##### 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,
    2004
|                                                 
|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

(Exact name of Registrant as specified in its
charter)


(DEAN FOODS LOGO)

|                                                                   |  |                                         
|------------------------------------------------------------------ |  | ----------------------------------------
|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


(Address, including zip code, and telephone
number, including


area code, of Registrants principal
executive offices)


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

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

The registrant meets the conditions specified in
General Instruction H(1)(a) and (b) of Form 10-Q
and, therefore, is filing this form with the reduced disclosure
format permitted by General Instruction H(2) to Form 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 |      |  | 16 | 
|                                             | Item 4 
    Controls and Procedures                                                                   |      |  | 19 | 
|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





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##### Table of Contents






Part I  Financial
Information






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

DEAN HOLDING COMPANY

CONDENSED CONSOLIDATED BALANCE
SHEETS


(Dollars in thousands)


|                                           |                                                       |                            |           |              |           |  |           |           |           | 
|------------------------------------------ | ----------------------------------------------------- | -------------------------- | --------- | ------------ | --------- |  | --------- | --------- | --------- | 
|                                           |                                                       | March 31,                  |           | December 31,
|                                           |                                                       | 2004                       |           | 2003        
|                                           |                                                       |                            |           |             
|                                           |                                                       | (unaudited)                |           |             
|Assets                                     |                                                       |                            |           |              |           |  |           |          
|Current assets:                            |                                                       |                            |           |              |           |  |           |          
|                                           | Cash and cash equivalents                             |                            | $         | 11,462       |           |  | $         | 23,963    |          
|                                           | Accounts receivable, net                              |                            |           | 273,585      |           |  |           | 269,792   |          
|                                           | Inventories                                           |                            |           | 239,182      |           |  |           | 234,311   |          
|                                           | Deferred income taxes                                 |                            |           | 79,795       |           |  |           | 71,946    |          
|                                           | Prepaid expenses and other current assets             |                            |           | 18,747       |           |  |           | 16,047    |          
|                                           |                                                       |                            |           |              |           |  |           |          
|                                           |                                                       | Total current assets       |           |              | 622,771   |  |           |           | 616,059   | 
|Property, plant and equipment, net         |                                                       |                            | 637,758   |              |           |  | 638,267   |          
|Goodwill                                   |                                                       |                            | 1,438,212 |              |           |  | 1,421,711 |          
|Identifiable intangible and other assets   |                                                       |                            | 230,410   |              |           |  | 230,570   |          
|                                           |                                                       |                            |           |              |           |  |           |          
|                                           |                                                       | Total                      |           | $            | 2,929,151 |  |           | $         | 2,906,607 | 
|                                           |                                                       |                            |           |              |           |  |           |          
|                                          
|Liabilities and Stockholders
    Equity   |                                                       |                            |           |              |           |  |           |          
|                                          
|Current liabilities:                       |                                                       |                            |           |              |           |  |           |          
|                                           | Accounts payable and accrued expenses                 |                            | $         | 345,759      |           |  | $         | 345,806   |          
|                                           | Income taxes payable                                  |                            |           | 20,934       |           |  |           | 37,475    |          
|                                           | Current portion of long-term debt                     |                            |           | 33           |           |  |           | 3,509     |          
|                                           |                                                       |                            |           |              |           |  |           |          
|                                           |                                                       | Total current liabilities  |           |              | 366,726   |  |           |           | 386,790   | 
|Long-term debt                             |                                                       |                            | 860,579   |              |           |  | 794,062   |          
|Other long-term liabilities                |                                                       |                            | 165,167   |              |           |  | 174,044   |          
|Deferred income taxes                      |                                                       |                            | 221,513   |              |           |  | 212,889   |          
|Commitments and contingencies
    (Note 9) |                                                       |                            |           |              |           |  |           |          
|Stockholders equity:                      |                                                       |                            |           |              |           |  |           |          
|                                           | Common stock, 1,000 shares issued and
    outstanding |                            |           |              |           |  |           |           |          
|                                           | Additional paid-in capital                            |                            |           | 1,390,914    |           |  |           | 1,369,392 |          
|                                           | Retained earnings                                     |                            |           | 343,953      |           |  |           | 310,529   |          
|                                           | Receivable from parent                                |                            |           | (410,196     | )         |  |           | (330,651  | )        
|                                           | Accumulated other comprehensive income                |                            |           | (9,505       | )         |  |           | (10,448   | )        
|                                           |                                                       |                            |           |              |           |  |           |          
|                                           |                                                       | Total stockholders equity |           |              | 1,315,166 |  |           |           | 1,338,822 | 
|                                           |                                                       |                            |           |              |           |  |           |          
|                                           |                                                       | Total                      |           | $            | 2,929,151 |  |           | $         | 2,906,607 | 
|                                           |                                                       |                            |           |              |           |  |           |          

See Notes to Condensed Consolidated Financial
Statements.

