##### Table of Contents









UNITED STATES 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 March 31, 2006
|or                                           
|                                             
|o                                             |  | 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


12b-2


o o þ


12b-2 o þ




10-Q 10-Q.










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##### 










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 |      |  | 12 | 
|                                             | Item 4  Controls and
    Procedures                                                                   |      |  | 14 | 
|Part II  Other
    Information              |                                                                                                        |      |  |   
|                                             | Item 1  Legal
    Proceedings                                                                         |      |  | 16 | 
|                                             | Item 1A  Risk Factors                                                                                 |      |  | 16 | 
|                                             | Item 6  Exhibits                                                                                      |      |  | 17 | 
|Certification of CEO Pursuant to Section 302
|Certification of CAO Pursuant to Section 302
|Certification of CEO Pursuant to Section 906
|Certification of CAO Pursuant to Section 906



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##### Table of Contents






Part I  Financial Information







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

DEAN HOLDING COMPANY


CONDENSED CONSOLIDATED BALANCE SHEETS




|                                         |                                           |                               |           |         |              |  |           |         |           | 
|---------------------------------------- | ----------------------------------------- | ----------------------------- | --------- | ------- | ------------ |  | --------- | ------- | --------- | 
|                                         |                                           | March 31,                     |           |         | December 31, | 
|                                         |                                           | 2006                          |           |         | 2005         | 
|                                         |                                           |                               |           |         |              | 
|                                         |                                           | (unaudited)                   |          
|Assets                                   |                                           |                               |           |         |              |  |           |        
|Current assets:                          |                                           |                               |           |         |              |  |           |        
|                                         | Cash and cash equivalents                 |                               | $         | 15,959  |              |  | $         | 16,056  |          
|                                         | Receivables, net                          |                               |           | 268,669 |              |  |           | 283,905 |          
|                                         | Inventories                               |                               |           | 104,545 |              |  |           | 104,488 |          
|                                         | Deferred income taxes                     |                               |           | 33,556  |              |  |           | 37,071  |          
|                                         | Prepaid expenses and other current assets |                               |           | 12,935  |              |  |           | 11,157  |          
|                                         |                                           |                               |           |         |              | 
|                                         |                                           | Total current assets          |           |         | 435,664      |  |           |         | 452,677   | 
|Property, plant and equipment, net       |                                           |                               | 508,668   |         |              |  | 508,963   |        
|Goodwill                                 |                                           |                               | 1,080,529 |         |              |  | 1,080,529 |        
|Identifiable intangible and other assets |                                           |                               | 196,400   |         |              |  | 195,704   |        
|                                         |                                           |                               |           |         |              | 
|                                         |                                           | Total                         |           | $       | 2,221,261    |  |           | $       | 2,237,873 | 
|                                         |                                           |                               |           |         |              | 
|                                        
|Liabilities and Parents Net Investment  |                                           |                               |           |         |              |  |           |        
|Current liabilities:                     |                                           |                               |           |         |              |  |           |        
|                                         | Accounts payable and accrued expenses     |                               | $         | 267,767 |              |  | $         | 292,163 |          
|                                         | Income taxes payable                      |                               |           | 5,654   |              |  |           | 5,492   |          
|                                         | Current portion of long-term debt         |                               |           | 28      |              |  |           | 28      |          
|                                         |                                           |                               |           |         |              | 
|                                         |                                           | Total current liabilities     |           |         | 273,449      |  |           |         | 297,683   | 
|Long-term debt                           |                                           |                               | 750,255   |         |              |  | 757,743   |        
|Deferred income taxes                    |                                           |                               | 153,496   |         |              |  | 148,396   |        
|Other long-term liabilities              |                                           |                               | 64,905    |         |              |  | 71,079    |        
|Commitments and contingencies (Note 9)   |                                           |                               |           |         |              |  |           |        
|Parents net investment:                 |                                           |                               |           |         |              |  |           |        
|                                         | Parents net investment                   |                               |           | 979,643 |              |  |           | 963,546 |          
|                                         | Accumulated other comprehensive loss      |                               |           | (487    | )            |  |           | (574    | )        
|                                         |                                           |                               |           |         |              | 
|                                         |                                           | Total parents net investment |           |         | 979,156      |  |           |         | 962,972   | 
|                                         |                                           |                               |           |         |              | 
|                                         |                                           | Total                         |           | $       | 2,221,261    |  |           | $       | 2,237,873 | 
|                                         |                                           |                               |           |         |              | 



