##### Table of Contents









UNITED STATES SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549


Form 10-Q


For Annual and Transition Reports Pursuant to
Sections 13 or 15(d)


of the Securities Exchange Act of 1934


|                                              |     |  |  |                                                                                             
|--------------------------------------------- | --- |  |  | --------------------------------------------------------------------------------------------
|(Mark One)                                    |     |  | 
|                                              | [X] |  |  | Quarterly report pursuant to Section 13 or 15(d) of the
    Securities Exchange Act of 1934 
|For the Quarterly Period Ended March 31, 2005
|                                             
|or                                           
|                                             
|                                              | [ ] |  |  | Transition report pursuant to Section 13 or 15(d) of the
    Securities Exchange Act of 1934
|Commission File Number 1-08262               

Dean Holding Company







|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Delaware                                                       |  | 75-2932967                          
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)

2515 McKinney Avenue, Suite 1200


Dallas, Texas 75201


(214) 303-3400






þ o


o þ












---










Table of Contents


|                                             |                                                                                                        |      |  |    | 
|-------------------------------------------- | ------------------------------------------------------------------------------------------------------ | ---- |  | -- | 
|                                             |                                                                                                        | Page | 
|                                             |                                                                                                        |      | 
|Part I  Financial
    Information           |                                                                                                        |      |  |   
|                                             | Item 1  Financial
    Statements                                                                      |      |  | 3  | 
|                                             | Item 2  Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations |      |  | 15 | 
|                                             | Item 4  Controls and
    Procedures                                                                   |      |  | 18 | 
|Part II  Other
    Information              |                                                                                                        |      |  |   
|                                             | Item 6  Exhibits and
    Reports on Form 8-K                                                          |      |  | 21 | 
|Certification of CEO Pursuant to Section 302
|Certification of CFO Pursuant to Section 302
|Certification of CEO Pursuant to Section 906
|Certification of CFO Pursuant to Section 906



-2-



---



##### Table of Contents






Part I  Financial Information







|        |                     
|------- | --------------------
|Item 1. | Financial Statements

DEAN HOLDING COMPANY


CONDENSED CONSOLIDATED BALANCE SHEETS




|                                         |                                                                                                                                       |                            |           |           |              |  |           |           |           | 
|---------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------- | -------------------------- | --------- | --------- | ------------ |  | --------- | --------- | --------- | 
|                                         |                                                                                                                                       | March 31,                  |           |           | December 31, | 
|                                         |                                                                                                                                       | 2005                       |           |           | 2004         | 
|                                         |                                                                                                                                       |                            |           |           |              | 
|                                         |                                                                                                                                       | (unaudited)                |           |           |             
|ASSETS                                   |                                                                                                                                       |                            |           |           |              |  |           |          
|Current assets:                          |                                                                                                                                       |                            |           |           |              |  |           |          
|                                         | Cash and cash equivalents                                                                                                             |                            | $         | 7,332     |              |  | $         | 12,655    |          
|                                         | Receivables, net                                                                                                                      |                            |           | 293,011   |              |  |           | 294,188   |          
|                                         | Inventories                                                                                                                           |                            |           | 212,357   |              |  |           | 215,392   |          
|                                         | Deferred income taxes                                                                                                                 |                            |           | 56,991    |              |  |           | 55,331    |          
|                                         | Prepaid expenses and other current assets                                                                                             |                            |           | 19,203    |              |  |           | 23,276    |          
|                                         |                                                                                                                                       |                            |           |           |              | 
|                                         |                                                                                                                                       | Total current assets       |           |           | 588,894      |  |           |           | 600,842   | 
|Property, plant and equipment            |                                                                                                                                       |                            | 633,939   |           |              |  | 635,787   |          
|Goodwill                                 |                                                                                                                                       |                            | 1,425,252 |           |              |  | 1,425,248 |          
|Identifiable intangible and other assets |                                                                                                                                       |                            | 225,951   |           |              |  | 226,796   |          
|                                         |                                                                                                                                       |                            |           |           |              | 
|                                         |                                                                                                                                       | Total                      |           | $         | 2,874,036    |  |           | $         | 2,888,673 | 
|                                         |                                                                                                                                       |                            |           |           |              | 
|                                        
|LIABILITIES AND STOCKHOLDERS EQUITY     |                                                                                                                                       |                            |           |           |              |  |           |          
|Current liabilities:                     |                                                                                                                                       |                            |           |           |              |  |           |          
|                                         | Accounts payable and accrued expenses                                                                                                 |                            | $         | 352,018   |              |  | $         | 344,721   |          
|                                         | Income taxes payable                                                                                                                  |                            |           | 4,961     |              |  |           | 4,897     |          
|                                         | Current portion of long-term debt                                                                                                     |                            |           | 99,896    |              |  |           | 99,550    |          
|                                         |                                                                                                                                       |                            |           |           |              | 
|                                         |                                                                                                                                       | Total current liabilities  |           |           | 456,875      |  |           |           | 449,168   | 
|Long-term debt                           |                                                                                                                                       |                            | 766,377   |           |              |  | 759,999   |          
|Deferred income taxes                    |                                                                                                                                       |                            | 228,945   |           |              |  | 225,907   |          
|Other long-term liabilities              |                                                                                                                                       |                            | 151,589   |           |              |  | 155,246   |          
|Commitments and contingencies (Note 8)   |                                                                                                                                       |                            |           |           |              |  |           |          
|Stockholders equity:                    |                                                                                                                                       |                            |           |           |              |  |           |          
|                                         | Common stock, 1,000 shares issued and outstanding at
    March 31, 2005 and December 31, 2004 with a par value
    of $0.01 per share |                            |           |          |              |  |           |          |          
|                                         | Additional paid-in capital                                                                                                            |                            |           | 1,391,603 |              |  |           | 1,391,603 |          
|                                         | Retained earnings                                                                                                                     |                            |           | 476,163   |              |  |           | 441,889   |          
|                                         | Receivable from parent                                                                                                                |                            |           | (578,723  | )            |  |           | (517,173  | )        
|                                         | Accumulated other comprehensive income (loss)                                                                                         |                            |           | (18,793   | )            |  |           | (17,966   | )        
|                                         |                                                                                                                                       |                            |           |           |              | 
|                                         |                                                                                                                                       | Total stockholders equity |           |           | 1,270,250    |  |           |           | 1,298,353 | 
|                                         |                                                                                                                                       |                            |           |           |              | 
|                                         |                                                                                                                                       | Total                      |           | $         | 2,874,036    |  |           | $         | 2,888,673 | 
|                                         |                                                                                                                                       |                            |           |           |              | 