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DEAN HOLDING COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF
INCOME


(In thousands)


|                              |                                              |                                    |         |         |         |   |         |         |         | 
|----------------------------- | -------------------------------------------- | ---------------------------------- | ------- | ------- | ------- | - | ------- | ------- | ------- | 
|                              |                                              |                                   
|                              |                                              | Three Months Ended                
|                              |                                              | March 31                          
|                              |                                              |                                   
|                              |                                              | 2004                               |         | 2003   
|                              |                                              |                                    |         |        
|                              |                                              | (unaudited)                        |         |        
|Net sales                     |                                              | $                                  | 993,166 |         |         | $ | 919,063 |        
|Cost of sales                 |                                              |                                    | 749,570 |         |         |   | 684,098 |        
|                              |                                              |                                    |         |         |         |   |         |        
|Gross profit                  |                                              |                                    | 243,596 |         |         |   | 234,965 |        
|Operating costs and expenses: |                                              |                                    |         |         |         |   |         |        
|                              | Selling and distribution                     |                                    |         | 139,742 |         |   |         | 128,270 |        
|                              | General and administrative                   |                                    |         | 34,799  |         |   |         | 33,070  |        
|                              | Amortization expense                         |                                    |         | 630     |         |   |         | 1,175   |        
|                              | Plant closing and rationalization costs, net |                                    |         | 2,702   |         |   |         |         |        
|                              |                                              |                                    |         |         |         |   |         |        
|                              |                                              | Total operating costs and expenses |         |         | 177,873 |   |         |         | 162,515 | 
|                              |                                              |                                    |         |         |         |   |         |        
|Operating income              |                                              |                                    | 65,723  |         |         |   | 72,450  |        
|Other (income) expense:       |                                              |                                    |         |         |         |   |         |        
|                              | Interest expense, net                        |                                    |         | 13,839  |         |   |         | 13,570  |        
|                              | Other income, net                            |                                    |         | (1,967  | )       |   |         | (283    | )      
|                              |                                              |                                    |         |         |         |   |         |        
|                              |                                              | Total other (income) expense       |         |         | 11,872  |   |         |         | 13,287  | 
|                              |                                              |                                    |         |         |         |   |         |        
|Income before income taxes    |                                              |                                    | 53,851  |         |         |   | 59,163  |        
|Income taxes                  |                                              |                                    | 20,427  |         |         |   | 22,701  |        
|                              |                                              |                                    |         |         |         |   |         |        
|Net income                    |                                              | $                                  | 33,424  |         |         | $ | 36,462  |        
|                              |                                              |                                    |         |         |         |   |         |        

See Notes to Condensed Consolidated Financial
Statements.

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DEAN HOLDING COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS


(In thousands)