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DEAN HOLDING COMPANY


CONDENSED CONSOLIDATED STATEMENTS OF INCOME




|                                                      |                                           |                                    |         |         |         |   |         |         |         | 
|----------------------------------------------------- | ----------------------------------------- | ---------------------------------- | ------- | ------- | ------- | - | ------- | ------- | ------- | 
|                                                      |                                           | Three Months Ended                 |        
|                                                      |                                           | March 31                           |        
|                                                      |                                           |                                    |        
|                                                      |                                           | 2006                               |         |         | 2005    |  
|                                                      |                                           |                                    |         |         |         |  
|                                                      |                                           | (unaudited)                        |        
|Net sales                                             |                                           | $                                  | 912,613 |         |         | $ | 906,140 |        
|Cost of sales                                         |                                           |                                    | 687,702 |         |         |   | 690,715 |        
|                                                      |                                           |                                    |         |         |         |  
|Gross profit                                          |                                           |                                    | 224,911 |         |         |   | 215,425 |        
|Operating costs and expenses:                         |                                           |                                    |         |         |         |   |         |        
|                                                      | Selling and distribution                  |                                    |         | 140,014 |         |   |         | 130,473 |        
|                                                      | General and administrative                |                                    |         | 29,354  |         |   |         | 31,723  |        
|                                                      | Amortization of intangibles               |                                    |         | 199     |         |   |         | 320     |        
|                                                      | Facility closing and reorganization costs |                                    |         | 177     |         |   |         | 1,523   |        
|                                                      |                                           |                                    |         |         |         |  
|                                                      |                                           | Total operating costs and expenses |         |         | 169,744 |   |         |         | 164,039 | 
|                                                      |                                           |                                    |         |         |         |  
|Operating income                                      |                                           |                                    | 55,167  |         |         |   | 51,386  |        
|Other (income) expense:                               |                                           |                                    |         |         |         |   |         |        
|                                                      | Interest expense                          |                                    |         | 11,793  |         |   |         | 13,743  |        
|                                                      | Other income, net                         |                                    |         | (32     | )       |   |         | (151    | )      
|                                                      |                                           |                                    |         |         |         |  
|                                                      |                                           | Total other expense                |         |         | 11,761  |   |         |         | 13,592  | 
|                                                      |                                           |                                    |         |         |         |  
|Income from continuing operations before income taxes |                                           |                                    | 43,406  |         |         |   | 37,794  |        
|Income taxes                                          |                                           |                                    | 17,871  |         |         |   | 14,610  |        
|                                                      |                                           |                                    |         |         |         |  
|Income from continuing operations                     |                                           |                                    | 25,535  |         |         |   | 23,184  |        
|Income from discontinued operations, net of tax       |                                           |                                    |        |         |         |   | 10,512  |        
|                                                      |                                           |                                    |         |         |         |  
|Net income                                            |                                           | $                                  | 25,535  |         |         | $ | 33,696  |        
|                                                      |                                           |                                    |         |         |         |  