-3-



---



##### Table of Contents



DEAN HOLDING COMPANY


CONDENSED CONSOLIDATED STATEMENTS OF INCOME




|                              |                                           |                                    |           |         |         |   |         |         |         | 
|----------------------------- | ----------------------------------------- | ---------------------------------- | --------- | ------- | ------- | - | ------- | ------- | ------- | 
|                              |                                           | Three Months Ended                 |          
|                              |                                           | March 31                           |          
|                              |                                           |                                    |          
|                              |                                           | 2005                               |           |         | 2004    |  
|                              |                                           |                                    |           |         |         |  
|                              |                                           | (unaudited)                        |          
|Net sales                     |                                           | $                                  | 1,063,298 |         |         | $ | 993,166 |        
|Cost of sales                 |                                           |                                    | 813,280   |         |         |   | 749,570 |        
|                              |                                           |                                    |           |         |         |  
|Gross profit                  |                                           |                                    | 250,018   |         |         |   | 243,596 |        
|Operating costs and expenses: |                                           |                                    |           |         |         |   |         |        
|                              | Selling and distribution                  |                                    |           | 143,416 |         |   |         | 139,742 |        
|                              | General and administrative                |                                    |           | 34,798  |         |   |         | 34,799  |        
|                              | Amortization expense                      |                                    |           | 734     |         |   |         | 630     |        
|                              | Facility closing and reorganization costs |                                    |           | 2,069   |         |   |         | 2,702   |        
|                              |                                           |                                    |           |         |         |  
|                              |                                           | Total operating costs and expenses |           |         | 181,017 |   |         |         | 177,873 | 
|                              |                                           |                                    |           |         |         |  
|Operating income              |                                           |                                    | 69,001    |         |         |   | 65,723  |        
|Other (income) expense:       |                                           |                                    |           |         |         |   |         |        
|                              | Interest expense, net                     |                                    |           | 13,936  |         |   |         | 13,839  |        
|                              | Other income, net                         |                                    |           | (212    | )       |   |         | (1,967  | )      
|                              |                                           |                                    |           |         |         |  
|                              |                                           | Total other (income) expense       |           |         | 13,724  |   |         |         | 11,872  | 
|                              |                                           |                                    |           |         |         |  
|Income before income taxes    |                                           |                                    | 55,277    |         |         |   | 53,851  |        
|Income taxes                  |                                           |                                    | 21,003    |         |         |   | 20,427  |        
|                              |                                           |                                    |           |         |         |  
|Net income                    |                                           | $                                  | 34,274    |         |         | $ | 33,424  |        
|                              |                                           |                                    |           |         |         |  