|                                               |                                                                                       |                                                                       |                                                              |                                                         |        |         |         |         |        |         |         |  
|---------------------------------------------- | ------------------------------------------------------------------------------------- | --------------------------------------------------------------------- | ------------------------------------------------------------ | ------------------------------------------------------- | ------ | ------- | ------- | ------- | ------ | ------- | ------- | -
|                                               |                                                                                       |                                                                      
|                                               |                                                                                       | Three Months Ended                                                   
|                                               |                                                                                       | March 31                                                             
|                                               |                                                                                       |                                                                      
|                                               |                                                                                       | 2004                                                                  |                                                              | 2003                                                   
|                                               |                                                                                       |                                                                       |                                                              |                                                        
|                                               |                                                                                       |                                                                      
|                                               |                                                                                       | (unaudited)                                                          
|Cash Flows From Operating Activities           |                                                                                       |                                                                       |                                                              |                                                         |        |         |         |        
|                                               | Net Income                                                                            |                                                                       | $                                                            | 33,424                                                  |        |         | $       | 36,462  |       
|                                               | Adjustments to reconcile net income to net cash
    provided by operating activities: |                                                                       |                                                              |                                                         |        |         |         |         |       
|                                               |                                                                                       | Depreciation and amortization                                         |                                                              |                                                         | 20,653 |         |         |         | 18,206 |        
|                                               |                                                                                       | Loss(gain) on disposition of assets                                   |                                                              |                                                         | (1,733 | )       |         |         | 2,028  |        
|                                               |                                                                                       | Write-down of impaired assets                                         |                                                              |                                                         | 408    |         |         |         |        |        
|                                               |                                                                                       | Deferred income taxes                                                 |                                                              |                                                         | 775    |         |         |         | 8,460  |        
|                                               |                                                                                       | Other, net                                                            |                                                              |                                                         | 962    |         |         |         | (156   | )      
|                                               |                                                                                       | Changes in operating assets and liabilities, net
    of acquisitions: |                                                              |                                                         |        |         |         |         |        |        
|                                               |                                                                                       |                                                                       | Accounts receivable                                          |                                                         |        | 7,367   |         |         |        | 22,328  |        
|                                               |                                                                                       |                                                                       | Inventories                                                  |                                                         |        | (1,584  | )       |         |        | 684     |        
|                                               |                                                                                       |                                                                       | Prepaid expenses and other assets                            |                                                         |        | (2,342  | )       |         |        | (3,191  | )      
|                                               |                                                                                       |                                                                       | Accounts payable, accrued expenses and other
    liabilities |                                                         |        | (18,380 | )       |         |        | (41,942 | )      
|                                               |                                                                                       |                                                                       | Income taxes                                                 |                                                         |        | (16,541 | )       |         |        | (22,781 | )      
|                                               |                                                                                       |                                                                       |                                                              |                                                         |        |         |         |        
|                                               |                                                                                       |                                                                       |                                                              | Net cash provided by operating activities               |        |         | 23,009  |         |        |         | 20,098  |  
|                                              
|Cash Flows From Investing Activities           |                                                                                       |                                                                       |                                                              |                                                         |        |         |         |        
|                                               | Net additions to property, plant and equipment                                        |                                                                       |                                                              | (16,308                                                 | )      |         |         | (15,281 | )     
|                                               | Cash outflows for acquisitions                                                        |                                                                       |                                                              | (25,068                                                 | )      |         |         | (637    | )     
|                                               | Proceeds from sale of fixed assets                                                    |                                                                       |                                                              | 1,985                                                   |        |         |         | 1,478   |       
|                                               |                                                                                       |                                                                       |                                                              |                                                         |        |         |         |        
|                                               |                                                                                       |                                                                       |                                                              | Net cash used in investing activities                   |        |         | (39,391 | )       |        |         | (14,440 | )
|                                              
|Cash Flows From Financing Activities           |                                                                                       |                                                                       |                                                              |                                                         |        |         |         |        
|                                               | Proceeds from issuance of debt                                                        |                                                                       |                                                              | 65,404                                                  |        |         |         | 34,102  |       
|                                               | Repayment of debt                                                                     |                                                                       |                                                              | (3,500                                                  | )      |         |         |         |       
|                                               | Additional investment from parent                                                     |                                                                       |                                                              | 21,522                                                  |        |         |         |         |       
|                                               | Distribution to parent                                                                |                                                                       |                                                              | (79,545                                                 | )      |         |         | (58,643 | )     
|                                               |                                                                                       |                                                                       |                                                              |                                                         |        |         |         |        
|                                               |                                                                                       |                                                                       |                                                              | Net cash provided by (used in) financing
    activities |        |         | 3,881   |         |        |         | (24,541 | )
|                                               |                                                                                       |                                                                       |                                                              |                                                         |        |         |         |        
|Decrease in cash and cash equivalents          |                                                                                       |                                                                       | (12,501                                                      | )                                                       |        |         | (18,883 | )      
|Cash and cash equivalents, beginning of period |                                                                                       |                                                                       | 23,963                                                       |                                                         |        |         | 27,831  |        
|                                               |                                                                                       |                                                                       |                                                              |                                                         |        |         |         |        
|Cash and cash equivalents, end of period       |                                                                                       | $                                                                     | 11,462                                                       |                                                         |        | $       | 8,948   |        
|                                               |                                                                                       |                                                                       |                                                              |                                                         |        |         |         |        

See Notes to Condensed Consolidated Financial
Statements.

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DEAN HOLDING COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS


March 31, 2004

(unaudited)




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

Basis of
Presentation The unaudited
Condensed Consolidated Financial Statements contained in this
Quarterly Report have been prepared on the same basis as the
Consolidated Financial Statements in our Annual Report on
Form 10-K for the year ended December 31, 2003. In our
opinion, we have made all necessary adjustments (which include
only normal recurring adjustments) in order to present fairly,
in all material respects, our consolidated financial position,
results of operations and cash flows as of the dates and for the
periods presented. Certain reclassifications have been made to
conform the prior years Consolidated Financial Statements
to current years classifications. Certain information and
footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting
principles have been omitted. Our results of operations for the
period ended March 31, 2004 may not be indicative of our
operating results for the full year. The Condensed Consolidated
Financial Statements contained in this Quarterly Report should
be read in conjunction with our 2003 Consolidated Financial
Statements contained in our Annual Report on Form 10-K as
filed with the Securities and Exchange Commission on
March 30, 2004.

Unless otherwise indicated, references in this
report to we, us or our
refer to Dean Holding Company and its subsidiaries, taken as a
whole.

We are a wholly-owned subsidiary of Dean Foods
Company. Dean Foods Company provides us with management support
in return for a management fee. The management fee is based on
budgeted annual expenses for Dean Foods Companys corporate
headquarters, a portion which is then allocated to us. Dean
Foods Company charged us management fees of $10.1 million
and $9.3 million for the three months ended March 31,
2004 and 2003. Our cash is available for use by, and is
regularly transferred to, Dean Foods Company at its discretion.
Cash that has been transferred to Dean Foods Company is included
in Receivable from Parent on our balance sheet.