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DEAN HOLDING COMPANY


CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS




|                                               |                                                                                       |                                       |                                              |         |         |         |        |         |        |         |  
|---------------------------------------------- | ------------------------------------------------------------------------------------- | ------------------------------------- | -------------------------------------------- | ------- | ------- | ------- | ------ | ------- | ------ | ------- | -
|                                               |                                                                                       | Three Months Ended                    |                                             
|                                               |                                                                                       | March 31                              |                                             
|                                               |                                                                                       |                                       |                                             
|                                               |                                                                                       | 2006                                  |                                              |         | 2005    |        
|                                               |                                                                                       |                                       |                                              |         |         |        
|                                               |                                                                                       | (unaudited)                           |                                             
|Cash flows from operating activities:          |                                                                                       |                                       |                                              |         |         |         |        |        
|                                               | Net Income                                                                            |                                       | $                                            | 25,535  |         |         | $      | 33,696  |       
|                                               | Income from discontinued operations                                                   |                                       |                                              |        |         |         |        | (10,512 | )     
|                                               | Adjustments to reconcile net income to net cash provided by
    operating activities: |                                       |                                              |         |         |         |        |         |       
|                                               |                                                                                       | Depreciation and amortization         |                                              |         | 19,350  |         |        |         | 17,852 |        
|                                               |                                                                                       | Share-based compensation expense      |                                              |         | 553     |         |        |         | 750    |        
|                                               |                                                                                       | (Gain) loss on disposition of assets  |                                              |         | (120    | )       |        |         | 354    |        
|                                               |                                                                                       | Deferred income taxes                 |                                              |         | 8,615   |         |        |         | 964    |        
|                                               |                                                                                       | Other                                 |                                              |         | (210    | )       |        |         | 366    |        
|                                               | Changes in operating assets and liabilities, net of acquisitions:                     |                                       |                                              |         |         |         |        |         |       
|                                               |                                                                                       | Receivables                           |                                              |         | 15,236  |         |        |         | (1,689 | )      
|                                               |                                                                                       | Inventories                           |                                              |         | (57     | )       |        |         | (7,133 | )      
|                                               |                                                                                       | Prepaid expenses and other assets     |                                              |         | (2,424  | )       |        |         | 3,190  |        
|                                               |                                                                                       | Accounts payable and accrued expenses |                                              |         | (30,601 | )       |        |         | 647    |        
|                                               |                                                                                       | Income taxes payable                  |                                              |         | 162     |         |        |         | 64     |        
|                                               |                                                                                       |                                       |                                              |         |         |        
|                                               |                                                                                       |                                       | Net cash provided by continuing operations   |         |         | 36,039  |        |         |        | 38,549  |  
|                                               |                                                                                       |                                       | Net cash provided by discontinued operations |         |         |        |        |         |        | 30,220  |  
|                                               |                                                                                       |                                       |                                              |         |         |        
|                                               |                                                                                       |                                       | Net cash provided by operating activities    |         |         | 36,039  |        |         |        | 68,769  |  
|Cash flows from investing activities:          |                                                                                       |                                       |                                              |         |         |         |        |        
|                                               | Additions to property, plant and equipment                                            |                                       |                                              | (17,481 | )       |         |        | (9,165  | )     
|                                               | Cash outflows for acquisitions                                                        |                                       |                                              | (849    | )       |         |        |        |       
|                                               | Proceeds from sale of fixed assets                                                    |                                       |                                              | 505     |         |         |        | 141     |       
|                                               |                                                                                       |                                       |                                              |         |         |        
|                                               |                                                                                       |                                       | Net cash used in continuing operations       |         |         | (17,825 | )      |         |        | (9,024  | )
|                                               |                                                                                       |                                       | Net cash used in discontinued operations     |         |         |        |        |         |        | (2,626  | )
|                                               |                                                                                       |                                       |                                              |         |         |        
|                                               |                                                                                       |                                       | Net cash used in investing activities        |         |         | (17,825 | )      |         |        | (11,650 | )
|Cash flows from financing activities:          |                                                                                       |                                       |                                              |         |         |         |        |        
|                                               | Proceeds from issuance of debt                                                        |                                       |                                              |        |         |         |        | 5,709   |       
|                                               | Repayment of debt                                                                     |                                       |                                              | (8,320  | )       |         |        |        |       
|                                               | Distribution to parent                                                                |                                       |                                              | (9,991  | )       |         |        | (68,028 | )     
|                                               |                                                                                       |                                       |                                              |         |         |        
|                                               |                                                                                       |                                       | Net cash used in continuing operations       |         |         | (18,311 | )      |         |        | (62,319 | )
|                                               |                                                                                       |                                       | Net cash used in discontinued operations     |         |         |        |        |         |        | (46     | )
|                                               |                                                                                       |                                       |                                              |         |         |        
|                                               |                                                                                       |                                       | Net cash used in financing activities        |         |         | (18,311 | )      |         |        | (62,365 | )
|                                               |                                                                                       |                                       |                                              |         |         |        
|Decrease in cash and cash equivalents          |                                                                                       |                                       | (97                                          | )       |         |         | (5,246 | )      
|Cash and cash equivalents, beginning of period |                                                                                       |                                       | 16,056                                       |         |         |         | 12,490 |        
|                                               |                                                                                       |                                       |                                              |         |         |        
|Cash and cash equivalents, end of period       |                                                                                       | $                                     | 15,959                                       |         |         | $       | 7,244  |        
|                                               |                                                                                       |                                       |                                              |         |         |        



