Total current assets      |   |            | 239,317 |                |   |              | 156,004 |       |   |           | 702,097 |  |   |            | (2,401 | ) |   |           | 1,095,017 | 
|                                         | Investments                                    |                           |   | 1,944,515  |         |                |   | 291,765      |         |       |   | 78,125    |         |  |   | (2,231,912 | )      |   |   | 82,493    |          
|                                         | Property, plant and equipment, net             |                           |   | 296,247    |         |                |   | 256,220      |         |       |   | 813,615   |         |  |   |           |        |   |   | 1,366,082 |          
|                                         | Goodwill and intangible assets, net            |                           |   | 735,529    |         |                |   | 98,358       |         |       |   | 374,374   |         |  |   |           |        |   |   | 1,208,261 |          
|                                         | Other assets, net                              |                           |   | 54,960     |         |                |   | 8,151        |         |       |   | 77,354    |         |  |   |           |        |   |   | 140,465   |          
|                                         |                                                |                           |   |            |         |                |   |              |         |       |   |           |         |  |   |            |        |   |   |          
|                                         | Total assets                                   |                           | $ | 3,270,568  |         |                | $ | 810,498      |         |       | $ | 2,045,565 |         |  | $ | (2,234,313 | )      |   | $ | 3,892,318 |          
|                                         |                                                |                           |   |            |         |                |   |              |         |       |   |           |         |  |   |            |        |   |   |          
|LIABILITIES AND SHAREHOLDERS
    EQUITY
|Current Liabilities                      |                                                |                           |   |            |         |                |   |              |         |       |   |           |         |  |   |            |        |   |   |          
|                                         | Accounts payable and accrued liabilities       |                           | $ | 118,921    |         |                | $ | 236,236      |         |       | $ | 372,166   |         |  | $ | (2,401     | )      |   | $ | 724,922   |          
|                                         | Current portion of long-term debt              |                           |   | 8,440      |         |                |   |             |         |       |   | 16,408    |         |  |   |           |        |   |   | 24,848    |          
|                                         | Notes payable                                  |                           |   |           |         |                |   | 746          |         |       |   | 2,973     |         |  |   |           |        |   |   | 3,719     |          
|                                         |                                                |                           |   |            |         |                |   |              |         |       |   |           |         |  |   |            |        |   |   |          
|                                         |                                                | Total current liabilities |   |            | 127,361 |                |   |              | 236,982 |       |   |           | 391,547 |  |   |            | (2,401 | ) |   |           | 753,489   | 
|                                         | Intercompany payables (receivables)            |                           |   | 440,970    |         |                |   | 90,437       |         |       |   | (531,407  | )       |  |   |           |        |   |   |          |          
|                                         | Long-term debt                                 |                           |   | 1,539,785  |         |                |   | 2,081        |         |       |   | 209,823   |         |  |   |           |        |   |   | 1,751,689 |          
|                                         | Deferred income tax liabilities                |                           |   | 387,262    |         |                |   | 43,003       |         |       |   | 32,567    |         |  |   |           |        |   |   | 462,832   |          
|                                         | Other long-term liabilities                    |                           |   | 334,255    |         |                |   | 39,263       |         |       |   | 82,235    |         |  |   |           |        |   |   | 455,753   |          
|                                         | Minority interests                             |                           |   |           |         |                |   | 5,175        |         |       |   | 22,445    |         |  |   |           |        |   |   | 27,620    |          
|                                         | Total shareholders equity                     |                           |   | 440,935    |         |                |   | 393,557      |         |       |   | 1,838,355 |         |  |   | (2,231,912 | )      |   |   | 440,935   |          
|                                         |                                                |                           |   |            |         |                |   |              |         |       |   |           |         |  |   |            |        |   |   |          
|                                         | Total liabilities and shareholders
    equity |                           | $ | 3,270,568  |         |                | $ | 810,498      |         |       | $ | 2,045,565 |         |  | $ | (2,234,313 | )      |   | $ | 3,892,318 |          
|                                         |                                                |                           |   |            |         |                |   |              |         |       |   |           |         |  |   |            |        |   |   |          

26



---



##### Table of Contents



DOLE FOOD COMPANY, INC.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(Unaudited)


CONDENSED CONSOLIDATING BALANCE
SHEET  (Continued)

PREDECESSOR

As of December 28, 2002


|                                         |                                          |                                                |   |            |           |                |   |              |           |       |   |           |           |  |   |            |            |   |   |           |           | 
|---------------------------------------- | ---------------------------------------- | ---------------------------------------------- | - | ---------- | --------- | -------------- | - | ------------ | --------- | ----- | - | --------- | --------- |  | - | ---------- | ---------- | - | - | --------- | --------- | 
|                                         |                                          | Dole Food                                      |   |            |           |                |   |              |           |      
|                                         |                                          | Company, Inc.                                  |   | Guarantors |           | Non Guarantors |   | Eliminations |           | Total
|                                         |                                          |                                                |   |            |           |                |   |              |           |      
|(In thousands)                           |                                          |                                                |   |            |           |                |   |              |           |       |   |           |           |  |   |            |            |   |   |          
|ASSETS                                   |                                          |                                                |   |            |           |                |   |              |           |       |   |           |           |  |   |            |            |   |   |          
|Current Assets                           |                                          |                                                |   |            |           |                |   |              |           |       |   |           |           |  |   |            |            |   |   |          
|                                         | Cash and cash equivalents                |                                                | $ | 395,106    |           |                | $ | (2,857       | )         |       | $ | 254,718   |           |  | $ |           |            |   | $ | 646,967   |          
|                                         | Receivables, net of allowances           |                                                |   | 97,088     |           |                |   | 135,985      |           |       |   | 330,260   |           |  |   | (57,906    | )          |   |   | 505,427   |          
|                                         | Inventories                              |                                                |   | 63,763     |           |                |   | 84,099       |           |       |   | 289,248   |           |  |   |           |            |   |   | 437,110   |          
|                                         | Prepaid expenses                         |                                                |   | 2,532      |           |                |   | 10,702       |           |       |   | 29,233    |           |  |   |           |            |   |   | 42,467    |          
|                                         | Deferred income tax assets               |                                                |   | 14,048     |           |                |   | 22,794       |           |       |   |          |           |  |   |           |            |   |   | 36,842    |          
|                                         |                                          |                                                |   |            |           |                |   |              |           |       |   |           |           |  |   |            |            |   |   |          
|                                         |                                          | Total current assets                           |   |            | 572,537   |                |   |              | 250,723   |       |   |           | 903,459   |  |   |            | (57,906    | ) |   |           | 1,668,813 | 
|                                         | Investments                              |                                                |   | 2,673,449  |           |                |   | 502,016      |           |       |   | 76,534    |           |  |   | (3,171,060 | )          |   |   | 80,939    |          
|                                         | Property, plant and equipment, net       |                                                |   | 48,617     |           |                |   | 274,836      |           |       |   | 703,112   |           |  |   |           |            |   |   | 1,026,565 |          
|                                         | Goodwill and intangible assets, net      |                                                |   | 28         |           |                |   | 1,127        |           |       |   | 130,925   |           |  |   |           |            |   |   | 132,080   |          
|                                         | Other assets, net                        |                                                |   | 57,868     |           |                |   | 2,183        |           |       |   | 66,014    |           |  |   | 2,390      |            |   |   | 128,455   |          
|                                         |                                          |                                                |   |            |           |                |   |              |           |       |   |           |           |  |   |            |            |   |   |          
|                                         | Total assets                             |                                                | $ | 3,352,499  |           |                | $ | 1,030,885    |           |       | $ | 1,880,044 |           |  | $ | (3,226,576 | )          |   | $ | 3,036,852 |          
|                                         |                                          |                                                |   |            |           |                |   |              |           |       |   |           |           |  |   |            |            |   |   |          
|LIABILITIES AND SHAREHOLDERS
    EQUITY
|Current Liabilities                      |                                          |                                                |   |            |           |                |   |              |           |       |   |           |           |  |   |            |            |   |   |          
|                                         | Accounts payable and accrued liabilities |                                                | $ | 100,272    |           |                | $ | 279,898      |           |       | $ | 369,755   |           |  | $ | (38,981    | )          |   | $ | 710,944   |          
|                                         | Current portion of long-term debt        |                                                |   | 209,252    |           |                |   |             |           |       |   | 21,561    |           |  |   |           |            |   |   | 230,813   |          
|                                         | Notes payable                            |                                                |   |           |           |                |   | 678          |           |       |   | 10,923    |           |  |   |           |            |   |   | 11,601    |          
|                                         |                                          |                                                |   |            |           |                |   |              |           |       |   |           |           |  |   |            |            |   |   |          
|                                         |                                          | Total current liabilities                      |   |            | 309,524   |                |   |              | 280,576   |       |   |           | 402,239   |  |   |            | (38,981    | ) |   |           | 953,358   | 
|                                         | Intercompany payables (receivables)      |                                                |   | 1,140,247  |           |                |   | (966,127     | )         |       |   | (174,120  | )         |  |   |           |            |   |   |          |          
|                                         | Long-term debt                           |                                                |   | 852,791    |           |                |   | 1,693        |           |       |   | 27,996    |           |  |   |           |            |   |   | 882,480   |          
|                                         | Deferred income tax liabilities          |                                                |   |           |           |                |   | 16,442       |           |       |   | 2,552     |           |  |   | (16,535    | )          |   |   | 2,459     |          
|                                         | Other long-term liabilities              |                                                |   | 304,826    |           |                |   | 44,506       |           |       |   | 74,822    |           |  |   |           |            |   |   | 424,154   |          
|                                         | Minority interests                       |                                                |   |           |           |                |   | 6,720        |           |       |   | 22,570    |           |  |   |           |            |   |   | 29,290    |          
|                                         | Total shareholders equity               |                                                |   | 745,111    |           |                |   | 1,647,075    |           |       |   | 1,523,985 |           |  |   | (3,171,060 | )          |   |   | 745,111   |          
|                                         |                                          |                                                |   |            |           |                |   |              |           |       |   |           |           |  |   |            |            |   |   |          
|                                         |                                          | Total liabilities and shareholders
    equity |   | $          | 3,352,499 |                |   | $            | 1,030,885 |       |   | $         | 1,880,044 |  |   | $          | (3,226,576 | ) |   | $         | 3,036,852 | 
|                                         |                                          |                                                |   |            |           |                |   |              |           |       |   |           |           |  |   |            |            |   |   |          

27



---



##### Table of Contents



DOLE FOOD COMPANY, INC.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(Unaudited)


UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF
CASH FLOWS

SUCCESSOR

For the Two Quarters Ended October 4,
2003


|                     |                                                                                                    |                                                          |   |            |            |                |   |              |         |       |   |          |         |   |   |   |   |  |   |            |            |  
|-------------------- | -------------------------------------------------------------------------------------------------- | -------------------------------------------------------- | - | ---------- | ---------- | -------------- | - | ------------ | ------- | ----- | - | -------- | ------- | - | - | - | - |  | - | ---------- | ---------- | -
|                     |                                                                                                    | Dole Food                                                |   |            |            |                |   |              |         |      
|                     |                                                                                                    | Company, Inc.                                            |   | Guarantors |            | Non Guarantors |   | Eliminations |         | Total
|                     |                                                                                                    |                                                          |   |            |            |                |   |              |         |      
|(In thousands)       |                                                                                                    |                                                          |   |            |            |                |   |              |         |       |   |          |         |   |   |   |   |  |   |           
|OPERATING ACTIVITIES |                                                                                                    |                                                          |   |            |            |                |   |              |         |       |   |          |         |   |   |   |   |  |   |           
|                     |                                                                                                    | Cash flow provided by (used in) operating
    activities |   | $          | 399,809    |                |   | $            | (11,364 | )     |   | $        | (88,245 | ) |   | $ |  |  |   | $          | 300,200    |  
|                     |                                                                                                    |                                                          |   |            |            |                |   |              |         |       |   |          |         |   |   |   |   |  |   |           
|INVESTING ACTIVITIES |                                                                                                    |                                                          |   |            |            |                |   |              |         |       |   |          |         |   |   |   |   |  |   |           
|                     | Proceeds from sales of assets                                                                      |                                                          |   | 42,925     |            |                |   | 3,075        |         |       |   | 3,128    |         |   |   |  |   |  |   | 49,128     |           
|                     | Net proceeds from sale of businesses and
    investments                                           |                                                          |   |           |            |                |   |             |         |       |   | 7,554    |         |   |   |  |   |  |   | 7,554      |           
|                     | Purchases of investments                                                                           |                                                          |   | (1,022     | )          |                |   |             |         |       |   |         |         |   |   |  |   |  |   | (1,022     | )         
|                     | Capital additions                                                                                  |                                                          |   | (1,583     | )          |                |   | (4,416       | )       |       |   | (56,669  | )       |   |   |  |   |  |   | (62,668    | )         
|                     | Repurchase of common stock and settlement of
    stock options in going-private merger transaction |                                                          |   | (1,470,184 | )          |                |   |             |         |       |   |         |         |   |   |  |   |  |   | (1,470,184 | )         
|                     | Transaction costs paid in going-private merger
    transaction                                     |                                                          |   | (66,494    | )          |                |   |             |         |       |   |         |         |   |   |  |   |  |   | (66,494    | )         
|                     |                                                                                                    |                                                          |   |            |            |                |   |              |         |       |   |          |         |   |   |   |   |  |   |           
|                     |                                                                                                    | Cash flow (used in) provided by investing
    activities |   |            | (1,496,358 | )              |   |              | (1,341  | )     |   |          | (45,987 | ) |   |   |  |  |   |            | (1,543,686 | )
|                     |                                                                                                    |                                                          |   |            |            |                |   |              |         |       |   |          |         |   |   |   |   |  |   |           
|FINANCING ACTIVITIES |                                                                                                    |                                                          |   |            |            |                |   |              |         |       |   |          |         |   |   |   |   |  |   |           
|                     | Short-term debt borrowings                                                                         |                                                          |   |           |            |                |   | 5,224        |         |       |   |         |         |   |   |  |   |  |   | 5,224      |           
|                     | Short-term debt repayments                                                                         |                                                          |   |           |            |                |   | (5,213       | )       |       |   | (9,324   | )       |   |   |  |   |  |   | (14,537    | )         
|                     | Long-term debt borrowings, net of debt issuance
    costs                                          |                                                          |   | 1,187,733  |            |                |   | 1,045        |         |       |   | 608,334  |         |   |   |  |   |  |   | 1,797,112  |           
|                     | Long-term debt repayments                                                                          |                                                          |   | (739,450   | )          |                |   | (530         | )       |       |   | (501,294 | )       |   |   |  |   |  |   | (1,241,274 | )         
|                     | Dividends paid to minority shareholders                                                            |                                                          |   |           |            |                |   |             |         |       |   | (5,331   | )       |   |   |  |   |  |   | (5,331     | )         
|                     | Capital contribution by DHM Holding Company, Inc.                                                  |                                                          |   | 125,000    |            |                |   |             |         |       |   |         |         |   |   |  |   |  |   | 125,000    |           
|                     |                                                                                                    |                                                          |   |            |            |                |   |              |         |       |   |          |         |   |   |   |   |  |   |           
|                     |                                                                                                    | Cash flow provided by (used in) financing
    activities |   |            | 573,283    |                |   |              | 526     |       |   |          | 92,385  |   |   |   |  |  |   |            | 666,194    |  
|                     |                                                                                                    |                                                          |   |            |            |                |   |              |         |       |   |          |         |   |   |   |   |  |   |           
|                     | Effect of foreign exchange rate changes on cash
    and cash equivalents                           |                                                          |   |           |            |                |   |             |         |       |   | 3,358    |         |   |   |  |   |  |   | 3,358      |           
|                     |                                                                                                    |                                                          |   |            |            |                |   |              |         |       |   |          |         |   |   |   |   |  |   |           
|                     | Decrease in cash and cash
    equivalents                                                          |                                                          |   | (523,266   | )          |                |   | (12,179      | )       |       |   | (38,489  | )       |   |   |  |   |  |   | (573,934   | )         
|                     | Cash and cash equivalents at beginning of period                                                   |                                                          |   | 531,591    |            |                |   | (637         | )       |       |   | 110,046  |         |   |   |  |   |  |   | 641,000    |           
|                     |                                                                                                    |                                                          |   |            |            |                |   |              |         |       |   |          |         |   |   |   |   |  |   |           
|                     | Cash and cash equivalents at end of
    period                                                     |                                                          | $ | 8,325      |            |                | $ | (12,816      | )       |       | $ | 71,557   |         |   | $ |  |   |  | $ | 67,066     |           
|                     |                                                                                                    |                                                          |   |            |            |                |   |              |         |       |   |          |         |   |   |   |   |  |   |           

28



---



##### Table of Contents



DOLE FOOD COMPANY, INC.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(Unaudited)


UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF
CASH FLOWS  (Continued)

PREDECESSOR

For the Quarter Ended March 22,
2003


|                     |                                                                          |                                                          |   |            |         |                |   |              |       |       |   |          |          |   |   |   |   |  |   |         |        |  
|-------------------- | ------------------------------------------------------------------------ | -------------------------------------------------------- | - | ---------- | ------- | -------------- | - | ------------ | ----- | ----- | - | -------- | -------- | - | - | - | - |  | - | ------- | ------ | -
|                     |                                                                          | Dole Food                                                |   |            |         |                |   |              |       |      
|                     |                                                                          | Company, Inc.                                            |   | Guarantors |         | Non Guarantors |   | Eliminations |       | Total
|                     |                                                                          |                                                          |   |            |         |                |   |              |       |      
|(In thousands)       |                                                                          |                                                          |   |            |         |                |   |              |       |       |   |          |          |   |   |   |   |  |   |        
|OPERATING ACTIVITIES |                                                                          |                                                          |   |            |         |                |   |              |       |       |   |          |          |   |   |   |   |  |   |        
|                     |                                                                          | Cash flow provided by (used in) operating
    activities |   | $          | 146,297 |                |   | $            | 2,259 |       |   | $        | (147,151 | ) |   | $ |  |  |   | $       | 1,405  |  
|                     |                                                                          |                                                          |   |            |         |                |   |              |       |       |   |          |          |   |   |   |   |  |   |        
|INVESTING ACTIVITIES |                                                                          |                                                          |   |            |         |                |   |              |       |       |   |          |          |   |   |   |   |  |   |        
|                     | Proceeds from sales of assets                                            |                                                          |   | 834        |         |                |   | 33           |       |       |   | 876      |          |   |   |  |   |  |   | 1,743   |       
|                     | Capital additions                                                        |                                                          |   | (621       | )       |                |   |             |       |       |   | (3,206   | )        |   |   |  |   |  |   | (3,827  | )     
|                     |                                                                          |                                                          |   |            |         |                |   |              |       |       |   |          |          |   |   |   |   |  |   |        
|                     |                                                                          | Cash flow provided by (used in) investing
    activities |   |            | 213     |                |   |              | 33    |       |   |          | (2,330   | ) |   |   |  |  |   |         | (2,084 | )
|                     |                                                                          |                                                          |   |            |         |                |   |              |       |       |   |          |          |   |   |   |   |  |   |        
|FINANCING ACTIVITIES |                                                                          |                                                          |   |            |         |                |   |              |       |       |   |          |          |   |   |   |   |  |   |        
|                     | Short-term debt borrowings                                               |                                                          |   |           |         |                |   | 1,786        |       |       |   | 6,150    |          |   |   |  |   |  |   | 7,936   |       
|                     | Short-term debt repayments                                               |                                                          |   | (4,353     | )       |                |   | (1,730       | )     |       |   | (751     | )        |   |   |  |   |  |   | (6,834  | )     
|                     | Long-term debt borrowings                                                |                                                          |   |           |         |                |   | 15           |       |       |   | 5,019    |          |   |   |  |   |  |   | 5,034   |       
|                     | Long-term debt repayments                                                |                                                          |   |           |         |                |   | (143         | )     |       |   | (6,634   | )        |   |   |  |   |  |   | (6,777  | )     
|                     | Proceeds from issuance of common stock                                   |                                                          |   | 2,768      |         |                |   |             |       |       |   |         |          |   |   |  |   |  |   | 2,768   |       
|                     | Dividends paid to common shareholders                                    |                                                          |   | (8,440     | )       |                |   |             |       |       |   |         |          |   |   |  |   |  |   | (8,440  | )     
|                     |                                                                          |                                                          |   |            |         |                |   |              |       |       |   |          |          |   |   |   |   |  |   |        
|                     |                                                                          | Cash flow (used in) provided by financing
    activities |   |            | (10,025 | )              |   |              | (72   | )     |   |          | 3,784    |   |   |   |  |  |   |         | (6,313 | )
|                     |                                                                          |                                                          |   |            |         |                |   |              |       |       |   |          |          |   |   |   |   |  |   |        
|                     | Effect of foreign exchange rate changes on cash
    and cash equivalents |                                                          |   |           |         |                |   |             |       |       |   | 1,025    |          |   |   |  |   |  |   | 1,025   |       
|                     |                                                                          |                                                          |   |            |         |                |   |              |       |       |   |          |          |   |   |   |   |  |   |        
|                     | Increase (decrease) in cash and cash
    equivalents                     |                                                          |   | 136,485    |         |                |   | 2,220        |       |       |   | (144,672 | )        |   |   |  |   |  |   | (5,967  | )     
|                     | Cash and cash equivalents at beginning of period                         |                                                          |   | 395,106    |         |                |   | (2,857       | )     |       |   | 254,718  |          |   |   |  |   |  |   | 646,967 |       
|                     |                                                                          |                                                          |   |            |         |                |   |              |       |       |   |          |          |   |   |   |   |  |   |        
|                     | Cash and cash equivalents at end of
    period                           |                                                          | $ | 531,591    |         |                | $ | (637         | )     |       | $ | 110,046  |          |   | $ |  |   |  | $ | 641,000 |       
|                     |                                                                          |                                                          |   |            |         |                |   |              |       |       |   |          |          |   |   |   |   |  |   |        

29



---



##### Table of Contents



DOLE FOOD COMPANY, INC.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(Unaudited)


UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF
CASH FLOWS  (Continued)