Recently Adopted Accounting
Pronouncements In December
2003, the Financial Accounting Standards Board
(FASB) issued SFAS No. 132 (revised 2003),
Employers Disclosures about Pensions and Other
Postretirement Benefits to improve financial statement
disclosures for defined benefit plans. This standard requires
that companies provide more details about their plan assets,
benefit obligations, cash flows, benefit costs and other
relevant information. In addition to expanded annual
disclosures, we are required to report the various elements of
pension and other postretirement benefit costs on a quarterly
basis. SFAS No. 132 (revised 2003) is effective for
fiscal years ending after December 15, 2003, and for
quarters beginning after December 15, 2003. The expanded
disclosure requirements are included in this report.

Recently Issued Accounting
Pronouncements In January
2004, the FASB issued FASB Staff Position (FSP)
106-1, Accounting and Disclosure Requirements Related to
the Medicare Prescription Drug, Improvement and Modernization
Act of 2003 in response to a new law regarding
prescription drug benefits under Medicare as well as a federal
subsidy to sponsors of retiree health care benefit plans.
Currently, SFAS No. 106, Employers
Accounting for Postretirement Benefits Other Than Pensions
requires that changes in relevant law be considered in current
measurement of postretirement benefit costs. We are currently
evaluating the impact of the new law and will defer recognition,
as permitted by FSP 106-1, until authoritative guidance is
issued.

Shipping and Handling
Fees Our shipping and
handling costs are included in both costs of sales and selling
and distribution expense, depending on the nature of such cost.
Shipping and handling costs included in cost of sales reflect
inventory warehouse costs, product loading and handling costs
and costs associated with transporting finished products from
our manufacturing facilities to our own distribution

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warehouses. Shipping and handling costs in
selling and distribution expense consist primarily of route
delivery costs for both company-owned delivery routes and
independent distributor routes, to the extent that such
independent distributors are paid a delivery fee, and the cost
of shipping products to customers through third party carriers.
Shipping and handling costs that were recorded as a component of
selling and distribution expense were approximately
$107.6 million and $94.9 million during the first
quarter of 2004 and 2003, respectively.




|   |            
|-- | -----------
|2. | Acquisition

On January 26, 2004, the Dairy Group
acquired Ross Swiss Dairies, a dairy distributor based in Los
Angeles, California, which had net sales of approximately
$120 million in 2003. As a result of this acquisition, we
have increased the distribution capability of our Dairy Group in
southern California, allowing us to better serve our customers.
Ross Swiss Dairies has historically purchased a significant
portion of its products from other processors. We transitioned
the majority of Ross Swiss Dairies manufacturing needs
into our southern California plants in May 2004. We paid
approximately $21 million, including transaction costs, for
the purchase of Ross Swiss Dairies and funded the purchase price
with borrowings under Dean Foods Companys
receivables-backed facility.

We have not completed the final allocation of
purchase price to the fair values of assets and liabilities
acquired in the Ross Swiss transaction, or the related business
integration plan. We expect that the ultimate purchase price
allocation may include additional adjustments to the fair values
of depreciable tangible assets, identifiable intangible assets
and the carrying values of certain liabilities. Accordingly, to
the extent that such assessments indicate that the fair value of
the assets and liabilities differ from their preliminary
purchase price allocation, such difference would adjust the
amounts allocated to the assets and liabilities and would change
the amounts allocated to goodwill.



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

|                           |       |                |         |                 |  |   |         |         | 
|-------------------------- | ----- | -------------- | ------- | --------------- |  | - | ------- | ------- | 
|                           |       | At March 31,   |         | At December 31,
|                           |       | 2004           |         | 2003           
|                           |       |                |         |                
|                           |       |               
|                           |       | (In thousands)
|Raw materials and supplies |       | $              | 73,057  |                 |  | $ | 71,331  |        
|Finished goods             |       |                | 166,125 |                 |  |   | 162,980 |        
|                           |       |                |         |                 |  |   |         |        
|                           | Total |                | $       | 239,182         |  |   | $       | 234,311 | 
|                           |       |                |         |                 |  |   |         |        

Approximately $77.4 million and
$97.6 million of our inventory was accounted for under the
last-in, first-out (LIFO) method of accounting at
March 31, 2004 and December 31, 2003, respectively.
There was no material excess of current cost over the stated
value of LIFO inventories at either date.