-4-



---



##### Table of Contents



DEAN HOLDING COMPANY


CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS




|                                               |                                                                                       |                                                                   |                                                          |                                                     |        |       |         |         |        |         |         |  
|---------------------------------------------- | ------------------------------------------------------------------------------------- | ----------------------------------------------------------------- | -------------------------------------------------------- | --------------------------------------------------- | ------ | ----- | ------- | ------- | ------ | ------- | ------- | -
|                                               |                                                                                       | Three Months                                                      |                                                         
|                                               |                                                                                       | Ended March 31                                                    |                                                         
|                                               |                                                                                       |                                                                   |                                                         
|                                               |                                                                                       | 2005                                                              |                                                          |                                                     | 2004   |      
|                                               |                                                                                       |                                                                   |                                                          |                                                     |        |      
|                                               |                                                                                       | (unaudited)                                                       |                                                         
|Cash Flows From Operating Activities           |                                                                                       |                                                                   |                                                          |                                                     |        |       |         |        
|                                               | Net Income                                                                            |                                                                   | $                                                        | 34,274                                              |        |       | $       | 33,424  |       
|                                               | Adjustments to reconcile net income to net cash provided by
    operating activities: |                                                                   |                                                          |                                                     |        |       |         |         |       
|                                               |                                                                                       | Depreciation and amortization                                     |                                                          |                                                     | 21,971 |       |         |         | 20,653 |        
|                                               |                                                                                       | Loss (gain) on disposition of assets                              |                                                          |                                                     | 354    |       |         |         | (1,733 | )      
|                                               |                                                                                       | Write-down of impaired assets                                     |                                                          |                                                     |       |       |         |         | 408    |        
|                                               |                                                                                       | Deferred income taxes                                             |                                                          |                                                     | 1,896  |       |         |         | 775    |        
|                                               |                                                                                       | Other, net                                                        |                                                          |                                                     | 366    |       |         |         | 962    |        
|                                               |                                                                                       | Changes in operating assets and liabilities, net of acquisitions: |                                                          |                                                     |        |       |         |         |        |        
|                                               |                                                                                       |                                                                   | Accounts receivable                                      |                                                     |        | 1,177 |         |         |        | 7,367   |        
|                                               |                                                                                       |                                                                   | Inventories                                              |                                                     |        | 3,035 |         |         |        | (1,584  | )      
|                                               |                                                                                       |                                                                   | Prepaid expenses and other assets                        |                                                     |        | 2,966 |         |         |        | (2,342  | )      
|                                               |                                                                                       |                                                                   | Accounts payable, accrued expenses and other liabilities |                                                     |        | 2,277 |         |         |        | (18,380 | )      
|                                               |                                                                                       |                                                                   | Income taxes                                             |                                                     |        | 64    |         |         |        | (16,541 | )      
|                                               |                                                                                       |                                                                   |                                                          |                                                     |        |      
|                                               |                                                                                       |                                                                   |                                                          | Net cash provided by operating activities           |        |       | 68,380  |         |        |         | 23,009  |  
|Cash Flows From Investing Activities           |                                                                                       |                                                                   |                                                          |                                                     |        |       |         |        
|                                               | Net additions to property, plant and equipment                                        |                                                                   |                                                          | (11,791                                             | )      |       |         | (16,308 | )     
|                                               | Cash outflows for acquisitions                                                        |                                                                   |                                                          |                                                    |        |       |         | (25,068 | )     
|                                               | Proceeds from sale of fixed assets                                                    |                                                                   |                                                          | 141                                                 |        |       |         | 1,985   |       
|                                               |                                                                                       |                                                                   |                                                          |                                                     |        |      
|                                               |                                                                                       |                                                                   |                                                          | Net cash used in investing activities               |        |       | (11,650 | )       |        |         | (39,391 | )
|Cash Flows From Financing Activities           |                                                                                       |                                                                   |                                                          |                                                     |        |       |         |        
|                                               | Proceeds from issuance of debt                                                        |                                                                   |                                                          | 5,663                                               |        |       |         | 65,404  |       
|                                               | Repayment of debt                                                                     |                                                                   |                                                          |                                                    |        |       |         | (3,500  | )     
|                                               | Additional investment from parent                                                     |                                                                   |                                                          |                                                    |        |       |         | 21,522  |       
|                                               | Distribution to parent                                                                |                                                                   |                                                          | (67,716                                             | )      |       |         | (79,545 | )     
|                                               |                                                                                       |                                                                   |                                                          |                                                     |        |      
|                                               |                                                                                       |                                                                   |                                                          | Net cash (used in) provided by financing activities |        |       | (62,053 | )       |        |         | 3,881   |  
|                                               |                                                                                       |                                                                   |                                                          |                                                     |        |      
|Decrease in cash and cash equivalents          |                                                                                       |                                                                   | (5,323                                                   | )                                                   |        |       | (12,501 | )      
|Cash and cash equivalents, beginning of period |                                                                                       |                                                                   | 12,655                                                   |                                                     |        |       | 23,963  |        
|                                               |                                                                                       |                                                                   |                                                          |                                                     |        |      
|Cash and cash equivalents, end of period       |                                                                                       | $                                                                 | 7,332                                                    |                                                     |        | $     | 11,462  |        
|                                               |                                                                                       |                                                                   |                                                          |                                                     |        |      



-5-



---



##### Table of Contents



DEAN HOLDING COMPANY


NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


March 31, 2005






|   |        
|-- | -------
|1. | General

Basis of Presentation






Shipping and Handling Fees


Stock-Based Compensation


Recently Issued Accounting Pronouncements


-6-



---



##### Table of Contents



DEAN HOLDING COMPANY


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)










|   |            
|-- | -----------
|2. | Inventories

|                           |       |                |         |         |              |   |         |         | 
|-------------------------- | ----- | -------------- | ------- | ------- | ------------ | - | ------- | ------- | 
|                           |       | March 31,      |         |         | December 31, |  
|                           |       | 2005           |         |         | 2004         |  
|                           |       |                |         |         |              |  
|                           |       | (In thousands) |        
|Raw materials and supplies |       | $              | 66,892  |         |              | $ | 66,604  |        
|Finished goods             |       |                | 145,465 |         |              |   | 148,788 |        
|                           |       |                |         |         |              |  
|                           | Total |                | $       | 212,357 |              |   | $       | 215,392 | 
|                           |       |                |         |         |              |  





|   |                  
|-- | -----------------
|3. | Intangible Assets



|                                  |  |                |           |           |       |   |         |       |  |   |           | 
|--------------------------------- |  | -------------- | --------- | --------- | ----- | - | ------- | ----- |  | - | --------- | 
|                                  |  |                |           | Specialty |       |   |        
|                                  |  | Dairy          |           |           | Foods |   |         |      
|                                  |  | Group          |           |           | Group |   |         | Total | 
|                                  |  |                |           |           |       |   |         |       | 
|                                  |  | (In thousands) |          
|Balance at December 31, 2004      |  | $              | 1,118,775 |           |       | $ | 306,473 |       |  | $ | 1,425,248 | 
|Purchasing accounting adjustments |  |                | 4         |           |       |   |        |       |  |   | 4         | 
|                                  |  |                |           |           |       |   |         |       | 
|Balance at March 31, 2005         |  | $              | 1,118,779 |           |       | $ | 306,473 |       |  | $ | 1,425,252 | 
|                                  |  |                |           |           |       |   |         |       | 