PREDECESSOR

For the Three Quarters Ended October 5,
2002


|                     |                                                                          |                                                          |   |            |         |                |   |              |       |       |   |          |          |   |   |   |   |  |   |          |          |  
|-------------------- | ------------------------------------------------------------------------ | -------------------------------------------------------- | - | ---------- | ------- | -------------- | - | ------------ | ----- | ----- | - | -------- | -------- | - | - | - | - |  | - | -------- | -------- | -
|                     |                                                                          | Dole Food                                                |   |            |         |                |   |              |       |      
|                     |                                                                          | Company, Inc.                                            |   | Guarantors |         | Non Guarantors |   | Eliminations |       | Total
|                     |                                                                          |                                                          |   |            |         |                |   |              |       |      
|(In thousands)       |                                                                          |                                                          |   |            |         |                |   |              |       |       |   |          |          |   |   |   |   |  |   |         
|OPERATING ACTIVITIES |                                                                          |                                                          |   |            |         |                |   |              |       |       |   |          |          |   |   |   |   |  |   |         
|                     |                                                                          | Cash flow provided by operating
    activities           |   | $          | 22,521  |                |   | $            | 1,331 |       |   | $        | 184,728  |   |   | $ |  |  |   | $        | 208,580  |  
|                     |                                                                          |                                                          |   |            |         |                |   |              |       |       |   |          |          |   |   |   |   |  |   |         
|INVESTING ACTIVITIES |                                                                          |                                                          |   |            |         |                |   |              |       |       |   |          |          |   |   |   |   |  |   |         
|                     | Proceeds from sales of assets                                            |                                                          |   | 1,542      |         |                |   | 13,991       |       |       |   | 7,641    |          |   |   |  |   |  |   | 23,174   |         
|                     | Net proceeds from sale of businesses and
    investments                 |                                                          |   |           |         |                |   | 14,837       |       |       |   | 13,149   |          |   |   |  |   |  |   | 27,986   |         
|                     | Purchases of investments                                                 |                                                          |   |           |         |                |   |             |       |       |   | (767     | )        |   |   |  |   |  |   | (767     | )       
|                     | Capital additions                                                        |                                                          |   | (3,599     | )       |                |   | (26,388      | )     |       |   | (153,534 | )        |   |   |  |   |  |   | (183,521 | )       
|                     |                                                                          |                                                          |   |            |         |                |   |              |       |       |   |          |          |   |   |   |   |  |   |         
|                     |                                                                          | Cash flow (used in) provided by investing
    activities |   |            | (2,057  | )              |   |              | 2,440 |       |   |          | (133,511 | ) |   |   |  |  |   |          | (133,128 | )
|                     |                                                                          |                                                          |   |            |         |                |   |              |       |       |   |          |          |   |   |   |   |  |   |         
|FINANCING ACTIVITIES |                                                                          |                                                          |   |            |         |                |   |              |       |       |   |          |          |   |   |   |   |  |   |         
|                     | Repurchase of notes                                                      |                                                          |   | (110,133   | )       |                |   |             |       |       |   |         |          |   |   |  |   |  |   | (110,133 | )       
|                     | Short-term debt borrowings                                               |                                                          |   |           |         |                |   | 9,765        |       |       |   | 16,349   |          |   |   |  |   |  |   | 26,114   |         
|                     | Short-term debt repayments                                               |                                                          |   |           |         |                |   | (9,791       | )     |       |   | (14,766  | )        |   |   |  |   |  |   | (24,557  | )       
|                     | Long-term debt borrowings                                                |                                                          |   | 372,746    |         |                |   | 650          |       |       |   | 30,298   |          |   |   |  |   |  |   | 403,694  |         
|                     | Long-term debt repayments                                                |                                                          |   | (3,325     | )       |                |   | (784         | )     |       |   | (18,365  | )        |   |   |  |   |  |   | (22,474  | )       
|                     | Dividends paid to common shareholders                                    |                                                          |   | (25,210    | )       |                |   |             |       |       |   |         |          |   |   |  |   |  |   | (25,210  | )       
|                     | Dividends paid to minority shareholders                                  |                                                          |   |           |         |                |   | (414         | )     |       |   | (8,577   | )        |   |   |  |   |  |   | (8,991   | )       
|                     | Proceeds from issuance of common stock                                   |                                                          |   | 4,236      |         |                |   |             |       |       |   |         |          |   |   |  |   |  |   | 4,236    |         
|                     |                                                                          |                                                          |   |            |         |                |   |              |       |       |   |          |          |   |   |   |   |  |   |         
|                     |                                                                          | Cash flow provided by (used in) financing
    activities |   |            | 238,314 |                |   |              | (574  | )     |   |          | 4,939    |   |   |   |  |  |   |          | 242,679  |  
|                     |                                                                          |                                                          |   |            |         |                |   |              |       |       |   |          |          |   |   |   |   |  |   |         
|                     | Effect of foreign exchange rate changes on cash
    and cash equivalents |                                                          |   |           |         |                |   |             |       |       |   | 3,420    |          |   |   |  |   |  |   | 3,420    |         
|                     |                                                                          |                                                          |   |            |         |                |   |              |       |       |   |          |          |   |   |   |   |  |   |         
|                     | Increase in cash and cash
    equivalents                                |                                                          |   | 258,778    |         |                |   | 3,197        |       |       |   | 59,576   |          |   |   |  |   |  |   | 321,551  |         
|                     | Cash and cash equivalents at beginning of period                         |                                                          |   | 93,282     |         |                |   | (4,656       | )     |       |   | 272,700  |          |   |   |  |   |  |   | 361,326  |         
|                     |                                                                          |                                                          |   |            |         |                |   |              |       |       |   |          |          |   |   |   |   |  |   |         
|                     | Cash and cash equivalents at end of
    period                           |                                                          | $ | 352,060    |         |                | $ | (1,459       | )     |       | $ | 332,276  |          |   | $ |  |   |  | $ | 682,877  |         
|                     |                                                                          |                                                          |   |            |         |                |   |              |       |       |   |          |          |   |   |   |   |  |   |         

30



---



##### Table of Contents



DOLE FOOD COMPANY, INC.




ITEM 2.     MANAGEMENTS
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS


Going-Private Merger and Refinancing
Transactions

On December 18, 2002, the Company signed a
definitive merger agreement with David H. Murdock, the
Companys Chairman and Chief Executive Officer, pursuant to
which Mr. Murdock would acquire the approximately 76% of
the Companys common stock that he and his affiliates did
not already own for $33.50 per share in cash. On March 26,
2003, the merger was approved at a special meeting of the
Companys stockholders. The transaction was successfully
completed on March 28, 2003 and the Company became wholly
owned by Mr. Murdock through DHM Holding Company, Inc., a
Delaware corporation (HoldCo). As a result of the
transaction, the Companys outstanding shares of common
stock were retired and all outstanding stock options were
settled in cash, except those options held by Mr. Murdock
that were cancelled without payment.

The purchase price of all of the outstanding
common stock of the Company not already owned by
Mr. Murdock, plus transaction costs, was approximately
$1.55 billion. The funds necessary to purchase these shares of
the Company consisted of a $125 million capital
contribution by HoldCo, funds borrowed under $1.125 billion
of new senior secured credit facilities (consisting of
$825 million of term loan facilities and $300 million
of revolving credit facilities) and the issuance of
$475 million principal amount of 8.875% Senior Notes due
2011 (the 2011 Notes). The 2011 Notes were offered
within the United States only to qualified institutional
investors pursuant to Rule 144A under the Securities Act of
1933 (the Securities Act) and to persons outside the
United States in compliance with Regulation S under the
Securities Act. The Credit Agreement with respect to the new
senior secured credit facilities and the Indenture with respect
to the 2011 Notes contain significant restrictions and covenants
affecting, among other things, the operations and finances of
the Company and its subsidiaries.

In addition, on March 28, 2003, the Company
repaid its 7% Senior Notes due 2003 and called for redemption
its 6.375% Senior Notes due 2005 with outstanding balances of
approximately $209.8 million and $300 million,
respectively, at March 22, 2003. The Companys 7.25%
Senior Notes due 2009 and 7.875% Debentures due 2013 remain
outstanding; however, the terms of both the Senior Notes due
2009 and Debentures due 2013 were modified to provide for
substantially the same interest rates, covenants and guarantees
from certain of the Companys subsidiaries as are provided
for by the 2011 Notes. The modifications provide for interest at
8.625% on the Senior Notes due 2009 and 8.75% on the Debentures
due 2013.

In connection with the transaction, the Company
sold its interest in an aircraft under an operating
sale-leaseback agreement for approximately $28.9 million,
which approximated its book value. The Company also purchased
shipping containers for approximately $76.5 million that
were previously leased under separate capital and operating
lease agreements and modified the provisions of its corporate
headquarters financing facility to provide for substantially the
same interest rate as the new senior secured credit facilities.

On May 29, 2003, the Company issued and sold
$400 million aggregate principal amount of 7.25% Senior
Notes due 2010 (the 2010 Notes) in an offering
exempt from the registration requirements of the Securities Act
of 1933. The Company used the net proceeds from this offering of
approximately $392.7 million, together with other available
cash of $7.3 million, to prepay $400 million of the
term loans under the senior secured credit facility. In
connection with the offering, the Company and the lenders under
the senior secured credit facility effected certain amendments
to the Companys senior secured credit facility. The
indenture with respect to the 2010 Notes contains covenants and
restrictions substantially identical to those under the 2011
Notes.

The going-private merger transaction has been
accounted for as a purchase at the HoldCo level with the related
purchase accounting pushed-down to the Company as of the date of
the transaction.

In July 2003, the Company filed two registration
statements on Form S-4 with the Securities and Exchange
Commission (SEC) offering the holders of the 2011
Notes and the 2010 Notes the opportunity to exchange

31



---



##### Table of Contents



their notes for publicly registered notes having
substantially identical terms, except for certain restrictions
on transfer that pertain to the original notes. These
registration statements were declared effective on July 25,
2003. The exchange offers, which commenced on July 25,
2003, and expired on August 25, 2003, resulted in all notes
being exchanged for publicly registered notes.


Results of Operations

As a result of the going-private merger
transaction, the Companys Condensed Consolidated Financial
Statements present the results of operations, financial position
and cash flows prior to the date of the merger transaction as
the Predecessor. The merger transaction and the
Companys results of operations, financial position and
cash flows thereafter are presented as the
Successor. Predecessor results have not been
aggregated with those of the Successor in accordance with
accounting principles generally accepted in the U.S. and
accordingly the Companys Condensed Consolidated Financial
Statements do not show results of operations or cash flows for
the three quarters ended October 4, 2003. However, in order
to facilitate an understanding of the Companys results in
comparison with the three quarters ended October 5, 2002,
the results of operations of the Predecessor for the quarter
ended March 22, 2003 and the Successor for the two quarters
ended October 4, 2003, are presented combined
(Combined).

The push-down of purchase accounting to the
Company and the substantial increase in debt as a result of the
going-private merger and refinancing transactions, have had a
significant impact on the Companys results of operations
in the quarter and combined three quarters ended October 4,
2003 in comparison to the Predecessor results for the quarter
and three quarters ended October 5, 2002. Included in the
Companys results of operations for the quarter and
combined three quarters ended October 4, 2003 is
approximately $7.7 million and $13.5 million,
respectively, of purchase accounting related depreciation and
amortization, $11.8 million and $50.4 million,
respectively, of purchase accounting expense related to the
step-up of inventory, additional purchase accounting losses of
$5.5 million related to the sale of property, plant and
equipment and a net purchase accounting benefit of
$6.1 million due to the settlement of foreign currency
related items, for a total of $18.9 million and
$63.3 million, respectively. In addition, the quarter and
three quarters ended October 4, 2003 include
$5.7 million and $27.1 million, respectively, of
going-private and refinancing related expenses. The impact of
these expenses on the Companys results of operations for
the quarter and three months ended October 4, 2003 are as
follows: additional costs of products sold ($20.0 million
and $64.4 million, respectively); additional selling,
marketing and general and administrative expenses
($2.6 million and $13.5 million, respectively);
decrease in other income (expense)  net
($2 million and $12.5 million, respectively); and
decrease in income before income taxes ($24.6 million and
$90.4 million, respectively). Refer to Note 5 to the
Condensed Consolidated Financial Statements for information on
the pro forma results of operations as if the going-private
merger and refinancing transactions had occurred at the
beginning of each of the periods presented.