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

Changes in the carrying amount of goodwill for
the three months ended March 31, 2004 are as follows:

|                                  |  |                |           |           |  |       |         |   |  |   |           |  
|--------------------------------- |  | -------------- | --------- | --------- |  | ----- | ------- | - |  | - | --------- | -
|                                  |  |                |           | Specialty |  |      
|                                  |  |                |           | Foods     |  |      
|                                  |  | Dairy Group    |           | Group     |  | Total
|                                  |  |                |           |           |  |      
|                                  |  |               
|                                  |  | (In thousands)
|Balance at December 31, 2003      |  | $              | 1,109,921 |           |  | $     | 311,790 |   |  | $ | 1,421,711 |  
|Acquisitions                      |  |                | 18,081    |           |  |       |         |   |  |   | 18,081    |  
|Purchasing accounting adjustments |  |                | 33        |           |  |       | (1,613  | ) |  |   | (1,580    | )
|                                  |  |                |           |           |  |       |         |   |  |   |           |  
|Balance at March 31, 2004         |  | $              | 1,128,035 |           |  | $     | 310,177 |   |  | $ | 1,438,212 |  
|                                  |  |                |           |           |  |       |         |   |  |   |           |  

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The gross carrying amount and accumulated
amortization of our intangible assets other than goodwill as of
March 31, 2004 and December 31, 2003 are as follows:

|                                         |                  |                   |         |                      |  |          |        |          |   |              |         |          |  |   |         |         |  |   |        |        |   |   |         |         | 
|---------------------------------------- | ---------------- | ----------------- | ------- | -------------------- |  | -------- | ------ | -------- | - | ------------ | ------- | -------- |  | - | ------- | ------- |  | - | ------ | ------ | - | - | ------- | ------- | 
|                                         |                  |                   |         |                     
|                                         |                  | At March 31, 2004 |         | At December 31, 2003
|                                         |                  |                   |         |                     
|                                         |                  | 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 |                   |         | 30,099               |  |          | $      | (7,356   | ) |              |         | 22,743   |  |   |         | 28,455  |  |   | $      | (6,514 | ) |   |         | 21,941  | 
|                                         |                  |                   |         |                      |  |          |        |          |   |              |         |          |  |   |         |         |  |   |        |        |   |   |         |        
|Total                                    |                  | $                 | 220,109 |                      |  | $        | (7,356 | )        |   | $            | 212,753 |          |  | $ | 218,465 |         |  | $ | (6,514 | )      |   | $ | 211,951 |        
|                                         |                  |                   |         |                      |  |          |        |          |   |              |         |          |  |   |         |         |  |   |        |        |   |   |         |        

Amortization expense on intangible assets for the
three months ended March 31, 2004 and 2003 was
$0.8 million and $1.2 million, respectively. Estimated
aggregate intangible asset amortization expense for the next
five years is as follows:

|     |  |   |              | 
|---- |  | - | ------------ | 
|2005 |  | $ | 3.2  million | 
|2006 |  |   | 3.2 million  | 
|2007 |  |   | 3.0 million  | 
|2008 |  |   | 3.0 million  | 
|2009 |  |   | 3.0 million  | 



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

|                                           |                      |                        |         |                      |         |             |       |          |  |   |         |        |         |  |           |   |  | 
|------------------------------------------ | -------------------- | ---------------------- | ------- | -------------------- | ------- | ----------- | ----- | -------- |  | - | ------- | ------ | ------- |  | --------- | - |  | 
|                                           |                      |                        |         |                     
|                                           |                      | At March 31, 2004      |         | At December 31, 2003
|                                           |                      |                        |         |                     
|                                           |                      | Amount                 |         | Interest             |         | Amount      |       | Interest
|                                           |                      | Outstanding            |         | Rate                 |         | Outstanding |       | Rate    
|                                           |                      |                        |         |                      |         |             |       |         
|                                           |                      |                       
|                                           |                      | (Dollars in thousands)
|$100 million senior notes maturing in 2005 |                      | $                      | 98,322  |                      |         |             | 6.750 | %        |  | $ | 98,006  |        |         |  | 6.750     | %
|$250 million senior notes maturing in 2007 |                      |                        | 250,378 |                      |         |             | 8.150 |          |  |   | 250,402 |        |         |  | 8.150     |  
|$200 million senior notes maturing in 2009 |                      |                        | 186,533 |                      |         |             | 6.625 |          |  |   | 186,070 |        |         |  | 6.625     |  
|$150 million senior notes maturing in 2017 |                      |                        | 126,407 |                      |         |             | 6.900 |          |  |   | 126,185 |        |         |  | 6.900     |  
|Receivables-backed facility                |                      |                        | 190,586 |                      |         |             | 1.580 |          |  |   | 125,174 |        |         |  | 1.838     |  
|Industrial development revenue bond        |                      |                        | 8,200   |                      |         |             | 1.110 |          |  |   | 11,700  |        |         |  | 1.35-1.40 |  
|Other                                      |                      |                        | 186     |                      |         |             |       |          |  |   | 34      |        |         |  |           |  
|                                           |                      |                        |         |                      |         |             |       |          |  |   |         |        |         |  |           |  
|                                           |                      |                        | 860,612 |                      |         |             |       |          |  |   | 797,571 |        |         |  |           |  
|                                           | Less current portion |                        |         | (33                  | )       |             |       |          |  |   |         | (3,509 | )       |  |           |   | 
|                                           |                      |                        |         |                      |         |             |       |          |  |   |         |        |         |  |           |  
|                                           |                      | Total                  |         | $                    | 860,579 |             |       |          |  |   |         | $      | 794,062 |  |           |   |  | 
|                                           |                      |                        |         |                      |         |             |       |          |  |   |         |        |         |  |           |  