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DEAN HOLDING COMPANY


NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


March 31, 2006






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

Basis of Presentation 10-K 10-K








Shipping and Handling Fees


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Share-Based Compensation


Recently Issued Accounting Pronouncements






|   |                        
|-- | -----------------------
|2. | Discontinued Operations







|                    |  |                |         | 
|------------------- |  | -------------- | ------- | 
|                    |  | Three Months   |        
|                    |  | Ended          |        
|                    |  | March 31, 2005 |        
|                    |  |                |        
|                    |  | (In thousands) |        
|Net sales           |  | $              | 157,157 | 
|Income before taxes |  |                | 16,733  | 



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|   |            
|-- | -----------
|3. | Inventories

|                           |       |                |        |         |              |   |        |         | 
|-------------------------- | ----- | -------------- | ------ | ------- | ------------ | - | ------ | ------- | 
|                           |       | March 31,      |        |         | December 31, |  
|                           |       | 2006           |        |         | 2005         |  
|                           |       |                |        |         |              |  
|                           |       | (In thousands) |       
|Raw materials and supplies |       | $              | 32,277 |         |              | $ | 34,530 |        
|Finished goods             |       |                | 72,268 |         |              |   | 69,958 |        
|                           |       |                |        |         |              |  
|                           | Total |                | $      | 104,545 |              |   | $      | 104,488 | 
|                           |       |                |        |         |              |  



|   |                  
|-- | -----------------
|4. | Intangible Assets



|                                         |                  |                |         |         |                   |   |        |          |   |       |          |         |  |              |         |         |          |   |        |        |   |   |         |         | 
|---------------------------------------- | ---------------- | -------------- | ------- | ------- | ----------------- | - | ------ | -------- | - | ----- | -------- | ------- |  | ------------ | ------- | ------- | -------- | - | ------ | ------ | - | - | ------- | ------- | 
|                                         |                  | March 31, 2006 |         |         | December 31, 2005 |  
|                                         |                  |                |         |         |                   |  
|                                         |                  | Gross          |         |         |                   |   | Net    |          |   | Gross |          |         |  |              | Net     |        
|                                         |                  | Carrying       |         |         | Accumulated       |   |        | Carrying |   |       | Carrying |         |  | Accumulated  |         |         | Carrying |  
|                                         |                  | Amount         |         |         | Amortization      |   |        | Amount   |   |       | Amount   |         |  | Amortization |         |         | Amount   |  
|                                         |                  |                |         |         |                   |   |        |          |   |       |          |         |  |              |         |         |          |  
|                                         |                  | (In thousands) |        
|Intangible assets with indefinite lives: |                  |                |         |         |                   |   |        |          |   |       |          |         |  |              |         |         |          |   |        |        |   |   |         |        
|                                         | Trademarks       |                | $       | 179,310 |                   |   | $      |         |   |       | $        | 179,310 |  |              | $       | 179,310 |          |   | $      |       |   |   | $       | 179,310 | 
|Intangible assets with finite lives:     |                  |                |         |         |                   |   |        |          |   |       |          |         |  |              |         |         |          |   |        |        |   |   |         |        
|                                         | Customer-related |                |         | 19,929  |                   |   |        | (8,575   | ) |       |          | 11,354  |  |              |         | 19,929  |          |   |        | (8,015 | ) |   |         | 11,914  | 
|                                         |                  |                |         |         |                   |   |        |          |   |       |          |         |  |              |         |         |          |  
|Total                                    |                  | $              | 199,239 |         |                   | $ | (8,575 | )        |   | $     | 190,664  |         |  | $            | 199,239 |         |          | $ | (8,015 | )      |   | $ | 191,224 |        
|                                         |                  |                |         |         |                   |   |        |          |   |       |          |         |  |              |         |         |          |  



|     |  |   |             | 
|---- |  | - | ----------- | 
|2006 |  | $ | 2.2 million | 
|2007 |  |   | 2.2 million | 
|2008 |  |   | 2.2 million | 
|2009 |  |   | 2.2 million | 
|2010 |  |   | 2.2 million | 