-7-



---



##### Table of Contents



DEAN HOLDING COMPANY


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                         |                  |                |         |         |                   |   |         |          |   |       |          |         |  |              |         |         |          |   |        |        |   |   |         |         | 
|---------------------------------------- | ---------------- | -------------- | ------- | ------- | ----------------- | - | ------- | -------- | - | ----- | -------- | ------- |  | ------------ | ------- | ------- | -------- | - | ------ | ------ | - | - | ------- | ------- | 
|                                         |                  | March 31, 2005 |         |         | December 31, 2004 |  
|                                         |                  |                |         |         |                   |  
|                                         |                  | Gross          |         |         |                   |   | Net     |          |   | Gross |          |         |  |              | Net     |        
|                                         |                  | Carrying       |         |         | Accumulated       |   |         | Carrying |   |       | Carrying |         |  | Accumulated  |         |         | Carrying |  
|                                         |                  | Amount         |         |         | Amortization      |   |         | Amount   |   |       | Amount   |         |  | Amortization |         |         | Amount   |  
|                                         |                  |                |         |         |                   |   |         |          |   |       |          |         |  |              |         |         |          |  
|                                         |                  | (In thousands) |        
|Intangible assets with indefinite lives: |                  |                |         |         |                   |   |         |          |   |       |          |         |  |              |         |         |          |   |        |        |   |   |         |        
|                                         | Trademarks       |                | $       | 190,010 |                   |   | $       |         |   |       | $        | 190,010 |  |              | $       | 190,010 |          |   | $      |       |   |   | $       | 190,010 | 
|Intangible assets with finite lives:     |                  |                |         |         |                   |   |         |          |   |       |          |         |  |              |         |         |          |   |        |        |   |   |         |        
|                                         | Customer-related |                |         | 31,764  |                   |   |         | (10,847  | ) |       |          | 20,917  |  |              |         | 31,764  |          |   |        | (9,932 | ) |   |         | 21,832  | 
|                                         |                  |                |         |         |                   |   |         |          |   |       |          |         |  |              |         |         |          |  
|Total                                    |                  | $              | 221,774 |         |                   | $ | (10,847 | )        |   | $     | 210,927  |         |  | $            | 221,774 |         |          | $ | (9,932 | )      |   | $ | 211,842 |        
|                                         |                  |                |         |         |                   |   |         |          |   |       |          |         |  |              |         |         |          |  



|     |  |             
|---- |  | ------------
|2006 |  | $3.6 million
|2007 |  | 3.5 million 
|2008 |  | 3.5 million 
|2009 |  | 3.4 million 
|2010 |  | 3.2 million 



|   |               
|-- | --------------
|4. | Long-Term Debt

|                                           |                      |                        |         |         |                      |  |       |             |  |   |          |         |         |  |       |   |  | 
|------------------------------------------ | -------------------- | ---------------------- | ------- | ------- | -------------------- |  | ----- | ----------- |  | - | -------- | ------- | ------- |  | ----- | - |  | 
|                                           |                      | At March 31, 2005      |         |         | At December 31, 2004 | 
|                                           |                      |                        |         |         |                      | 
|                                           |                      | Amount                 |         |         | Interest             |  |       | Amount      |  |   | Interest |        
|                                           |                      | Outstanding            |         |         | Rate                 |  |       | Outstanding |  |   | Rate     |        
|                                           |                      |                        |         |         |                      |  |       |             |  |   |          |        
|                                           |                      | (Dollars in thousands) |        
|$250 million senior notes maturing in 2007 |                      | $                      | 250,278 |         |                      |  | 8.150 | %           |  | $ | 250,304  |         |         |  | 8.150 | %
|$200 million senior notes maturing in 2009 |                      |                        | 188,485 |         |                      |  | 6.625 |             |  |   | 187,982  |         |         |  | 6.625 |  
|$150 million senior notes maturing in 2017 |                      |                        | 127,344 |         |                      |  | 6.900 |             |  |   | 127,102  |         |         |  | 6.900 |  
|$100 million senior notes maturing in 2005 |                      |                        | 99,650  |         |                      |  | 6.750 |             |  |   | 99,308   |         |         |  | 6.750 |  
|Receivables-backed facility                |                      |                        | 194,901 |         |                      |  | 3.380 |             |  |   | 189,185  |         |         |  | 2.830 |  
|Capital lease obligations and other        |                      |                        | 5,615   |         |                      |  |       |             |  |   | 5,668    |         |         |  |       |  
|                                           |                      |                        |         |         |                      |  |       |             |  |   |          |        
|                                           |                      |                        | 866,273 |         |                      |  |       |             |  |   | 859,549  |         |         |  |       |  
|                                           | Less current portion |                        |         | (99,896 | )                    |  |       |             |  |   |          | (99,550 | )       |  |       |   | 
|                                           |                      |                        |         |         |                      |  |       |             |  |   |          |        
|                                           |                      | Total                  |         | $       | 766,377              |  |       |             |  |   |          | $       | 759,999 |  |       |   |  | 
|                                           |                      |                        |         |         |                      |  |       |             |  |   |          |        

Senior Notes


-8-



---



##### Table of Contents



DEAN HOLDING COMPANY


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Receivables-Backed Facility


Capital Lease Obligations and Other


Letters of Credit




|   |                            
|-- | ---------------------------
|5. | Comprehensive Income (Loss)



|                                                         |  |                |         |   |           |   |        |        |  |   |         |  
|-------------------------------------------------------- |  | -------------- | ------- | - | --------- | - | ------ | ------ |  | - | ------- | -
|                                                         |  | Pre-Tax        |         |   | Tax       |   |        |       
|                                                         |  | Income         |         |   | Benefit   |   |        | Net    | 
|                                                         |  | (Loss)         |         |   | (Expense) |   |        | Amount | 
|                                                         |  |                |         |   |           |   |        |        | 
|                                                         |  | (In thousands) |        
|Accumulated other comprehensive income December 31, 2004 |  | $              | (28,457 | ) |           | $ | 10,491 |        |  | $ | (17,966 | )
|Minimum pension liability adjustment                     |  |                | (1,363  | ) |           |   | 518    |        |  |   | (845    | )
|Cumulative translation adjustment arising during period  |  |                | 18      |   |           |   |       |        |  |   | 18      |  
|                                                         |  |                |         |   |           |   |        |        | 
|Accumulated other comprehensive income, March 31, 2005   |  | $              | (29,802 | ) |           | $ | 11,009 |        |  | $ | (18,793 | )
|                                                         |  |                |         |   |           |   |        |        | 

-9-



---



##### Table of Contents



DEAN HOLDING COMPANY


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|   |                                                
|-- | -----------------------------------------------
|6. | Employee Retirement and Postretirement Benefits