Senior
Notes We had
$700 million (face value) of senior notes outstanding at
March 31, 2004. The related indentures do not contain
financial covenants but they do contain certain restrictions
including a prohibition against us and our subsidiaries granting
liens on our material real estate interests and a prohibition
against granting liens on the stock of our subsidiaries. The
indentures also place certain restrictions on our ability to
divest assets not in the ordinary course of business. At the
date of our acquisition by Dean Foods Company, our long-term
debt was re-valued to its current market value. The adjustment
to fair value is reflected as a discount on senior notes in our
Consolidated Financial Statements.

Receivables-Backed
Facility We participate in
Dean Foods Companys $500 million receivables
securitization facility. Certain of our subsidiaries sell their
accounts receivable to wholly-owned special

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purpose entities intended to be
bankruptcy-remote. These special purpose entities then transfer
the receivables to a third party asset-backed commercial paper
conduit sponsored by major financial institutions. The assets
and liabilities of these special purpose entities are fully
reflected on our balance sheet, and the securitization is
treated as a borrowing for accounting purposes. The
receivables-backed facility bears interest at a variable rate
based on the commercial paper yield, as defined in the agreement.


Industrial Development Revenue
Bond We have an industrial
development revenue bond outstanding, which is secured by first
mortgages on the related real property and equipment. Interest
on this bond is due semiannually at an interest rate that varies
based on market conditions.

Other
Other obligations include various promissory notes for the
purchase of property, plant and equipment. The various
promissory notes payable provide for interest at varying rates
and are payable in monthly installments of principal and
interest until maturity, when the remaining principal balances
are due.



|   |                     
|-- | --------------------
|6. | Comprehensive Income

Comprehensive income consists of net income plus
all other changes in equity from non-owner sources. Consolidated
comprehensive income was $34.4 million for the three months
ended March 31, 2004. The amounts of income tax
(expense) benefit allocated to each component of other
comprehensive income during the three months ended
March 31, 2004 are included below.

|                                                              |  |                |         |           |  |        |       |  |  |   |         |  
|------------------------------------------------------------- |  | -------------- | ------- | --------- |  | ------ | ----- |  |  | - | ------- | -
|                                                              |  | Pre-Tax        |         | Tax       |  |       
|                                                              |  | Income         |         | Benefit   |  | Net   
|                                                              |  | (Loss)         |         | (Expense) |  | Amount
|                                                              |  |                |         |           |  |       
|                                                              |  |               
|                                                              |  | (In thousands)
|Accumulated other comprehensive income,
    December 31, 2003 |  | $              | (15,906 | )         |  | $      | 5,458 |  |  | $ | (10,448 | )
|Cumulative translation adjustment arising during
    period   |  |                | 943     |           |  |        |       |  |  |   | 943     |  
|                                                              |  |                |         |           |  |        |       |  |  |   |         |  
|Accumulated other comprehensive income,
    March 31, 2004    |  | $              | (14,963 | )         |  | $      | 5,458 |  |  | $ | (9,505  | )
|                                                              |  |                |         |           |  |        |       |  |  |   |         |  



|   |                                                    
|-- | ---------------------------------------------------
|7. | Employee Retirement and Postretirement
    Benefits

Defined Benefit
Plans The benefits under
our defined benefit plans are based on years of service and
employee compensation.

|                               |                                |                    |       |        |   |   |       |        |  
|------------------------------ | ------------------------------ | ------------------ | ----- | ------ | - | - | ----- | ------ | -
|                               |                                |                   
|                               |                                | Three Months Ended
|                               |                                | March 31          
|                               |                                |                   
|                               |                                | 2004               |       | 2003  
|                               |                                |                    |       |       
|                               |                                |                   
|                               |                                | (In thousands)    
|Components of net period cost: |                                |                    |       |        |   |   |       |       
|                               | Service cost                   |                    | $     | 282    |   |   | $     | 251    |  
|                               | Interest cost                  |                    |       | 2,724  |   |   |       | 2,628  |  
|                               | Expected return on plan assets |                    |       | (1,699 | ) |   |       | (1,255 | )
|Amortizations:                 |                                |                    |       |        |   |   |       |       
|                               | Prior service cost             |                    |       | 126    |   |   |       | 125    |  
|                               | Unrecognized net loss          |                    |       | 75     |   |   |       | 54     |  
|                               | Effect of settlement           |                    |       | 225    |   |   |       |        |  
|                               |                                |                    |       |        |   |   |       |       
|Net periodic benefit cost      |                                | $                  | 1,733 |        |   | $ | 1,803 |       
|                               |                                |                    |       |        |   |   |       |       

We expect to contribute $30.6 million to our
pension plans during 2004.