|   |               
|-- | --------------
|5. | Long-Term Debt

|                                           |                      |                   |         |     |                      |  |       |             |  |   |          |     |         |  |       |   |  | 
|------------------------------------------ | -------------------- | ----------------- | ------- | --- | -------------------- |  | ----- | ----------- |  | - | -------- | --- | ------- |  | ----- | - |  | 
|                                           |                      | At March 31, 2006 |         |     | At December 31, 2005 | 
|                                           |                      |                   |         |     |                      | 
|                                           |                      | Amount            |         |     | Interest             |  |       | Amount      |  |   | Interest |    
|                                           |                      | Outstanding       |         |     | Rate                 |  |       | Outstanding |  |   | Rate     |    
|                                           |                      |                   |         |     |                      |  |       |             |  |   |          |    
|                                           |                      | (In thousands)    |        
|$250 million senior notes maturing in 2007 |                      | $                 | 250,170 |     |                      |  | 8.150 | %           |  | $ | 250,198  |     |         |  | 8.150 | %
|$200 million senior notes maturing in 2009 |                      |                   | 190,788 |     |                      |  | 6.625 |             |  |   | 190,192  |     |         |  | 6.625 |  
|$150 million senior notes maturing in 2017 |                      |                   | 128,367 |     |                      |  | 6.900 |             |  |   | 128,103  |     |         |  | 6.900 |  
|Receivables-backed facility                |                      |                   | 180,855 |     |                      |  | 5.011 |             |  |   | 189,168  |     |         |  | 4.600 |  
|Other                                      |                      |                   | 103     |     |                      |  |       |             |  |   | 110      |     |         |  |       |  
|                                           |                      |                   |         |     |                      |  |       |             |  |   |          |    
|                                           |                      |                   | 750,283 |     |                      |  |       |             |  |   | 757,771  |     |         |  |       |  
|                                           | Less current portion |                   |         | (28 | )                    |  |       |             |  |   |          | (28 | )       |  |       |   | 
|                                           |                      |                   |         |     |                      |  |       |             |  |   |          |    
|                                           |                      | Total             |         | $   | 750,255              |  |       |             |  |   |          | $   | 757,743 |  |       |   |  | 
|                                           |                      |                   |         |     |                      |  |       |             |  |   |          |    

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Senior Notes


Receivables-Backed Facility


Letters of Credit




|   |                            
|-- | ---------------------------
|6. | Comprehensive Income (Loss)



|                                                     |                                                         |                |      |      |             |   |     |        |   |   |      |      |  
|---------------------------------------------------- | ------------------------------------------------------- | -------------- | ---- | ---- | ----------- | - | --- | ------ | - | - | ---- | ---- | -
|                                                     |                                                         | Pre-Tax        |      |      | Tax Benefit |   |     | Net    |  
|                                                     |                                                         | Income (Loss)  |      |      | (Expense)   |   |     | Amount |  
|                                                     |                                                         |                |      |      |             |   |     |        |  
|                                                     |                                                         | (In thousands) |     
|Accumulated other comprehensive loss,                |                                                         |                |      |      |             |   |     |        |   |   |      |     
|                                                     | December 31, 2005                                       |                | $    | (562 | )           |   | $   | (12    | ) |   | $    | (574 | )
|                                                     | Net change in fair value of derivative instruments      |                |      | 249  |             |   |     |       |   |   |      | 249  |  
|                                                     | Transfer to parent                                      |                |      | (31  | )           |   |     |       |   |   |      | (31  | )
|                                                     | Cumulative translation adjustment arising during period |                |      | (131 | )           |   |     |       |   |   |      | (131 | )
|                                                     |                                                         |                |      |      |             |   |     |        |  
|Accumulated other comprehensive loss, March 31, 2006 |                                                         | $              | (475 | )    |             | $ | (12 | )      |   | $ | (487 | )   
|                                                     |                                                         |                |      |      |             |   |     |        |  

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|   |                                 
|-- | --------------------------------
|7. | Employee Postretirement Benefits



|                               |                       |                |     |     |      |   |     |     | 
|------------------------------ | --------------------- | -------------- | --- | --- | ---- | - | --- | --- | 
|                               |                       | Three Months   |    
|                               |                       | Ended          |    
|                               |                       | March 31       |    
|                               |                       |                |    
|                               |                       | 2006           |     |     | 2005 |  
|                               |                       |                |     |     |      |  
|                               |                       | (In thousands) |    
|Components of net period cost: |                       |                |     |     |      |   |     |    
|                               | Service cost          |                | $   | 285 |      |   | $   | 238 | 
|                               | Interest cost         |                |     | 251 |      |   |     | 209 | 
|Amortizations:                 |                       |                |     |     |      |   |     |    
|                               | Unrecognized net loss |                |     | 89  |      |   |     | 64  | 
|                               |                       |                |     |     |      |  
|Net periodic benefit cost      |                       | $              | 625 |     |      | $ | 511 |    
|                               |                       |                |     |     |      |  





|   |                                          
|-- | -----------------------------------------
|8. | Facility Closing and Reorganization Costs

Facility Closing and Reorganization Costs










| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | 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, 2006 was approximately $619,000. We are marketing
    these properties for sale.