Selected results of operations for the quarters
and three quarters ended October 4, 2003 and
October 5, 2002 were as follows (in thousands):

|                 |  |               |           |             |  |   |           | 
|---------------- |  | ------------- | --------- | ----------- |  | - | --------- | 
|                 |  |              
|                 |  | Quarter Ended
|                 |  |              
|                 |  | October 4,    |           | October 5, 
|                 |  | 2003          |           | 2002       
|                 |  |               |           |            
|                 |  | Successor     |           | Predecessor
|                 |  |               |           |            
|Revenues, net    |  | $             | 1,357,861 |             |  | $ | 1,254,494 | 
|Operating income |  | $             | 55,898    |             |  | $ | 39,041    | 
|Interest expense |  | $             | 48,993    |             |  | $ | 26,802    | 
|Income taxes     |  | $             | 1,539     |             |  | $ | 5,699     | 
|Net income       |  | $             | 7,530     |             |  | $ | 14,650    | 

32



---



##### Table of Contents



|                                                          |  |              |           |               |  |                |           |                |  |   |           |  |  |   |           |  
|--------------------------------------------------------- |  | ------------ | --------- | ------------- |  | -------------- | --------- | -------------- |  | - | --------- |  |  | - | --------- | -
|                                                          |  | Two Quarters |           |               |  | Three Quarters |           | Three Quarters
|                                                          |  | Ended        |           | Quarter Ended |  | Ended          |           | Ended         
|                                                          |  | October 4,   |           | March 22,     |  | October 4,     |           | October 5,    
|                                                          |  | 2003         |           | 2003          |  | 2003           |           | 2002          
|                                                          |  |              |           |               |  |                |           |               
|                                                          |  | Successor    |           | Predecessor   |  | Combined       |           | Predecessor   
|(In thousands)                                            |  |              |           |               |  |                |           |               
|Revenues, net                                             |  | $            | 2,574,683 |               |  | $              | 1,073,170 |                |  | $ | 3,647,853 |  |  | $ | 3,432,094 |  
|Operating income                                          |  | $            | 124,477   |               |  | $              | 88,790    |                |  | $ | 213,267   |  |  | $ | 237,936   |  
|Interest expense                                          |  | $            | 86,772    |               |  | $              | 19,647    |                |  | $ | 106,419   |  |  | $ | 60,799    |  
|Income taxes                                              |  | $            | 5,363     |               |  | $              | 13,100    |                |  | $ | 18,463    |  |  | $ | 53,581    |  
|Cumulative effect of a change in accounting
    principle |  | $            |          |               |  | $              |          |                |  | $ |          |  |  | $ | (119,917  | )
|Net income                                                |  | $            | 25,431    |               |  | $              | 60,788    |                |  | $ | 86,219    |  |  | $ | 17,860    |  

Revenues

For the quarter ended October 4, 2003,
revenues increased 8% to $1.36 billion from
$1.25 billion in the quarter ended October 5, 2002.
The increase is primarily due to favorable U.S. dollar exchange
rates versus the euro, Swedish krona, and Japanese yen, which
positively impacted revenues, primarily in the fresh fruit
segment, by approximately $49.6 million. In addition, there
were overall improved volumes in the Companys fresh fruit,
fresh vegetables and packaged foods segments, partially offset
by the divestiture of certain businesses in the prior year.

For the three quarters ended October 4,
2003, revenues increased 6% to $3.65 billion from
$3.43 billion in the prior year. This is primarily due to
favorable U.S. dollar exchange rates versus the euro,
Swedish krona and Japanese yen, which positively impacted
revenues, primarily in the fresh fruit segment, by approximately
$189.6 million. In addition, there were overall improved
volumes in the Companys fresh fruit and packaged foods
segments, partially offset by significantly lower pricing in
commodity vegetables in the first quarter of 2003 and the
divestiture of certain businesses in the prior year.

There were no purchase accounting adjustments
that impacted revenues for the quarter or three quarters ended
October 4, 2003.

Operating Income

For the quarter ended October 4, 2003,
operating income increased to $55.9 million from
$39 million in the quarter ended October 5, 2002. The
increase was primarily attributable to improved operating
results from the Companys fresh fruit, fresh vegetables
and fresh-cut flowers segments. Favorable U.S. dollar
exchange rates primarily versus the euro, the Swedish krona, and
Japanese yen benefited the quarter by approximately
$4.9 million, net of hedging activity. The current quarter
also benefited from the absence of a legal charge of
$9.2 million incurred in the prior year related to DBCP
litigation. These benefits were partially offset by increased
expenses of approximately $18.9 million as a result of
purchase accounting adjustments to inventory
($11.8 million), property, plant and equipment
($10 million), amortizable intangibles ($3.2 million)
and a benefit on foreign currency related items
($6.1 million).

For the three quarters ended October 4,
2003, operating income decreased to $213.3 million from
$237.9 million in the prior year. The decrease was
primarily attributable to increased expenses of
$63.3 million as a result of purchase accounting
adjustments to inventory ($50.4 million), property, plant
and equipment ($13.4 million), amortizable intangibles
($5.6 million) and a benefit on foreign currency related
items ($6.1 million). The decrease was also attributable to
lower earnings from the Companys fresh vegetables segment,
which was impacted by extraordinarily high commodity pricing in
the first quarter of 2002 due to product shortages, and a charge
of approximately $6.9 million related to the settlement of
litigation in connection with the going-private merger
transaction. These decreases were partially offset by improved
earnings from the Companys fresh fruit and fresh-cut
flowers segments. Earnings also improved due to favorable
U.S. dollar exchange rates versus the euro, the Swedish
krona, the Japanese yen and the Colombian

33



---



##### Table of Contents



peso, which net of hedging activity, benefited
the three quarters ended October 4, 2003 by approximately
$40.4 million, and the absence of DBCP litigation charges
incurred in the prior year of $13.2 million.


Interest Expense and Income Taxes

Interest expense for the quarter ended
October 4, 2003 was $49 million compared to
$26.8 million in the quarter ended October 5, 2002.
Interest expense for the three quarters ended October 4,
2003 was $106.4 million compared to $60.8 million in
the prior year. Interest expense in the quarter and three
quarters ended October 4, 2003 increased primarily as a
result of the issuance of additional debt issued to finance the
going-private merger transaction and the addition of the
corporate headquarters financing facility.

As a result of the consummation of the
going-private merger transaction, income tax expense for the
quarter ended March 22, 2003 was based on earnings for the
period from December 29, 2002 through March 22, 2003,
to reflect the final separate financial reporting period for the
Company in its predecessor form. After the consummation of the
going-private transaction, the results of operations are
attributable to the new successor company.

Income tax expense for the quarter and two
quarters ended October 4, 2003 of $1.5 million and
$5.4 million, respectively, reflects the Companys
expected effective income tax rate of approximately 17% for the
three-quarter successor period ending January 3, 2004. The
income tax expense of approximately $13.1 million for the
quarter ended March 22, 2003 reflects the Companys
effective income tax rate for that quarter of approximately 18%.
The income tax expense for the quarter and three quarters ended
October 5, 2002, of approximately $5.7 million and
$53.6 million, respectively, reflects the Companys
then expected effective income tax rate for the full fiscal year
of 28%. The reduction in the effective income tax rate in the
current year is primarily due to a change in the mix of taxable
earnings, as well as the impact of tax refunds received in the
current year. For all periods presented, the Companys
effective income tax rate differs from the U.S. federal
statutory rate primarily due to earnings from operations being
taxed in foreign jurisdictions at a net effective rate lower
than the U.S. rate. No U.S. taxes have been provided
on these earnings because such earnings are intended to be
indefinitely invested outside the U.S.

Cumulative Effect of a Change in Accounting
Principle

During the second quarter of 2002, the Company
completed the two-step process of the transitional goodwill
impairment test prescribed in Statement of Financial Accounting
Standards No. 142 (FAS 142),
Goodwill and Other Intangible Assets. The
transitional goodwill impairment test resulted in the Company
recognizing a non-cash transitional goodwill impairment charge
of $119.9 million related entirely to the fresh-cut flowers
reporting segment. As required by FAS 142, the
$119.9 million charge has been retroactively reflected as a
cumulative effect of a change in accounting principle in the
Companys Condensed Consolidated Statement of Operations
for the three quarters ended October 5, 2002.

Segment Results of Operations

The Company has four primary reportable operating
segments: fresh fruit, fresh vegetables, packaged foods and
fresh-cut flowers. These reportable segments are managed
separately due to differences in their products, production
processes, distribution channels and customer bases.

The Companys management evaluates and
monitors segment performance primarily through earnings before
interest expense and income taxes (EBIT). EBIT is
calculated by adding income taxes and interest expense to net
income. Management believes that segment EBIT provides useful
information for analyzing the underlying business results as
well as allowing investors a means to evaluate the financial
results of each segment in relation to the Company as a whole.
EBIT is not defined under accounting principles generally
accepted in the United States of America (GAAP) and
should not be considered in isolation or as a substitute for net
income or cash flow measures prepared in accordance with GAAP or
as a measure of the Companys profitability or liquidity.
Additionally, the Companys computation of EBIT may not be
comparable to other similarly titled measures computed by other
companies, because not all companies calculate EBIT in the same
fashion.

34



---



##### Table of Contents



Revenues from external customers and EBIT for the
reportable operating segments and corporate and other were as
follows (in thousands):

|                                  |                          |               |           |             |   |   |           |         |  
|--------------------------------- | ------------------------ | ------------- | --------- | ----------- | - | - | --------- | ------- | -
|                                  |                          |              
|                                  |                          | Quarter Ended
|                                  |                          |              
|                                  |                          | October 4,    |           | October 5, 
|                                  |                          | 2003          |           | 2002       
|                                  |                          |               |           |            
|                                  |                          | Successor     |           | Predecessor
|                                  |                          |               |           |            
|Revenues from external customers: |                          |               |           |             |   |   |           |        
|                                  | Fresh fruit              |               | $         | 874,682     |   |   | $         | 782,241 |  
|                                  | Fresh vegetables         |               |           | 257,151     |   |   |           | 232,121 |  
|                                  | Packaged foods           |               |           | 175,567     |   |   |           | 186,127 |  
|                                  | Fresh-cut flowers        |               |           | 40,763      |   |   |           | 41,879  |  
|                                  | Other operating segments |               |           | 9,698       |   |   |           | 12,126  |  
|                                  |                          |               |           |             |   |   |           |        
|                                  |                          | $             | 1,357,861 |             |   | $ | 1,254,494 |        
|                                  |                          |               |           |             |   |   |           |        
|EBIT:                             |                          |               |           |             |   |   |           |        
|                                  | Fresh fruit              |               | $         | 52,937      |   |   | $         | 43,677  |  
|                                  | Fresh vegetables         |               |           | 24,724      |   |   |           | 18,400  |  
|                                  | Packaged foods           |               |           | 7,090       |   |   |           | 19,198  |  
|                                  | Fresh-cut flowers        |               |           | (3,546      | ) |   |           | (7,044  | )
|                                  | Other operating segments |               |           | 275         |   |   |           | 97      |  
|                                  |                          |               |           |             |   |   |           |        
|                                  | Total operating segments |               |           | 81,480      |   |   |           | 74,328  |  
|                                  | Corporate and other      |               |           | (23,418     | ) |   |           | (27,177 | )
|Interest expense                  |                          |               | 48,993    |             |   |   | 26,802    |        
|                                  |                          |               |           |             |   |   |           |        
|Income before income taxes        |                          | $             | 9,069     |             |   | $ | 20,349    |        
|                                  |                          |               |           |             |   |   |           |        

|                                  |                          |              |           |               |  |                |           |                |  |   |           |           |  |   |           |           | 
|--------------------------------- | ------------------------ | ------------ | --------- | ------------- |  | -------------- | --------- | -------------- |  | - | --------- | --------- |  | - | --------- | --------- | 
|                                  |                          | Two Quarters |           |               |  | Three Quarters |           | Three Quarters
|                                  |                          | Ended        |           | Quarter Ended |  | Ended          |           | Ended         
|                                  |                          | October 4,   |           | March 22,     |  | October 4,     |           | October 5,    
|                                  |                          | 2003         |           | 2003          |  | 2003           |           | 2002          
|                                  |                          |              |           |               |  |                |           |               
|                                  |                          | Successor    |           | Predecessor   |  | Combined       |           | Predecessor   
|(In thousands)                    |                          |              |           |               |  |                |           |               
|Revenues from external customers: |                          |              |           |               |  |                |           |                |  |   |           |           |  |   |           |          
|                                  | Fresh fruit              |              | $         | 1,705,415     |  |                | $         | 725,115        |  |   | $         | 2,430,530 |  |   | $         | 2,171,246 | 
|                                  | Fresh vegetables         |              |           | 457,124       |  |                |           | 176,865        |  |   |           | 633,989   |  |   |           | 652,788   | 
|                                  | Packaged foods           |              |           | 310,049       |  |                |           | 116,712        |  |   |           | 426,761   |  |   |           | 444,062   | 
|                                  | Fresh-cut flowers        |              |           | 84,964        |  |                |           | 48,506         |  |   |           | 133,470   |  |   |           | 140,531   | 
|                                  | Other operating segments |              |           | 17,131        |  |                |           | 5,972          |  |   |           | 23,103    |  |   |           | 23,467    | 
|                                  |                          |              |           |               |  |                |           |                |  |   |           |           |  |   |           |          
|                                  |                          | $            | 2,574,683 |               |  | $              | 1,073,170 |                |  | $ | 3,647,853 |           |  | $ | 3,432,094 |          
|                                  |                          |              |           |               |  |                |           |                |  |   |           |           |  |   |           |          