Defined Benefit Plans


|                               |                                |                |       |        |      |   |       |        |  
|------------------------------ | ------------------------------ | -------------- | ----- | ------ | ---- | - | ----- | ------ | -
|                               |                                | Three Months   |      
|                               |                                | Ended March 31 |      
|                               |                                |                |      
|                               |                                | 2005           |       |        | 2004 |  
|                               |                                |                |       |        |      |  
|                               |                                | (In thousands) |      
|Components of net period cost: |                                |                |       |        |      |   |       |       
|                               | Service cost                   |                | $     | 321    |      |   | $     | 282    |  
|                               | Interest cost                  |                |       | 2,656  |      |   |       | 2,724  |  
|                               | Expected return on plan assets |                |       | (1,855 | )    |   |       | (1,699 | )
|Amortizations:                 |                                |                |       |        |      |   |       |       
|                               | Prior service cost             |                |       | 125    |      |   |       | 126    |  
|                               | Unrecognized net loss          |                |       | 136    |      |   |       | 75     |  
|                               | Effect of settlement           |                |       | 225    |      |   |       | 225    |  
|                               |                                |                |       |        |      |  
|Net periodic benefit cost      |                                | $              | 1,608 |        |      | $ | 1,733 |       
|                               |                                |                |       |        |      |  



Postretirement Benefits


|                               |                       |                |     |     |      |   |     |     | 
|------------------------------ | --------------------- | -------------- | --- | --- | ---- | - | --- | --- | 
|                               |                       | Three Months   |    
|                               |                       | Ended March 31 |    
|                               |                       |                |    
|                               |                       | 2005           |     |     | 2004 |  
|                               |                       |                |     |     |      |  
|                               |                       | (In thousands) |    
|Components of net period cost: |                       |                |     |     |      |   |     |    
|                               | Service cost          |                | $   | 260 |      |   | $   | 241 | 
|                               | Interest cost         |                |     | 227 |      |   |     | 232 | 
|Amortizations:                 |                       |                |     |     |      |   |     |    
|                               | Unrecognized net loss |                |     | 68  |      |   |     | 68  | 
|                               |                       |                |     |     |      |  
|Net periodic benefit cost      |                       | $              | 555 |     |      | $ | 541 |    
|                               |                       |                |     |     |      |  





|   |                                          
|-- | -----------------------------------------
|7. | Facility Closing and Reorganization Costs

Facility Closing and Reorganization Costs






| |   |                                                                                                                                                                                                               
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Consolidation of certain administrative functions in the Midwest
    and Southwest regions of our Dairy Group; and                                                                                            
|
| |  | Previously announced plans including closing a Dairy Group
    manufacturing facility in South Gate, California and closing a
    Specialty Foods Group manufacturing facility in Benton Harbor,
    Michigan.



-10-



---



##### Table of Contents



DEAN HOLDING COMPANY


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)








| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Workforce reductions as a result of facility closings, facility
    reorganizations and consolidation of administrative functions;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|
| |  | Shutdown costs, including those costs necessary to prepare
    abandoned facilities for closure;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|
| |  | Costs incurred after shutdown such as lease obligations or
    termination costs, utilities and property taxes; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|
| |  | Write-downs of property, plant and equipment and other assets,
    primarily for asset impairments as a result of facilities that
    are no longer used in operations. The impairments relate
    primarily to owned buildings, land and equipment at the
    facilities, which are written down to their estimated fair value
    and held for sale. The effect of suspending depreciation on the
    buildings and equipment related to the closed facilities was not
    significant. The carrying value of closed facilities at
    March 31, 2005 was approximately $5.5 million. We are
    marketing these properties for sale.





|              |                                  |                |   |       |         |  |   |          |            |  |      |        |   |  |   |       | 
|------------- | -------------------------------- | -------------- | - | ----- | ------- |  | - | -------- | ---------- |  | ---- | ------ | - |  | - | ----- | 
|              |                                  | Accrued        |   |       |         |  |   |          | Accrued    | 
|              |                                  | Charges at     |   |       |         |  |   |          | Charges at | 
|              |                                  | December 31,   |   |       |         |  |   |          | March 31,  | 
|              |                                  | 2004           |   |       | Charges |  |   | Payments |            |  | 2005 |       
|              |                                  |                |   |       |         |  |   |          |            |  |      |       
|              |                                  | (In thousands) |  
|Cash charges: |                                  |                |   |       |         |  |   |          |            |  |      |        |   |  |   |      
|              | Workforce reduction costs        |                | $ | 1,706 |         |  | $ | 1,576    |            |  | $    | (1,569 | ) |  | $ | 1,713 | 
|              | Shutdown costs                   |                |   |      |         |  |   | 123      |            |  |      | (123   | ) |  |   |      | 
|              | Lease obligations after shutdown |                |   | 75    |         |  |   | 121      |            |  |      | (129   | ) |  |   | 67    | 
|              | Other                            |                |   | 5     |         |  |   | 249      |            |  |      | (249   | ) |  |   | 5     | 
|              |                                  |                |   |       |         |  |   |          |            |  |      |       
|              | Total                            |                | $ | 1,786 |         |  | $ | 2,069    |            |  | $    | (2,070 | ) |  | $ | 1,785 | 
|              |                                  |                |   |       |         |  |   |          |            |  |      |       

Transaction Closing Costs






| |   |                                                                                                                                              
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------
| |  | Workforce reductions as a result of plant closings, plant
    rationalizations and consolidation of administrative functions
    and offices;

-11-



---



##### Table of Contents



DEAN HOLDING COMPANY


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




| |   |                                                                                                                                                   
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Shutdown costs, including those costs necessary to clean and
    prepare the abandoned facilities for closure; and                                
|
| |  | Costs incurred after shutdown such as lease obligations or
    termination costs, utilities and property taxes after shutdown
    of the facility.