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Postretirement
Benefits Certain of our
subsidiaries provide health care benefits to certain retirees
who are covered under specific group contract.

|                               |                       |                |     |      |  |   |     |     | 
|------------------------------ | --------------------- | -------------- | --- | ---- |  | - | --- | --- | 
|                               |                       |               
|                               |                       | Three Months  
|                               |                       | Ended         
|                               |                       | March 31      
|                               |                       |               
|                               |                       | 2004           |     | 2003
|                               |                       |                |     |     
|                               |                       |               
|                               |                       | (In thousands)
|Components of net period cost: |                       |                |     |      |  |   |     |    
|                               | Service cost          |                | $   | 241  |  |   | $   | 245 | 
|                               | Interest cost         |                |     | 232  |  |   |     | 170 | 
|Amortizations:                 |                       |                |     |      |  |   |     |    
|                               | Unrecognized net loss |                |     | 68   |  |   |     | 21  | 
|                               |                       |                |     |      |  |   |     |    
|Net periodic benefit cost      |                       | $              | 541 |      |  | $ | 436 |    
|                               |                       |                |     |      |  |   |     |    

We expect to contribute $2 million to our
postretirement health plans during 2004.



|   |                                            
|-- | -------------------------------------------
|8. | Plant Closing and Rationalization
    Costs

Plant Closing and Rationalization
Costs As part of an
overall rationalization and cost reduction program, we recorded
charges of $2.7 million during the first three months of
2004.

The charges recorded during the first three
months of 2004 are primarily related to the closing of two Dairy
Group manufacturing facilities in California, one of which was
closed in the first quarter of 2004 and one of which is
scheduled to close later this year.

These charges were accounted for in accordance
with SFAS No. 146, Accounting for Costs
Associated with Exit or Disposal Activities, which became
effective for us in January 2003. We expect to incur additional
charges of approximately $2.8 million including an
additional $0.3 million in workforce reduction costs,
$2.2 million in shutdown and other costs and
$0.2 million in lease obligation costs. The majority of
these additional charges are expected to be completed by
December of 2004.

The principal components of our overall
rationalization and cost reduction program include the following:



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Workforce reductions as a result of plant
    closings, plant rationalizations and consolidation of
    administrative functions;                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|
| |  | Shutdown costs, including those costs that are
    necessary to prepare the 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 were 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. Divestitures of closed
    facilities has not resulted in significant modification to the
    estimate of fair value.

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Activity with respect to plant closing and
rationalization is summarized below:

|              |                                  |                |   |                    |  |            |   |       |   |  |   |        |   |  |   |       | 
|------------- | -------------------------------- | -------------- | - | ------------------ |  | ---------- | - | ----- | - |  | - | ------ | - |  | - | ----- | 
|              |                                  |                |   |                    |  |           
|              |                                  | Accrued        |   | Three Months Ended |  | Accrued   
|              |                                  | Charges at     |   | March 31, 2004     |  | Charges at
|              |                                  | December 31,   |   |                    |  | March 31, 
|              |                                  | 2003           |   | Charges            |  | Payments   |   | 2004 
|              |                                  |                |   |                    |  |            |   |      
|              |                                  |               
|              |                                  | (In thousands)
|Cash charges: |                                  |                |   |                    |  |            |   |       |   |  |   |        |   |  |   |      
|              | Workforce reduction costs        |                | $ | 3,547              |  |            | $ | (240  | ) |  | $ | (1,861 | ) |  | $ | 1,446 | 
|              | Shutdown costs                   |                |   |                    |  |            |   | 921   |   |  |   | (921   | ) |  |   |       | 
|              | Lease obligations after shutdown |                |   |                    |  |            |   | 271   |   |  |   | (104   | ) |  |   | 167   | 
|              | Other                            |                |   |                    |  |            |   | 1,342 |   |  |   | (1,342 | ) |  |   |       | 
|              |                                  |                |   |                    |  |            |   |       |   |  |   |        |   |  |   |      
|              | Subtotal                         |                | $ | 3,547              |  |            |   | 2,294 |   |  | $ | (4,228 | ) |  | $ | 1,613 | 
|              |                                  |                |   |                    |  |            |   |       |   |  |   |        |   |  |   |      
|              | Noncash charges:                 |                |   |                    |  |            |   |       |   |  |   |        |   |  |   |       | 
|              | Write down of assets             |                |   |                    |  |            |   | 408   |   |  |   |        |   |  |   |       | 
|              |                                  |                |   |                    |  |            |   |       |   |  |   |        |   |  |   |      
|              | Total                            |                |   |                    |  |            | $ | 2,702 |   |  |   |        |   |  |   |       | 
|              |                                  |                |   |                    |  |            |   |       |   |  |   |        |   |  |   |      

There have not been significant adjustments to
the plans and the majority of future cash requirements to reduce
the liability at March 31, 2004 are expected to be
completed within a year.