35



---



##### Table of Contents



|                                                                                         |                          |              |        |               |   |                |        |                |   |   |         |         |   |   |         |         |  
|---------------------------------------------------------------------------------------- | ------------------------ | ------------ | ------ | ------------- | - | -------------- | ------ | -------------- | - | - | ------- | ------- | - | - | ------- | ------- | -
|                                                                                         |                          | Two Quarters |        |               |   | Three Quarters |        | Three Quarters
|                                                                                         |                          | Ended        |        | Quarter Ended |   | Ended          |        | Ended         
|                                                                                         |                          | October 4,   |        | March 22,     |   | October 4,     |        | October 5,    
|                                                                                         |                          | 2003         |        | 2003          |   | 2003           |        | 2002          
|                                                                                         |                          |              |        |               |   |                |        |               
|                                                                                         |                          | Successor    |        | Predecessor   |   | Combined       |        | Predecessor   
|(In thousands)                                                                           |                          |              |        |               |   |                |        |               
|EBIT:                                                                                    |                          |              |        |               |   |                |        |                |   |   |         |         |   |   |         |        
|                                                                                         | Fresh fruit              |              | $      | 133,891       |   |                | $      | 70,174         |   |   | $       | 204,065 |   |   | $       | 189,340 |  
|                                                                                         | Fresh vegetables         |              |        | 43,085        |   |                |        | 16,703         |   |   |         | 59,788  |   |   |         | 75,412  |  
|                                                                                         | Packaged foods           |              |        | 1,272         |   |                |        | 11,693         |   |   |         | 12,965  |   |   |         | 44,665  |  
|                                                                                         | Fresh-cut flowers        |              |        | (4,656        | ) |                |        | 6,394          |   |   |         | 1,738   |   |   |         | (5,820  | )
|                                                                                         | Other operating segments |              |        | 31            |   |                |        | 65             |   |   |         | 96      |   |   |         | 345     |  
|                                                                                         |                          |              |        |               |   |                |        |                |   |   |         |         |   |   |         |        
|                                                                                         | Total operating segments |              |        | 173,623       |   |                |        | 105,029        |   |   |         | 278,652 |   |   |         | 303,942 |  
|                                                                                         | Corporate and other      |              |        | (56,057       | ) |                |        | (11,494        | ) |   |         | (67,551 | ) |   |         | (51,785 | )
|Interest expense                                                                         |                          |              | 86,772 |               |   |                | 19,647 |                |   |   | 106,419 |         |   |   | 60,799  |        
|                                                                                         |                          |              |        |               |   |                |        |                |   |   |         |         |   |   |         |        
|Income before income taxes and cumulative effect
    of a change in accounting principle |                          | $            | 30,794 |               |   | $              | 73,888 |                |   | $ | 104,682 |         |   | $ | 191,358 |        
|                                                                                         |                          |              |        |               |   |                |        |                |   |   |         |         |   |   |         |        

Fresh Fruit

Fresh fruit revenues in the quarter ended
October 4, 2003 increased 12% to $874.7 million from
$782.2 million in the quarter ended October 5, 2002.
The increase in fresh fruit revenues was primarily due to the
following: favorable foreign currency exchange rates versus the
U.S. dollar, improved volumes of Tropical Gold®
Pineapples sold in North America, Europe and Asia, increased
volumes of bananas sold in North America and Asia, and expanded
activity in Europe ripening and distribution and higher volumes
in the Companys Asian citrus business. These benefits were
partially offset by lower pricing for bananas in North America
and Asia and the shutdown of the Companys North American
deciduous business in the prior year. Fresh fruit revenues in
the three quarters ended October 4, 2003 increased 12% to
$2.43 billion from $2.17 billion in the three quarters
ended October 5, 2002. Revenues for the three quarters were
impacted by the same factors that drove the increase for the
quarter. Favorable exchange rates benefited fresh fruit revenues
for the quarter and three quarters ended October 4, 2003 by
$49.3 million and $186.5 million, respectively. In
November 2003, the Company changed the name of its Latin-sourced
DOLE PREMIUM SELECT® Pineapple to Tropical Gold®.

Fresh fruit EBIT in the quarter ended
October 4, 2003 increased to $52.9 million from
$43.7 million in the quarter ended October 5, 2002.
EBIT increased primarily due to higher volumes of Tropical
Gold® Pineapple, improved volumes of apples sold in North
America in the deciduous business, and higher banana volumes
sold in Asia. The increase in EBIT was partially offset by
$8.1 million of expenses related to purchase accounting.
EBIT was also negatively impacted by higher fuel prices and
pricing pressure in sales of North America and Asia bananas.
Fresh fruit EBIT in the three quarters ended October 4,
2003 increased to $204.1 million from $189.3 million
in the three quarters ended October 5, 2002. EBIT increased
primarily due to higher sales and the absence in the current
year of a $4 million legal expense in the first quarter of
2002 related to DBCP litigation. These increases were partially
offset by higher shipping and distribution costs, due in part to
higher fuel prices, and the impact of purchase accounting of
$22.8 million. Favorable exchange rates, net of hedging
activity, benefited EBIT for the quarter and three quarters
ended October 4, 2003 by approximately $4 million and
$31.3 million, respectively.

Fresh Vegetables

Fresh vegetables revenues for the quarter ended
October 4, 2003 increased to $257.2 million from
$232.1 million in the quarter ended October 5, 2002.
The increase was due to higher volumes in the Companys
North American packaged salads businesses, combined with
favorable commodity pricing. These benefits were partially
offset by slightly lower commodity volumes, lower packaged
salads pricing and the

36



---



##### Table of Contents



disposition of the Companys interest in
Pascual Hermanos, S.A. (Pascual Hermanos) in the
third quarter of 2002. Fresh vegetables revenues for the three
quarters ended October 4, 2003 decreased to
$634 million from $652.8 million in the three quarters
ended October 5, 2002. The decrease was mainly attributable
to significantly lower North American commodity vegetable prices
in the first fiscal quarter of 2003, lower packaged salads
pricing, and the sale of Pascual Hermanos. Higher prices in 2002
were primarily due to an industry-wide lettuce shortage in the
first quarter of 2002. These decreases were partially offset by
higher commodity and packaged salads volumes. Pascual Hermanos
revenues were approximately $1.9 million and
$26.4 million, respectively, in the quarter and three
quarters ended October 5, 2002.


Fresh vegetables EBIT for the quarter ended
October 4, 2003 increased to $24.7 million from
$18.4 million in the quarter ended October 5, 2002.
The increase in EBIT was primarily due to the same factors that
drove the increase in revenues, partially offset by higher
packaged salads product costs, and the impact of purchase
accounting in the current quarter of $1.4 million. In
addition, the Company recorded a $4.3 million gain on the
sale of Pascual Hermanos in the third quarter of 2002. Fresh
vegetables EBIT for the three quarters ended October 4,
2003 decreased to $59.8 million from $75.4 million in
the three quarters ended October 5, 2002. The decrease was
primarily due to the same factors driving the decrease in
revenues. Pascual Hermanos EBIT was a loss of $0.8 million
and earnings of $4.0 million, respectively, in the quarter
and three quarters ended October 5, 2002.

Packaged Foods

Packaged foods revenues for the quarter ended
October 4, 2003 decreased to $175.6 million from
$186.1 million in the quarter ended October 5, 2002.
The decrease in revenues was primarily due to the disposal of
Saman S.A. (Saman) during the third quarter of 2002
and higher trade spending, which is treated as reduction of
revenues. These factors were partially offset by higher volumes
of canned pineapple and FRUIT BOWLS® in Europe and Asia,
higher volumes of canned pineapple and pineapple juice
concentrate in North America and the addition of bottled fruit
in the second quarter of 2003. Packaged foods revenues for the
three quarters ended October 4, 2003 decreased to
$426.8 million from $444.1 million in the three
quarters ended October 5, 2002. The decrease in revenues
was mainly attributable to the disposal of Saman, as well as
lower pricing in North America, Europe and Asia. These factors
were partially offset by higher volumes of canned pineapple and
FRUIT BOWLS® sold in Europe, higher volumes of canned
pineapple and pineapple juice concentrate sold in North America,
and the introduction of bottled fruit. Saman revenues were
approximately $11 million and $27.1 million,
respectively, in the quarter and three quarters ended
October 5, 2002.

EBIT in the packaged foods segment for the
quarter ended October 4, 2003 decreased to
$7.1 million from $19.2 million in the quarter ended
October 5, 2002. EBIT for the quarter decreased primarily
due to the impact of purchase accounting, which resulted in
additional depreciation and amortization of approximately
$10.6 million and higher promotions on FRUIT BOWLS®.
The Company also incurred a loss, net of the impact of purchase
accounting, of $2.4 million on the sale of its 81% interest
in Fabrica, a Honduran palm oil business, in the third quarter
of 2003. These factors were partially offset by the absence of
losses from Saman, which was sold in the prior year. Packaged
foods EBIT for the three quarters ended October 4, 2003
decreased to $13 million from $44.7 million in the
three quarters ended October 5, 2002. The decrease is
primarily due to the impact of purchase accounting, which
resulted in additional depreciation and amortization expense of
approximately $33.6 million, higher promotions on FRUIT
BOWLS® and timing of advertising costs. These decreases
were partially offset by higher sales in Europe and North
America and the absence of losses from Saman. Saman EBIT was a
loss of approximately $2 million and $3.7 million,
respectively, in the quarter and three quarters ended
October 5, 2002.

Fabrica revenues were approximately
$5.7 million and $17.6 million, respectively, in the
quarter and three quarters ended October 4, 2003. Fabrica
EBIT was $0.5 million and $1.3 million in the quarter
and three quarters ended October 4, 2003.

37



---



##### Table of Contents



Fresh-Cut Flowers

Fresh-cut flowers revenues for the quarter ended
October 4, 2003 decreased to $40.8 million from
$41.9 million in the quarter ended October 5, 2002.
Revenues for the three quarters ended October 4, 2003
decreased to $133.5 million from $140.5 million in the
three quarters ended October 5, 2002. The decrease in
revenues for the quarter and three quarters ended
October 4, 2003, was primarily due to lower pricing, mainly
in the wholesale commodity sector.