|                          |  |                |       |  |          |   |            |      |  |   |       | 
|------------------------- |  | -------------- | ----- |  | -------- | - | ---------- | ---- |  | - | ----- | 
|                          |  | Accrued        |       |  |          |   | Accrued    |     
|                          |  | Charges at     |       |  |          |   | Charges at |     
|                          |  | December 31,   |       |  |          |   | March 31,  |     
|                          |  | 2004           |       |  | Payments |   |            | 2005 | 
|                          |  |                |       |  |          |   |            |      | 
|                          |  | (In thousands) |      
|Workforce reduction costs |  | $              | 1,439 |  |          | $ | (129       | )    |  | $ | 1,310 | 
|Shutdown costs            |  |                | 2,189 |  |          |   | (163       | )    |  |   | 2,026 | 
|                          |  |                |       |  |          |   |            |      | 
|Total                     |  | $              | 3,628 |  |          | $ | (292       | )    |  | $ | 3,336 | 
|                          |  |                |       |  |          |   |            |      | 



|   |                              
|-- | -----------------------------
|8. | Commitments and Contingencies

Guaranty of Dean Foods Companys Obligations Under Its
Senior Credit Facility






| |   |                                                                                        
| | - | ---------------------------------------------------------------------------------------
| |  | $56.25 million quarterly beginning on December 31,
    2006 through September 30, 2008;
|
| |  | $262.5 million quarterly beginning on December 31,
    2008 through June 30, 2009; and 
|
| |  | A final payment of $262.5 million on the maturity date of
    August 13, 2009.         











-12-



---



##### Table of Contents



DEAN HOLDING COMPANY


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




Insurance


Leases and Purchase Obligations




Litigation, Investigations and Audits




|   |                                                        
|-- | -------------------------------------------------------
|9. | Business and Geographic Information and Major Customers

Segment Information










-13-



---



##### Table of Contents



DEAN HOLDING COMPANY


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                 |                                           |                    |   |         |           |  |   |         |         | 
|-------------------------------- | ----------------------------------------- | ------------------ | - | ------- | --------- |  | - | ------- | ------- | 
|                                 |                                           | Three Months Ended |  
|                                 |                                           | March 31           |  
|                                 |                                           |                    |  
|                                 |                                           | 2005               |   |         | 2004      | 
|                                 |                                           |                    |   |         |           | 
|                                 |                                           | (In thousands)     |  
|Net sales to external customers: |                                           |                    |   |         |           |  |   |        
|                                 | Dairy Group                               |                    | $ | 906,141 |           |  | $ | 827,683 |        
|                                 | Specialty Foods Group                     |                    |   | 157,157 |           |  |   | 165,483 |        
|                                 |                                           |                    |   |         |           | 
|                                 |                                           | Total              |   | $       | 1,063,298 |  |   | $       | 993,166 | 
|                                 |                                           |                    |   |         |           | 
|Operating income:                |                                           |                    |   |         |           |  |   |        
|                                 | Dairy Group                               |                    | $ | 64,328  |           |  | $ | 60,894  |        
|                                 | Specialty Foods Group                     |                    |   | 17,667  |           |  |   | 19,306  |        
|                                 | Corporate                                 |                    |   | (10,925 | )         |  |   | (11,775 | )      
|                                 |                                           |                    |   |         |           | 
|                                 | Segment operating income                  |                    |   | 71,070  |           |  |   | 68,425  |        
|                                 | Facility closing and reorganization costs |                    |   | (2,069  | )         |  |   | (2,702  | )      
|                                 |                                           |                    |   |         |           | 
|                                 |                                           | Total              |   | $       | 69,001    |  |   | $       | 65,723  | 
|                                 |                                           |                    |   |         |           | 

|        |                       |                |   |           |              |  |   |           |           | 
|------- | --------------------- | -------------- | - | --------- | ------------ |  | - | --------- | --------- | 
|        |                       | March 31,      |   |           | December 31, | 
|        |                       | 2005           |   |           | 2004         | 
|        |                       |                |   |           |              | 
|        |                       | (In thousands) |  
|Assets: |                       |                |   |           |              |  |   |          
|        | Dairy Group           |                | $ | 2,216,125 |              |  | $ | 2,217,628 |          
|        | Specialty Foods Group |                |   | 590,102   |              |  |   | 604,687   |          
|        | Corporate             |                |   | 67,809    |              |  |   | 66,358    |          
|        |                       |                |   |           |              | 
|        |                       | Total          |   | $         | 2,874,036    |  |   | $         | 2,888,673 | 
|        |                       |                |   |           |              | 



Significant Customers


-14-



---



##### Table of Contents








|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 2. | Managements Discussion and Analysis of Financial
    Condition and Results of Operations