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|              |                             |                |   |     |             |  |   |          |            |           |      |      |   |  |   |     | 
|------------- | --------------------------- | -------------- | - | --- | ----------- |  | - | -------- | ---------- | --------- | ---- | ---- | - |  | - | --- | 
|              |                             | Accrued        |   |     |             |  |   |          | Accrued    |          
|              |                             | Charges at     |   |     |             |  |   |          | Charges at |          
|              |                             | December 31,   |   |     | Charges     |  |   |          |            | March 31, |     
|              |                             | 2005           |   |     | (Reversals) |  |   | Payments |            |           | 2006 |     
|              |                             |                |   |     |             |  |   |          |            |           |      |     
|              |                             | (In thousands) |  
|Cash charges: |                             |                |   |     |             |  |   |          |            |           |      |      |   |  |   |    
|              | Workforce reduction costs   |                | $ | 449 |             |  | $ | (128     | )          |           | $    | (199 | ) |  | $ | 122 | 
|              | Shutdown costs              |                |   |    |             |  |   | 186      |            |           |      | (186 | ) |  |   |    | 
|              | Lease obligations and other |                |   | 58  |             |  |   | 119      |            |           |      | (120 | ) |  |   | 57  | 
|              |                             |                |   |     |             |  |   |          |            |           |      |     
|              | Total                       |                | $ | 507 |             |  | $ | 177      |            |           | $    | (505 | ) |  | $ | 179 | 
|              |                             |                |   |     |             |  |   |          |            |           |      |     



|   |                              
|-- | -----------------------------
|9. | Commitments and Contingencies

Contingent Obligations Related to Divested
Operations


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






| |   |                                                                                       
| | - | --------------------------------------------------------------------------------------
| |  | $56.3 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.        











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##### Table of Contents





Insurance


Leases


Litigation, Investigations and Audits




|    |                                           
|--- | ------------------------------------------
|10. | Geographic Information and Major Customers

Geographic Information


Significant Customers







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



10-Q,


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Results of Operations




|                              |                                           |                                    |       |       |         |  |       |         |      |   |         |       |       |  |       |      |      | 
|----------------------------- | ----------------------------------------- | ---------------------------------- | ----- | ----- | ------- |  | ----- | ------- | ---- | - | ------- | ----- | ----- |  | ----- | ---- | ---- | 
|                              |                                           | Quarter Ended March 31             |      
|                              |                                           |                                    |      
|                              |                                           | 2006                               |       |       | 2005    | 
|                              |                                           |                                    |       |       |         | 
|                              |                                           | Dollars                            |       |       | Percent |  |       | Dollars |      |   | Percent |      
|                              |                                           |                                    |       |       |         |  |       |         |      |   |         |      
|                              |                                           | (Dollars in millions)              |      
|Net sales                     |                                           | $                                  | 912.6 |       |         |  | 100.0 | %       |      | $ | 906.1   |       |       |  | 100.0 | %   
|Cost of sales                 |                                           |                                    | 687.7 |       |         |  | 75.4  |         |      |   | 690.7   |       |       |  | 76.2  |     
|                              |                                           |                                    |       |       |         |  |       |         |      |   |         |      
|Gross profit                  |                                           |                                    | 224.9 |       |         |  | 24.6  |         |      |   | 215.4   |       |       |  | 23.8  |     
|Operating costs and expenses: |                                           |                                    |       |       |         |  |       |         |      |   |         |       |       |  |       |     
|                              | Selling and distribution                  |                                    |       | 140.0 |         |  |       | 15.4    |      |   |         | 130.5 |       |  |       | 14.4 |     
|                              | General and administrative                |                                    |       | 29.3  |         |  |       | 3.2     |      |   |         | 31.7  |       |  |       | 3.5  |     
|                              | Amortization of intangibles               |                                    |       | 0.2   |         |  |       | 0.0     |      |   |         | 0.3   |       |  |       | 0.0  |     
|                              | Facility closing and reorganization costs |                                    |       | 0.2   |         |  |       | 0.0     |      |   |         | 1.5   |       |  |       | 0.2  |     
|                              |                                           |                                    |       |       |         |  |       |         |      |   |         |      
|                              |                                           | Total operating costs and expenses |       |       | 169.7   |  |       |         | 18.6 |   |         |       | 164.0 |  |       |      | 18.1 | 
|                              |                                           |                                    |       |       |         |  |       |         |      |   |         |      
|Operating income              |                                           | $                                  | 55.2  |       |         |  | 6.0   | %       |      | $ | 51.4    |       |       |  | 5.7   | %   
|                              |                                           |                                    |       |       |         |  |       |         |      |   |         |      



| |                                                                          
| | -------------------------------------------------------------------------
| | Quarter Ended March 31, 2006 Compared to Quarter
    Ended March 31, 2005