EBIT in the fresh-cut flowers segment for the
quarter ended October 4, 2003 improved to a loss of
$3.5 million from a loss of $7 million in the quarter
ended October 5, 2002. EBIT for the quarter benefited from
lower operating costs, primarily as a result of the closure
during 2002 of five production farms in Colombia and one in
Mexico, and favorable foreign currency exchange rates between
the U.S. dollar and the Colombian peso, resulting in lower
U.S. dollar equivalent product costs. Fresh-cut flowers EBIT for
the three quarters ended October 4, 2003 increased to
$1.7 million from a loss of $5.8 million in the three
quarters ended October 5, 2002. The increase was primarily
due to the same factors impacting the quarter ended
October 4, 2003, as well as lower third party purchases of
inventory and lower import duties, partially offset by increased
depreciation and amortization of approximately $5.2 million
due to the impact of purchase accounting. Favorable foreign
exchange rates benefited EBIT in the quarter and three quarters
ended October 4, 2003 by approximately $0.9 million
and $8.3 million respectively.

Corporate and Other

Corporate and other EBIT improved in the quarter
ended October 4, 2003 to a loss of $23.4 million from
a loss of $27.2 million in the quarter ended
October 5, 2002. The improvement in EBIT for the quarter is
primarily due to lower legal expenses partially offset by lower
interest income due to lower average cash balances. Legal costs
decreased from prior year largely due to the absence of
$9.2 million in expenses attributable to lawsuits filed
against the Company related to its past use of an agricultural
chemical called DBCP as further discussed in Part II,
Item 1 of this Form 10-Q. Corporate and other EBIT for
the three quarters ended October 4, 2003 decreased to a
loss of $67.6 million from a loss of $51.8 million in
the three quarters ended October 5, 2002. The decrease for
the three quarters is primarily due to the write-off of
$12.6 million of deferred debt issuance costs upon the
early retirement of debt during 2003 and a litigation settlement
of $6.9 million related to the going-private merger
transaction. These costs were partially offset by the same
factors that impacted EBIT for the quarter ended October 4,
2003.

Adoption of New Accounting Policies

In the quarters ended March 22, 2003 and
June 14, 2003, the Company adopted new accounting policies
in accordance with the provisions of the following recently
issued accounting pronouncements. With the exception of the
adoption of a new accounting policy for interests in
variable-interest entities acquired before February 1,
2003, these new accounting policies became effective
December 29, 2002, the first day of the Companys 2003
fiscal year:

Asset Retirement Obligations:In June 2001, the Financial Accounting
Standards Board (FASB) issued Statement of Financial
Accounting Standards No. 143 (FAS 143),
Accounting for Asset Retirement Obligations. This
standard provides accounting guidelines for the cost of legal
obligations associated with the retirement of long-lived assets.
FAS 143 requires that companies recognize the fair value of
a liability for asset retirement obligations in the period in
which the obligations are incurred and capitalize that amount as
part of the book value of the long-lived asset. The resulting
net cost is then depreciated over the remaining life of the
underlying long-lived asset. The adoption of FAS 143 did
not have a material impact on the Companys financial
condition or results of operations.

Restructuring Costs:In June 2002, the FASB issued
Statement of Financial Accounting Standards No. 146
(FAS 146), Accounting for Costs
Associated with Exit or Disposal Activities. FAS 146
addresses financial accounting and reporting for costs
associated with exit or disposal activities and nullifies
Emerging Issues Task Force Issue No. 94-3
(EITF 94-3), Liability Recognition for
Certain Employee Termination Benefits and Other Costs to Exit an
Activity (including Certain Costs Incurred in a
Restructuring). This

38



---



##### Table of Contents



statement requires that the fair value of an
initial liability for a cost associated with an exit or disposal
activity be recognized when the liability is incurred as opposed
to when the entity commits to an exit plan, thereby eliminating
the definition and requirements for recognition of exit costs.
The adoption of FAS 146 did not have a material impact on
the Companys financial condition or results of operations.


Guarantees:In
November 2002, the FASB issued FASB Interpretation No. 45
(FIN 45), Guarantors Accounting and
Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others. FIN 45
elaborates on the disclosures to be made by a guarantor about
its obligations under certain types of guarantees. FIN 45
also clarifies that a guarantor is required to recognize, at the
inception of a guarantee, a liability for the fair value of the
obligation undertaken in issuing the guarantee. FIN 45
specifically identifies obligations that are excluded from the
provisions related to recognizing a liability at inception;
however, these guarantees are subject to the disclosure
requirements of FIN 45. The recognition and measurement
provisions of FIN 45 are applicable on a prospective basis
to guarantees issued or modified after the beginning of the
fiscal year in which FIN 45 is adopted. The adoption of
FIN 45 did not have a material impact on the Companys
financial condition or results of operations.

Stock-Based Compensation:In December 2002, the FASB issued
Statement of Financial Accounting Standards No. 148
(FAS 148), Accounting for Stock-Based
Compensation  Transition and Disclosure, an amendment
of FASB Statement No. 123. FAS 148 amends
Statement of Financial Accounting Standards No. 123
(FAS 123), Accounting for Stock-Based
Compensation, to provide alternative methods of transition
for a voluntary change to the fair value based method of
accounting for stock-based employee compensation. Beginning on
December 29, 2002, the Company elected to adopt the fair
value method of accounting for stock-based employee
compensation. Prior to December 29, 2002, the Company
applied the intrinsic value method of accounting for stock
options issued to employees. The Company has elected to apply
the prospective method of adoption outlined in FAS 148. The
prospective method applies the recognition provisions of
FAS 123 to all employee awards granted, modified or settled
after the beginning of the fiscal years in which the recognition
provisions are first applied. The adoption of the fair value
method of accounting for stock options issued to employees, on a
prospective basis, did not have a material impact on the
Companys financial condition or results of operations for
the quarter ended March 22, 2003. In connection with the
going-private merger transaction, the Company settled or
cancelled all outstanding stock options.

Special-Purpose Entities:In January 2003, the FASB issued FASB
Interpretation No. 46 (FIN 46),
Consolidation of Variable Interest Entities. This
standard clarifies the application of Accounting Research
Bulletin No. 51, Consolidated Financial
Statements, and addresses consolidation by business
enterprises of variable interest entities (more commonly known
as Special-Purpose Entities or SPEs). FIN 46 requires
existing unconsolidated variable interest entities to be
consolidated by their primary beneficiaries if the entities do
not effectively disperse risk among the parties involved. This
statement is immediately effective for variable interest
entities created or in which an enterprise obtains an interest
after January 31, 2003. In connection with the
going-private merger transaction, effective March 23, 2003,
the Company elected to early adopt the provisions of FIN 46
applicable to interests in variable interest entities acquired
before February 1, 2003. The adoption of FIN 46
resulted in the Company consolidating the variable-interest
entity that owns the Companys corporate headquarters
building. The consolidation resulted in an increase in the
Companys long-term debt of approximately
$54.9 million and an increase in assets, primarily land and
buildings, of approximately $48.1 million. The difference
of approximately $6.8 million was allocated to goodwill in
purchase accounting. In addition, for the quarter and two
quarters ended October 4, 2003, the consolidation of the
variable interest entity resulted in an increase in interest
expense of approximately $0.8 million and
$1.4 million, respectively, with a corresponding decrease
in rent expense, and additional depreciation expense of
approximately $0.5 million and $0.9 million,
respectively.

In the quarter ended October 4, 2003, the
Company adopted new accounting policies in accordance with the
provisions of the following recently issued accounting
pronouncements. These policies became effective June 15,
2003, the first day of the Companys third fiscal quarter:

Derivative Instruments and Hedging Activities:In April 2003, the FASB issued FASB
Statement of Financial Accounting Standards No. 149
(FAS 149), Amendments of Statement 133 on
Derivative

39



---



##### Table of Contents



Instruments and Hedging Activities.
FAS 149 amends and clarifies financial accounting and
reporting for derivative instruments, including certain
instruments embedded in other contracts and for hedging
activities under FASB Statement No. 133, Accounting
for Derivative Instruments and Hedging Activities. This
statement requires that contracts with comparable
characteristics be accounted for similarly. In particular, this
statement clarifies under what circumstances a contract with an
initial net investment meets the characteristic of a derivative,
clarifies when a derivative contains a financing component,
amends the definition of an underlying hedged risk to conform to
language used in FIN 45 and amends certain other existing
pronouncements. This statement, the provisions of which are to
be applied prospectively, is effective for contracts entered
into or modified after June 30, 2003. The adoption of
FAS 149 did not have a material impact on the
Companys financial condition or results of operations.


Financial Instruments:In May 2003, the FASB issued FASB
Statement of Financial Accounting Standards No. 150
(FAS 150), Accounting for Certain
Financial Instruments with Characteristics of both Liabilities
and Equity. FAS 150 establishes standards for how an
issuer classifies and measures certain financial instruments
with characteristics of both liabilities and equity. The
requirements of this statement apply to issuers
classification and measurement of freestanding financial
instruments, including those that comprise more than one option
or forward contract. This statement does not apply to features
that are embedded in a financial instrument that is not a
derivative in its entirety. This statement also addresses
questions about the classification of certain financial
instruments that embody obligations to issue equity shares. The
adoption of FAS 150 did not have a material impact on the
Companys financial condition or results of operations.

The adoption of the above-mentioned accounting
policies have had no impact on the Companys critical
accounting policies and estimates as disclosed in the
Companys Annual Report on Form 10-K for the year
ended December 28, 2002.

Liquidity and Capital Resources

Cash flows provided by operating activities
increased to $301.6 million in the combined three quarters
ended October 4, 2003 from $208.6 million in the three
quarters ended October 5, 2002. The increase of
approximately $93 million was primarily due to an income
tax payment of approximately $67 million made in the first
half of 2002 related to the gain on the disposition of the
Companys Honduran beverage business in 2001, combined with
higher earnings from ongoing operations. In addition, in the
three quarters ended October 4, 2003, the change in
inventory levels decreased $45.7 million compared from
prior year, as there was a build-up of FRUIT BOWLS® and
FRUIT-N-GEL BOWLS inventory in 2002 to support higher
sales volumes. This was partially offset by the absence of
Pascual and Saman receivable collections in the current year,
which amounted to approximately $21.7 million in three
quarters ended October 5, 2002.

Cash flows used in investing activities increased
to $1.55 billion in the combined three quarters ended
October 4, 2003 from $133.1 million in the three
quarters ended October 5, 2002. The increase is primarily
due to cash used in the going-private merger transaction and
lower proceeds from the sale of businesses compared to prior
year. This use of cash was partially offset by significantly
lower capital expenditures and higher proceeds from the sale of
assets, including $36 million from the sale of two
corporate aircraft.

Cash flows from financing activities increased to
$659.9 million in the combined three quarters ended
October 4, 2003 from $242.7 million in the three
quarters ended October 5, 2002. The increase is primarily
due to the issuance of additional debt and an equity
contribution of $125 million to finance the going-private
merger transaction.

The Company uses net debt (total debt less cash)
as a supplementary measure of leverage. Net debt is not defined
under GAAP and should not be considered in isolation as an
indicator of leverage. Additionally, the Companys
calculation of net debt may not be comparable to other similarly
titled measures computed by other companies. During the first
three quarters of 2003, net debt (derived by subtracting cash of
$67.1 million from total debt of $1.78 billion)
increased by approximately $1.235 billion to
$1.713 billion. The increase during the first three
quarters of 2003 was primarily due to the use of cash on hand of
approximately $636 million and new debt issued of
approximately $1.81 billion in connection with the
going-private merger and refinancing transactions, as well as
the consolidation of approximately $54.9 million in debt
under the

40



---



##### Table of Contents



Companys corporate headquarters financing
facility arrangement as a result of the adoption of FIN 46. This
increase was partially offset by the repayment of approximately
$949.4 million of pre-existing and new debt, also in
connection with the going-private merger and refinancing
transactions and positive cash flows from operations. Refer to
the discussion of the going-private merger transaction for
further details of debt issued and repaid in the going-private
merger and refinancing transactions. The Companys net debt
to net debt and equity percentage increased to 79% at
October 4, 2003 from 39% at the end of 2002.