Results of Operations




|                              |                                           |                                    |         |       |         |  |       |         |      |   |         |       |       |  |       |      |      | 
|----------------------------- | ----------------------------------------- | ---------------------------------- | ------- | ----- | ------- |  | ----- | ------- | ---- | - | ------- | ----- | ----- |  | ----- | ---- | ---- | 
|                              |                                           | Quarter Ended March 31             |        
|                              |                                           |                                    |        
|                              |                                           | 2005                               |         |       | 2004    | 
|                              |                                           |                                    |         |       |         | 
|                              |                                           | Dollars                            |         |       | Percent |  |       | Dollars |      |   | Percent |      
|                              |                                           |                                    |         |       |         |  |       |         |      |   |         |      
|                              |                                           | (Dollars in millions)              |        
|Net sales                     |                                           | $                                  | 1,063.3 |       |         |  | 100.0 | %       |      | $ | 993.2   |       |       |  | 100.0 | %   
|Cost of sales                 |                                           |                                    | 813.3   |       |         |  | 76.5  |         |      |   | 749.6   |       |       |  | 75.5  |     
|                              |                                           |                                    |         |       |         |  |       |         |      |   |         |      
|Gross profit                  |                                           |                                    | 250.0   |       |         |  | 23.5  |         |      |   | 243.6   |       |       |  | 24.5  |     
|Operating costs and expenses: |                                           |                                    |         |       |         |  |       |         |      |   |         |       |       |  |       |     
|                              | Selling and distribution                  |                                    |         | 143.4 |         |  |       | 13.5    |      |   |         | 139.8 |       |  |       | 14.1 |     
|                              | General and administrative                |                                    |         | 34.8  |         |  |       | 3.3     |      |   |         | 34.8  |       |  |       | 3.5  |     
|                              | Amortization expense                      |                                    |         | 0.7   |         |  |       |        |      |   |         | 0.6   |       |  |       | 0.1  |     
|                              | Facility closing and reorganization costs |                                    |         | 2.1   |         |  |       | 0.2     |      |   |         | 2.7   |       |  |       | 0.2  |     
|                              |                                           |                                    |         |       |         |  |       |         |      |   |         |      
|                              |                                           | Total operating costs and expenses |         |       | 181.0   |  |       |         | 17.0 |   |         |       | 177.9 |  |       |      | 17.9 | 
|                              |                                           |                                    |         |       |         |  |       |         |      |   |         |      
|Total operating income        |                                           | $                                  | 69.0    |       |         |  | 6.5   | %       |      | $ | 65.7    |       |       |  | 6.6   | %   
|                              |                                           |                                    |         |       |         |  |       |         |      |   |         |      



| |                                                                            
| | ---------------------------------------------------------------------------
| | Quarter Ended March 31, 2005 Compared to Quarter
    Ended March 31, 2004 

Consolidated Results


Net Sales


|                      |       |                        |       |             |      |   |             |            |  |   |            |      |  |  |      |     |  
|--------------------- | ----- | ---------------------- | ----- | ----------- | ---- | - | ----------- | ---------- |  | - | ---------- | ---- |  |  | ---- | --- | -
|                      |       | Quarter Ended March 31 |      
|                      |       |                        |      
|                      |       |                        |       | $ Increase/ |      |   | % Increase/ |           
|                      |       | 2005                   |       |             | 2004 |   |             | (Decrease) |  |   | (Decrease) |     
|                      |       |                        |       |             |      |   |             |            |  |   |            |     
|                      |       | (Dollars in millions)  |      
|Dairy Group           |       | $                      | 906.1 |             |      | $ | 827.7       |            |  | $ | 78.4       |      |  |  | 9.5  | %  
|Specialty Foods Group |       |                        | 157.2 |             |      |   | 165.5       |            |  |   | (8.3       | )    |  |  | (5.0 | )  
|                      |       |                        |       |             |      |   |             |            |  |   |            |     
|                      | Total |                        | $     | 1,063.3     |      |   | $           | 993.2      |  |   | $          | 70.1 |  |  |      | 7.1 | %
|                      |       |                        |       |             |      |   |             |            |  |   |            |     



Cost of Sales


-15-



---



##### Table of Contents





Operating Costs and Expenses


Operating Income


Other (Income) Expense


Income Taxes




| |                                                                            
| | ---------------------------------------------------------------------------
| | Quarter Ended March 31, 2005 Compared to Quarter
    Ended March 31, 2004 

Results by Segment




| |              
| | -------------
| | Dairy Group 



|                               |  |                        |       |  |         |  |       |         |  |   |         |  |  |  |       |  
|------------------------------ |  | ---------------------- | ----- |  | ------- |  | ----- | ------- |  | - | ------- |  |  |  | ----- | -
|                               |  | Quarter Ended March 31 |      
|                               |  |                        |      
|                               |  | 2005                   |       |  | 2004    | 
|                               |  |                        |       |  |         | 
|                               |  | Dollars                |       |  | Percent |  |       | Dollars |  |   | Percent | 
|                               |  |                        |       |  |         |  |       |         |  |   |         | 
|                               |  | (Dollars in millions)  |      
|Net sales                      |  | $                      | 906.1 |  |         |  | 100.0 | %       |  | $ | 827.7   |  |  |  | 100.0 | %
|Cost of sales                  |  |                        | 690.6 |  |         |  | 76.2  |         |  |   | 621.1   |  |  |  | 75.0  |  
|                               |  |                        |       |  |         |  |       |         |  |   |         | 
|Gross profit                   |  |                        | 215.5 |  |         |  | 23.8  |         |  |   | 206.6   |  |  |  | 25.0  |  
|Operating costs and expenses   |  |                        | 151.2 |  |         |  | 16.7  |         |  |   | 145.7   |  |  |  | 17.6  |  
|                               |  |                        |       |  |         |  |       |         |  |   |         | 
|Total segment operating income |  | $                      | 64.3  |  |         |  | 7.1   | %       |  | $ | 60.9    |  |  |  | 7.4   | %
|                               |  |                        |       |  |         |  |       |         |  |   |         | 