Net Sales


|               |                         |                       |       |       |         |  |     |      |  
|-------------- | ----------------------- | --------------------- | ----- | ----- | ------- |  | --- | ---- | -
|               |                         | Dollars               |       |       | Percent | 
|               |                         |                       |       |       |         | 
|               |                         | (Dollars in millions) |      
|2005 Net sales |                         | $                     | 906.1 |       |         |  |     |     
|               | Volume                  |                       |       | 32.0  |         |  |     | 3.5  | %
|               | Pricing and product mix |                       |       | (25.5 | )       |  |     | (2.8 | )
|               |                         |                       |       |       |         | 
|2006 Net sales |                         | $                     | 912.6 |       |         |  | 0.7 | %   
|               |                         |                       |       |       |         | 



|                                  |  |                         |      |     |      |   |      |          |  |  |     |   
|--------------------------------- |  | ----------------------- | ---- | --- | ---- | - | ---- | -------- |  |  | --- | --
|                                  |  | Quarter Ended March 31* |     
|                                  |  |                         |     
|                                  |  | 2006                    |      |     | 2005 |   |      | % Change | 
|                                  |  |                         |      |     |      |   |      |          | 
|Class I raw skim milk mover(3)    |  | $                       | 8.29 | (1) |      | $ | 9.09 | (1)      |  |  | (9  | )%
|Class I butterfat mover(3)        |  |                         | 1.45 | (2) |      |   | 1.86 | (2)      |  |  | (22 | ) 
|Class II raw skim milk minimum(4) |  |                         | 8.02 | (1) |      |   | 7.34 | (1)      |  |  | 9   |   
|Class II butterfat minimum(4)     |  |                         | 1.37 | (2) |      |   | 1.75 | (2)      |  |  | (22 | ) 

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##### Table of Contents








| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | * | 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.

Cost of Sales


Operating Costs and Expenses


Operating Income


Other (Income) Expense


Income Taxes







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

Controls Evaluation and Related Certifications




13a-14


-14-



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##### Table of Contents



Definition of Disclosure Controls




Limitations on the Effectiveness of Controls




Scope of the Controls Evaluation




Conclusions




-15-



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##### Table of Contents






Part II  Other Information







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








|         |             
|-------- | ------------
|Item 1A. | Risk Factors





| |                                                                                                                
| | ---------------------------------------------------------------------------------------------------------------
| | Changes in Laws, Regulations and Accounting Standards
    Could Have an Adverse Effect on Our Financial Results





| |                                                                      
| | ---------------------------------------------------------------------
| | Changes in Raw Milk and Other Input Costs Can Adversely
    Affect Us





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##### Table of Contents





| |                                                                                              
| | ---------------------------------------------------------------------------------------------
| | Loss of Rights to Any of Our Licensed Brands Could
    Adversely Affect Our Sales and Profits

LAND OLAKES




| |                                                                      
| | ---------------------------------------------------------------------
| | Decisions Made by Dean Foods Company Could Affect Our
    Performance





| |                                                                                              
| | ---------------------------------------------------------------------------------------------
| | Dean Foods Company has Substantial Debt and Other
    Financial Obligations that We Guarantee










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



| |    |    |  |                                                                                                        
| | -- | -- |  | -------------------------------------------------------------------------------------------------------
| | 31 | .1 |  | Certification of Chief Executive Officer pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002 
|
| | 31 | .2 |  | Certification of Chief Accounting 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 Accounting Officer pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002

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SIGNATURES






| |                        
| | -----------------------
| | DEAN HOLDING COMPANY   
|
| | /s/ Ronald L. McCrummen
| |                        



| |                                                   
| | --------------------------------------------------
| | Ronald L. McCrummen                               
| | Senior Vice President and Chief Accounting Officer



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##### 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 Accounting 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 Accounting Officer pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002

-19-