As of October 4, 2003, the Company had
outstanding balances under its new senior secured credit
facilities of approximately $287.6 million, consisting of
$272.6 million of term loans and $15 million
outstanding under revolving credit facilities. At
October 4, 2003, the Company had approximately
$245.7 million available under the $300 million
revolving credit portion of the senior secured credit
facilities. Provisions under the senior secured credit
facilities and the indentures to the Companys senior notes
and debentures require the Company to comply with certain
financial covenants. These covenants include financial
performance measures, such as minimum required interest coverage
ratios, minimum fixed charge coverage ratios, minimum quarterly
earnings and maximum permitted leverage ratios, as well as
limitations on, among other things, indebtedness, capital
expenditures, investments, loans to subsidiaries, employees and
third parties, the issuance of guarantees and the payment of
dividends. At October 4, 2003, the Company was in
compliance with all applicable covenants.

In connection with the consummation of the
going-private merger transaction the Companys
$400 million, 5-year credit facility, was cancelled.

The Company believes that its existing cash
balances, cash flow from operations and available borrowings
under the revolving credit portion of the new senior secured
credit facility will enable it to meet its working capital,
capital expenditure, revolving and term debt maturity and other
funding requirements. Factors impacting the Companys cash
flow from operations include such items as commodity prices,
interest rates and foreign currency exchange rates, among other
things, as set forth in the Companys Form 10-K for
the fiscal year ended December 28, 2002 and in subsequent
SEC filings, and as set forth in Item 3 below.

The Company distributes its products in more than
90 countries throughout the world. Some of the
Companys costs are incurred in currencies different from
those received from the sale of products. Its international
sales are mainly transacted in U.S. dollars, and euro,
Swedish krona and Japanese yen currencies. Since the Company
transacts business throughout the world, it is subject to risks
associated with fluctuations in foreign currency exchange rates,
primarily the euro, the Swedish krona and the Japanese yen.
During the first three quarters of 2003, these three currencies
strengthened against the U.S. dollar relative to the prior
year, resulting in higher revenues for the quarter and three
quarters ended October 4, 2003. The ultimate impact of
future changes to these and other currency exchange rates in
2003 is not determinable at this time.

Supplemental Financial Information

The following financial information has been
presented, as management believes that it is useful information
to some readers of the Companys consolidated financial
statements (in thousands):

|                                                                    |  |            |           |              |  |   |           | 
|------------------------------------------------------------------- |  | ---------- | --------- | ------------ |  | - | --------- | 
|                                                                    |  | October 4, |           | December 28,
|                                                                    |  | 2003       |           | 2002        
|                                                                    |  |            |           |             
|                                                                    |  | Successor  |           | Predecessor 
|                                                                    |  |            |           |             
|Balance Sheet Data:                                                 |  |            |           |              |  |   |           | 
|Total working capital (current assets less
    current liabilities) |  | $          | 341,528   |              |  | $ | 715,455   | 
|Total assets                                                        |  | $          | 3,892,318 |              |  | $ | 3,036,852 | 
|Total debt                                                          |  | $          | 1,780,256 |              |  | $ | 1,124,894 | 
|Total shareholders equity                                          |  | $          | 440,935   |              |  | $ | 745,111   | 

41



---



##### Table of Contents



|                              |  |               |         |             |  |   |        |  
|----------------------------- |  | ------------- | ------- | ----------- |  | - | ------ | -
|                              |  |              
|                              |  | Quarter Ended
|                              |  |              
|                              |  | October 4,    |         | October 5, 
|                              |  | 2003          |         | 2002       
|                              |  |               |         |            
|                              |  | Successor     |         | Predecessor
|(in thousands)                |  |               |         |            
|Other Financial Data:         |  |               |         |             |  |   |        |  
|Net income                    |  | $             | 7,530   |             |  | $ | 14,650 |  
|Interest expense              |  |               | 48,993  |             |  |   | 26,802 |  
|Income taxes                  |  |               | 1,539   |             |  |   | 5,699  |  
|Depreciation and amortization |  |               | 42,526  |             |  |   | 33,712 |  
|                              |  |               |         |             |  |   |        |  
|EBITDA                        |  | $             | 100,588 |             |  | $ | 80,863 |  
|EBITDA margin                 |  |               | 7.4     | %           |  |   | 6.4    | %
|Capital expenditures          |  | $             | 16,304  |             |  | $ | 27,507 |  

|                              |  |                  |         |               |  |                  |         |                  |  |   |         |   |  |   |         |  
|----------------------------- |  | ---------------- | ------- | ------------- |  | ---------------- | ------- | ---------------- |  | - | ------- | - |  | - | ------- | -
|                              |  | Two Quarters     |         | Quarter Ended |  | Three Quarters   |         | Three Quarters  
|                              |  | Ended October 4, |         | March 22,     |  | Ended October 4, |         | Ended October 5,
|                              |  | 2003             |         | 2003          |  | 2003             |         | 2002            
|                              |  |                  |         |               |  |                  |         |                 
|                              |  | Successor        |         | Predecessor   |  | Combined         |         | Predecessor     
|                              |  |                  |         |               |  |                  |         |                 
|Other Financial Data:         |  |                  |         |               |  |                  |         |                  |  |   |         |   |  |   |         |  
|Net income                    |  | $                | 25,431  |               |  | $                | 60,788  |                  |  | $ | 86,219  |   |  | $ | 17,860  |  
|Interest expense              |  |                  | 86,772  |               |  |                  | 19,647  |                  |  |   | 106,419 |   |  |   | 60,799  |  
|Income taxes                  |  |                  | 5,363   |               |  |                  | 13,100  |                  |  |   | 18,463  |   |  |   | 53,581  |  
|Depreciation and amortization |  |                  | 73,794  |               |  |                  | 25,051  |                  |  |   | 98,845  |   |  |   | 81,037  |  
|                              |  |                  |         |               |  |                  |         |                  |  |   |         |   |  |   |         |  
|EBITDA                        |  | $                | 191,360 |               |  | $                | 118,586 |                  |  | $ | 309,946 |   |  | $ | 213,277 |  
|EBITDA margin                 |  |                  | 7.4     | %             |  |                  | 11.1    | %                |  |   | 8.5     | % |  |   | 6.2     | %
|Capital expenditures          |  | $                | 62,668  |               |  | $                | 3,827   |                  |  | $ | 66,495  |   |  | $ | 183,521 |  

EBITDA is defined as earnings before
interest expense, income taxes, and depreciation and
amortization. EBITDA margin is defined as the ratio of EBITDA,
as defined, relative to net revenues. EBITDA is reconciled to
net income in the condensed consolidated financial statements in
the tables above. EBITDA and EBITDA margin fluctuated
primarily due to the same factors that impacted the changes in
operating income and segment EBIT discussed earlier, as well as
the impact of a charge related to a cumulative effect of a
change in accounting principle in the first quarter of 2002 of
$119.9 million.

The Company presents EBITDA and EBITDA margin
because management believes, similar to EBIT, EBITDA is a useful
performance measure for the Company. In addition, EBITDA is
presented because management believes it is frequently used by
securities analysts, investors and others in the evaluation of
companies, and because certain debt covenants on the
Companys recently issued Senior Notes are tied to EBITDA.
EBITDA and EBITDA margin should not be considered in isolation
from or as a substitute for net income, cash flows from
operating activities and other consolidated income or cash flow
statement data prepared in accordance with GAAP or as a measure
of profitability or liquidity. Additionally, the Companys
computation of EBITDA and EBITDA margin may not be comparable to
other similarly titled measures computed by other companies,
because all companies do not calculate EBITDA and EBITDA margin
in the same manner.

As noted in the Results of Operations
discussion, the push-down of purchase accounting to the Company
and the substantial increase in debt as a result of the
going-private merger and refinancing transactions, have had a
significant impact on the Companys results of operations
in the quarter and combined three quarters ended October 4,
2003 in comparison to the Predecessor results for the quarter
and three quarters ended October 5, 2002. EBITDA, as
presented, of $100.6 million and $309.9 million was
negatively impacted by purchase accounting related and
going-private merger and refinancing expenses of
$16.5 million and $76.2 million for the quarter and
combined three quarters ended October 4, 2003. These items
also negatively impacted EBITDA margin by 1.2 percentage
points and 2.1 percentage points, respectively. The impact
of

42



---



##### Table of Contents



these items on EBITDA for the quarter and three
quarters ended October 4, 2003 includes approximately
$11.8 million and $50.4 million, respectively, of
purchase accounting step-up of inventory, purchase accounting
losses of $5.5 million related to the sale of property,
plant and equipment, a benefit of $6.1 million due to the
settlement of foreign currency related items and
$5.3 million and $26.4 million, respectively of
going-private merger transaction related expenses.


Other Matters

Financial Instruments:The Companys foreign currency
exchange forward contracts are denominated in Japanese yen and
euro and are designated as hedges under Statement of Financial
Accounting Standards No. 133 (FAS 133),
Accounting for Derivative Instruments and Hedging
Activities. At October 4, 2003, the outstanding
notional amount of the Companys euro and Japanese yen
foreign currency exchange forwards totaled $239.4 million.

During the quarter ended October 4, 2003,
the Company entered into short-term fuel hedges to partially
mitigate the Companys exposure to significant bunker fuel
fluctuations. These contracts have been designated as hedges
under FAS 133. At October 4, 2003, the outstanding notional
amount of the Companys fuel hedges was approximately
$0.8 million.

This filing contains forward-looking
statements within the meaning of the Private Securities
Litigation Reform Act of 1995 that involve a number of risks and
uncertainties. Forward looking statements, which are based on
managements current expectations, are generally
identifiable by the use of terms such as may,
anticipate, will, expect,
believe, or similar expressions. The potential risks
and uncertainties that could cause the Companys actual
results to differ materially from those expressed or implied
herein include weather-related phenomena; market responses to
industry volume pressures; product and raw materials supplies
and pricing; electrical power supply and pricing; changes in
interest and currency exchange rates; economic crises and
security risks in developing countries; quotas, tariffs and
other governmental actions and international conflicts.

43



---



##### Table of Contents






ITEM
3.     QUANTITATIVE AND
QUALITATIVE

DISCLOSURES ABOUT MARKET RISK


In the quarter and three quarters ended
October 4, 2003, except for the impact of the going-private
merger and refinancing transactions discussed below, no material
changes have occurred in the market risk disclosure presented in
the Companys Annual Report on Form 10-K for the year
ended December 28, 2002.

On March 28, 2003, the Company completed the
going-private merger transaction described in Note 3 to the
Condensed Consolidated Financial Statements. As a result, the
Company issued additional debt in the form of senior debt
securities and variable-rate term loans and revolving credit
facilities, called for the redemption of its 7% Notes due 2003,
redeemed its 6.375% Senior Notes due 2005 and modified the
terms, including the interest rates, of its Senior Notes due
2009 and Debentures due 2013. In addition, the Company purchased
shipping containers that were previously under both capital and
operating leases. The purchase eliminated the Companys
obligations under these variable-rate capital and variable-rate
operating leases. In connection with the going-private merger
transaction, the Company entered into a sale-leaseback of an
aircraft and modified the interest rate on its corporate
headquarters financing facility. On May 29, 2003, the
Company completed the refinancing transaction pursuant to which,
the Company issued $400 million aggregate principal amount
of 7.25% Senior Notes due 2010 and prepaid $400 million of
the term loans under the senior secured credit facility.