-16-



---



##### Table of Contents





|               |                         |                       |       |       |         |  |     |      |   
|-------------- | ----------------------- | --------------------- | ----- | ----- | ------- |  | --- | ---- | --
|               |                         | Dollars               |       |       | Percent | 
|               |                         |                       |       |       |         | 
|               |                         | (Dollars in millions) |      
|2004 Net sales |                         | $                     | 827.7 |       |         |  |     |     
|               | Volume                  |                       |       | (14.7 | )       |  |     | (1.8 | )%
|               | Pricing and product mix |                       |       | 93.1  |         |  |     | 11.3 |   
|               |                         |                       |       |       |         | 
|2005 Net sales |                         | $                     | 906.1 |       |         |  | 9.5 | %   
|               |                         |                       |       |       |         | 



|                                  |  |               |      |     |      |   |      |          |  |  |    |  
|--------------------------------- |  | ------------- | ---- | --- | ---- | - | ---- | -------- |  |  | -- | -
|                                  |  | Quarter Ended |     
|                                  |  | March 31*     |     
|                                  |  |               |     
|                                  |  | 2005          |      |     | 2004 |   |      | % Change | 
|                                  |  |               |      |     |      |   |      |          | 
|Class I raw skim milk mover(3)    |  | $             | 9.09 | (1) |      | $ | 6.66 | (1)      |  |  | 36 | %
|Class I butterfat mover(3)        |  |               | 1.86 | (2) |      |   | 1.53 | (2)      |  |  | 22 |  
|Class II raw skim milk minimum(4) |  |               | 7.34 | (1) |      |   | 6.64 | (1)      |  |  | 11 |  
|Class II butterfat minimum(4)     |  |               | 1.75 | (2) |      |   | 1.92 | (2)      |  |  | (9 | )






| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | * | The prices noted in this table are not the prices that we
    actually pay. The federal order minimum prices at any given
    location for Class I raw skim milk or Class I
    butterfat are based on the Class I mover prices plus a
    location differential. Class II prices noted in the table
    are federal minimum prices, applicable at all locations. Our
    actual cost also includes producer premiums, procurement costs
    and other related charges that vary by location and vendor.



|    |                                                                                                                                             
|--- | --------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Prices are per hundredweight.                                                                                                               
|   
|(2) | Prices are per pound.                                                                                                                       
|   
|(3) | We process Class I raw skim milk and butterfat into fluid
    milk products.                                                                
|   
|(4) | We process Class II raw skim milk and butterfat into
    products such as cottage cheese, creams and creamers, ice cream
    and sour cream.





-17-



---



##### Table of Contents







| |                        
| | -----------------------
| | Specialty Foods Group 



|                               |  |                        |       |  |         |  |       |         |  |   |         |  |  |  |       |  
|------------------------------ |  | ---------------------- | ----- |  | ------- |  | ----- | ------- |  | - | ------- |  |  |  | ----- | -
|                               |  | Quarter Ended March 31 |      
|                               |  |                        |      
|                               |  | 2005                   |       |  | 2004    | 
|                               |  |                        |       |  |         | 
|                               |  | Dollars                |       |  | Percent |  |       | Dollars |  |   | Percent | 
|                               |  |                        |       |  |         |  |       |         |  |   |         | 
|                               |  | (Dollars in thousands) |      
|Net sales                      |  | $                      | 157.2 |  |         |  | 100.0 | %       |  | $ | 165.5   |  |  |  | 100.0 | %
|Cost of sales                  |  |                        | 122.6 |  |         |  | 78.0  |         |  |   | 128.7   |  |  |  | 77.8  |  
|                               |  |                        |       |  |         |  |       |         |  |   |         | 
|Gross profit                   |  |                        | 34.6  |  |         |  | 22.0  |         |  |   | 36.8    |  |  |  | 22.2  |  
|Operating costs and expenses   |  |                        | 16.9  |  |         |  | 10.7  |         |  |   | 17.5    |  |  |  | 10.5  |  
|                               |  |                        |       |  |         |  |       |         |  |   |         | 
|Total segment operating income |  | $                      | 17.7  |  |         |  | 11.3  | %       |  | $ | 19.3    |  |  |  | 11.7  | %
|                               |  |                        |       |  |         |  |       |         |  |   |         | 



|               |                         |                       |       |      |            |  |      |      |   
|-------------- | ----------------------- | --------------------- | ----- | ---- | ---------- |  | ---- | ---- | --
|               |                         | Dollars               |       |      | Percentage | 
|               |                         |                       |       |      |            | 
|               |                         | (Dollars in millions) |      
|2004 Net sales |                         | $                     | 165.5 |      |            |  |      |     
|               | Volume                  |                       |       | (8.6 | )          |  |      | (5.2 | )%
|               | Pricing and product mix |                       |       | 0.3  |            |  |      | 0.2  |   
|               |                         |                       |       |      |            | 
|2005 Net sales |                         | $                     | 157.2 |      |            |  | (5.0 | )%  
|               |                         |                       |       |      |            | 












|        |                        
|------- | -----------------------
|Item 4. | Controls and Procedures

Quarterly Controls Evaluation and Related CEO and CFO
Certifications




-18-



---



##### Table of Contents







Definition of Disclosure Controls




Limitations on the Effectiveness of Controls




Scope of the Controls Evaluation




-19-



---



##### Table of Contents



Conclusions




-20-



---



##### Table of Contents






Part II  Other Information







|        |         
|------- | --------
|Item 6. | Exhibits

Exhibits


|     |  |                                                                                                       
|---- |  | ------------------------------------------------------------------------------------------------------
|31.1 |  | Certification of Chief Executive Officer pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002
|31.2 |  | Certification of Chief Financial Officer pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002
|32.1 |  | Certification of Chief Executive Officer pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002
|32.2 |  | Certification of Chief Financial Officer pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002

-21-



---



##### Table of Contents



SIGNATURES






| |                                                   
| | --------------------------------------------------
| | Dean Holding Company                              
|
| | /s/ Ronald L. McCrummen                           
| |                                                   
| | Ronald L. McCrummen                               
| | Senior Vice President and Chief Accounting Officer



-22-



---



##### Table of Contents



EXHIBIT INDEX


|        |      |             |  |                                                                                                       
|------- | ---- | ----------- |  | ------------------------------------------------------------------------------------------------------
|Exhibit |      |            
|Number  |      | Description
|        |      |            
|        | 31.1 |             |  | Certification of Chief Executive Officer pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002
|        | 31.2 |             |  | Certification of Chief Financial Officer pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002
|        | 32.1 |             |  | Certification of Chief Executive Officer pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002
|        | 32.2 |             |  | Certification of Chief Financial Officer pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002