The new debt, debt modifications and partial
repayment of senior notes, term loans and lease obligations
substantially change the Companys exposure to interest
rate fluctuations. After giving effect to the above-mentioned
changes, the Company estimates that a 100 basis point
change in the LIBOR rate would impact its annual pretax income
by approximately $4.3 million. The Company estimates that a
100 basis point change in prevailing interest rates would impact
the fair value of its fixed-rate debt by approximately
$70 million.

At October 4, 2003, the Company had
$1.43 billion of fixed-rate arrangements, including
$0.7 million of short-term notes, with a weighted-average
interest rate of 8.34% and $430.8 million of variable-rate
arrangements, including $3 million of short-term notes and
$85 million principal under variable-rate operating leases,
with a weighted-average interest rate of 4.68%.




ITEM 4.     CONTROLS
AND PROCEDURES

Doles management, with the participation of
our Chairman and Chief Executive Officer and our Senior Vice
President and Chief Financial Officer, evaluated the
effectiveness of Doles disclosure controls and procedures
(as defined in Rule 15d-15(e) under the Securities Exchange
Act of 1934, as amended) as of the end of the period covered by
this report. Based on that evaluation, our Chairman and Chief
Executive Officer and our Senior Vice President and Chief
Financial Officer concluded that Doles disclosure controls
and procedures are effective. There has been no change in
Doles internal control over financial reporting during the
fiscal quarter ended October 4, 2003 that has materially
affected, or is reasonably likely to materially affect,
Doles internal control over financial reporting.




PART II.

OTHER INFORMATION


DOLE FOOD COMPANY, INC.







|        |                  
|------- | -----------------
|Item 1. | Legal Proceedings

The Company is involved from time to time in
claims and legal actions incidental to its operations, both as
plaintiff and defendant. The Company has established what
management currently believes to be adequate reserves for
pending legal matters. These reserves are established as part of
an ongoing worldwide assessment of claims and legal actions that
takes into consideration such items as changes in the pending
case load (including resolved and new matters), opinions of
legal counsel, individual developments in court proceedings,
changes in the law, changes in business focus, changes in the
litigation environment, changes in opponent strategy and
tactics, new developments as a result of ongoing discovery, and
past experience in defending and

44



---



##### Table of Contents



settling similar claims. In the opinion of
management, after consultation with outside counsel, the claims
or actions to which the Company is a party are not expected to
have a material adverse effect, individually or in the
aggregate, on the Companys financial condition or results
of operations.


A significant portion of the Companys legal
exposure relates to lawsuits pending in the United States and in
several foreign countries, alleging injury as a result of
exposure to the agricultural chemical DBCP
(1,2-dibromo-3-chloropropane). DBCP was manufactured by several
chemical companies including Dow and Shell and registered by the
U.S. government for use on food crops. The Company and
other growers applied DBCP on banana farms in Latin America and
the Philippines and on pineapple farms in Hawaii. Specific
periods of use varied among the different locations. The Company
halted all purchases of DBCP, including for use in foreign
countries, when the U.S. EPA cancelled the registration of
DBCP for use in the United States in 1979. That cancellation was
based in part on the apparent link between male sterility and
exposure to DBCP among factory workers producing the product in
1977, as well as early product testing done by the manufacturers
showing testicular effects on animals exposed to DBCP. To date,
there is no reliable evidence demonstrating that field
application of DBCP led to sterility among farm workers,
although that claim is made in the pending lawsuits. Nor is
there any reliable scientific evidence that DBCP causes any
other injuries in humans, although plaintiffs in the various
actions assert claims based on cancer, birth defects and other
general illnesses.

Currently there are 799 lawsuits, in various
stages of proceedings, alleging injury as a result of exposure
to DBCP. Eleven of these lawsuits are currently pending in
various jurisdictions in the United States, with the remainder
pending in Latin America and the Philippines. In the United
States, plaintiffs recently moved to re-open and remand to state
court two previously dismissed cases pursuant to the United
States Supreme Courts decision in Dole Food Company,
Inc. v. Patrickson. Plaintiffs have also remanded five
other cases to state courts in Texas and Louisiana as a result
of the Patrickson decision. Claimed damages total approximately
$21.2 billion, with the lawsuits in Nicaragua representing
approximately 81% of this amount. In almost all of these cases,
the Company is a joint defendant with the major DBCP
manufacturers and, typically, other banana growers. To date,
none of these lawsuits has resulted in a verdict or judgment
against the Company. However, as described below, a judgment has
been rendered in a DBCP case in Nicaragua.

In Nicaragua, the Company has been served in 46
of 313 pending cases, with the majority of the lawsuits
brought pursuant to Law 364, an October 2000 Nicaraguan
statute that contains substantive and procedural provisions that
Nicaraguas Attorney General formally opined are
unconstitutional. In October 2003, the Supreme Court of
Nicaragua issued an advisory opinion, not connected with any
litigation, that Law 364 is constitutional.

Fourteen of the 46 cases are being actively
litigated in civil trial courts in Managua and Chinendega. In
all of those actions, the Company has asked to have the cases
returned to the United States pursuant to a provision of
Law 364. The Chinendega civil trial court has granted the
Companys request and ordered that the Company submit
unconditionally to the jurisdiction of the courts of the United
States for trial of the plaintiffs claims. Pursuant to the
courts order, Plaintiffs would have to file a new action
in the United States. Plaintiffs have sought reconsideration of
that order.

Nine of the 46 cases served were
consolidated into one case before a civil trial court in
Managua, with the plaintiffs naming an entity denominated as
Dole Food Corporation Inc. as a defendant. The
Company is aware of no legal entity bearing that name, and the
Company is certain that no such legal entity is related to the
Company. As a result, the Company responded in these nine
consolidated cases on behalf of Dole Fresh Fruit Company, a
subsidiary of the Company, which has been named as a defendant
in other pending DBCP matters, including matters brought by
Nicaraguan citizens. The Company paid a $100,000 non-refundable
deposit to the Nicaraguan court, as required under Law 364,
to participate in the litigation. On October 25, 2002, the
civil trial court in Managua issued a ruling that Dole Fresh
Fruit Company was not a party to the nine consolidated cases.
Thereafter, counsel for Dole Fresh Fruit Company notified the
court that no legal entity known as Dole Food Corporation
Inc. exists and sought to appear on behalf of Dole Food
Company, Inc. and to ratify all prior pleadings of Dole Fresh
Fruit Company. On November 25, 2002, the civil trial court
issued a ruling that Dole Food Company, Inc. is not a defendant
in the nine consolidated cases.

45



---



##### Table of Contents



On December 13, 2002, the Nicaraguan civil
trial court entered a judgment in the aggregate amount of
$489.4 million on behalf of 468 plaintiffs against Dow
Chemical Company, also known as Dow AgroSciences, Shell Chemical
Company, Standard Fruit and Vegetable Company and Dole
Food Corporation Inc. in the nine consolidated actions.
Because the civil trial court had held that the Company is not a
defendant in the case, the court also ordered that the
Companys $100,000 deposit be returned. Standard Fruit and
Vegetable Company is a Texas corporation that is wholly
unrelated to the Company. On May 14, 2003, an action was
filed in Los Angeles County Superior Court against The Dow
Chemical Company, Shell Chemical Company, and Dole Food Company,
Inc. to enforce the Nicaraguan judgment. On July 18, 2003,
the Company filed a motion to dismiss the enforcement action on
the grounds that Dole Food Company, Inc. was not a party to the
judgment. On July 17, 2003, Dow and Shell filed a motion to
remove the enforcement action to the United States District
Court for the Central District of California. The Company
consented to that removal. On October 20, 2003, the United
States District Court for the Central District of California
dismissed with prejudice the enforcement action as to all of the
defendants, including Dole. The Court held that Dole Food
Company, Inc. was not a party in the Nicaraguan judgment.

The Company believes that the Nicaraguan civil
trial courts judgment will not be enforceable against any
Dole entity in the U.S. or in any other country, because no Dole
entity has been named in the judgment and Nicaraguas
Law 364 is unconstitutional and violates international due
process. Among other things, Law 364 is an improper
special law directed at particular parties, it
requires defendants to pay large, non-refundable deposits in
order to participate in the litigation, it provides a severely
truncated procedural process, it establishes irrebutable
presumptions of causation that are contrary to the evidence and
scientific data, and it sets unreasonable minimum damages that
must be awarded. In addition, although the Company sought to
participate in the case, the Nicaraguan civil trial court ruled
that the Company would not be heard and that the Companys
legal motions and papers would not be considered. Finally, as
previously noted, the civil trial court ruled that neither Dole
Food Company, Inc. nor Dole Fresh Fruit Company is a defendant
in the case. For these reasons, the Company does not believe a
U.S. court or that of any other nation would enforce this
judgment.

As to all the DBCP matters, the Company has
denied liability and asserted substantial defenses. Although no
assurance can be given concerning the outcome of these cases, in
the opinion of management, after consultation with legal counsel
and based on past experience defending and settling DBCP claims,
the pending lawsuits are not expected to have a material adverse
effect on the Companys financial condition or results of
operations.






|        |                                     
|------- | ------------------------------------
|Item 6. | Exhibits and Reports on
    Form 8-K

(a) Exhibits:

|        |       |  |  |                                                                                                                                  
|------- | ----- |  |  | ---------------------------------------------------------------------------------------------------------------------------------
|Exhibit |       | 
|Number  |       | 
|        |       | 
|        | 31.1* |  |  | Certification by the Chairman and Chief Executive
    Officer pursuant to Section 302 of the Sarbanes-Oxley Act.                 
|        | 31.2* |  |  | Certification by the Senior Vice President and
    Chief Financial Officer pursuant to Section 302 of the
    Sarbanes-Oxley Act.
|        | 32.1 |  |  | Certification by the Chairman and Chief Executive
    Officer pursuant to Section 906 of the Sarbanes-Oxley Act.                 
|        | 32.2 |  |  | Certification by the Senior Vice President and
    Chief Financial Officer pursuant to Section 906 of the
    Sarbanes-Oxley Act.



---



|  |               
|- | --------------
|* | Filed herewith



|  |                   
|- | ------------------
| | Furnished herewith



|    |                     
|--- | --------------------
|(b) | Reports on Form 8-K:



| |                                                                                
| | -------------------------------------------------------------------------------
| | No reports on Form 8-K were filed during the
    quarter ended October 4, 2003.

46



---



##### Table of Contents






SIGNATURES

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

|                  |  |                                                                                                                               
|----------------- |  | ------------------------------------------------------------------------------------------------------------------------------
|November 18, 2003 |  | DOLE FOOD COMPANY, INC.
    REGISTRANT                                                                                        
|                 
|                  |  | By: /s/ RICHARD J. DAHLRichard J. DahlSenior Vice President and
    Chief Financial Officer                                   
|                 
|                  |  | By: /s/ YOON J. HUGHYoon J. HughVice President, Controller and
    Chief Accounting Officer
    (Principal Accounting Officer)

47



---



##### Table of Contents






EXHIBIT INDEX

|        |       |  |  |                                                                                                                                  
|------- | ----- |  |  | ---------------------------------------------------------------------------------------------------------------------------------
|Exhibit |       | 
|Number  |       | 
|        |       | 
|        | 31.1* |  |  | Certification by the Chairman and Chief Executive
    Officer pursuant to Section 302 of the Sarbanes-Oxley Act.                 
|        | 31.2* |  |  | Certification by the Senior Vice President and
    Chief Financial Officer pursuant to Section 302 of the
    Sarbanes-Oxley Act.
|        | 32.1 |  |  | Certification by the Chairman and Chief Executive
    Officer pursuant to Section 906 of the Sarbanes-Oxley Act.                 
|        | 32.2 |  |  | Certification by the Senior Vice President and
    Chief Financial Officer pursuant to Section 906 of the
    Sarbanes-Oxley Act.



---



|  |               
|- | --------------
|* | Filed herewith



|  |                   
|- | ------------------
| | Furnished herewith

48