Transaction Closing Costs As part of our acquisition by Dean
Foods Company, we accrued costs in 2002 pursuant to a plan to
exit certain activities and businesses in order to rationalize
production and reduce costs and inefficiencies. As part of this
plan we closed two Specialty Foods Group plants, in Atkins,
Arkansas and Cairo, Georgia, and one Dairy Group plant in
Escondido, California. We also eliminated our administrative
offices, closed Dairy Group distribution depots in Parker Ford,
Pennsylvania and Camp Hill, Pennsylvania, shut down two pickle
tank yards and relocated production between plants as part of
our overall integration and efficiency efforts. During the first
quarter of 2004 we recorded certain adjustments to reduce the
liability by approximately $1.5 million related to the
closures in our Specialty Foods Group segment. These adjustments
also reduced goodwill.

The principal components of the plans include the
following:



| |   |                                                                                                                                                   
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Workforce reductions as a result of plant
    closings, plant rationalizations and consolidation of
    administrative functions and offices;     
|
| |  | Shutdown costs, including those costs that are
    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.

Activity with respect to these liabilities for
the first three months of 2004 is summarized below:

|                          |  |                |       |                    |  |             |      |      |  |   |        |   |  |   |       | 
|------------------------- |  | -------------- | ----- | ------------------ |  | ----------- | ---- | ---- |  | - | ------ | - |  | - | ----- | 
|                          |  |                |       |                    |  |            
|                          |  | Accrued        |       | Three Months Ended |  | Accrued    
|                          |  | Charges at     |       | March 31, 2004     |  | Charges at 
|                          |  | December 31,   |       |                    |  | March 31,  
|                          |  | 2003           |       | Payments           |  | Adjustments |      | 2004
|                          |  |                |       |                    |  |             |      |     
|                          |  |               
|                          |  | (In thousands)
|Workforce reduction costs |  | $              | 2,181 |                    |  | $           | (83  | )    |  | $ | (456   | ) |  | $ | 1,642 | 
|Shutdown costs            |  |                | 4,064 |                    |  |             | (115 | )    |  |   | (1,016 | ) |  |   | 2,933 | 
|                          |  |                |       |                    |  |             |      |      |  |   |        |   |  |   |       | 
|Total                     |  | $              | 6,245 |                    |  | $           | (198 | )    |  | $ | (1,472 | ) |  | $ | 4,575 | 
|                          |  |                |       |                    |  |             |      |      |  |   |        |   |  |   |       | 



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

Leases
We lease certain property, plant and equipment used in our
operations under operating lease agreements. Such leases, which
are primarily for machinery, equipment and vehicles, have lease
terms ranging from 1 to 20 years. Certain of the operating
lease agreements require the payment of additional

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##### Table of Contents



rentals for maintenance, along with additional
rentals based on miles driven or units produced. Certain leases
require us to guarantee a minimum value of the leased asset at
the end of the lease. Our maximum exposure under those
guarantees is not a material amount.


Guaranty of Dean Foods Companys
Obligations Under Its Senior Credit
Facility Certain of Dean
Foods Companys subsidiaries, including us, are required to
guarantee Dean Foods Companys indebtedness under its
senior credit facility. We have pledged substantially all of our
assets (other than our real property and our ownership interests
in our subsidiaries) as security for our guaranty. At
March 31, 2004 the senior credit facility provided for a
$1 billion multi-currency revolving line of credit (which
provides for borrowings up to $200 million in euros), a
Tranche A $1 billion term loan and a Tranche B
$750 million term loan. At March 31, 2004 there were
outstanding term loan borrowings of $1.63 billion under
this facility, and $240.4 million outstanding under the
revolving line of credit. Letters of credit in the aggregate
amount of $117 million were issued but undrawn. At
March 31, 2004 approximately $642.6 million was
available for future borrowings under Dean Foods Companys
revolving credit facility. Dean Foods Company is currently in
compliance with all covenants contained in their credit
agreement.

Amounts outstanding under Dean Foods
Companys revolver and Dean Foods Companys
Tranche A term loan bear interest at a rate per annum equal
to one of the following rates, at Dean Foods Companys
option:



| |   |                                                                                                                                                                                                                                                                                                                                                              
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | a base rate equal to the higher of the Federal
    Funds rate plus 50 basis points or the prime rate, plus a
    margin that varies from 0 to 75 basis points, depending on
    Dean Foods Companys leverage ratio (which is computed as
    the ratio of indebtedness to EBITDA, as such terms are defined
    in Dean Foods Companys credit agreement) or
|
| |  | the London Interbank Offering Rate
    (LIBOR) divided by the product of one minus the
    Eurodollar Reserve Percentage, plus a margin that varies from
    125 to 200 basis points, depending on Dean Foods
    Companys leverage ratio (as defined in Dean Foods
    Companys credit agreement).                                                      

EBITDA is defined in Dean Foods Companys
credit agreement for any period as the sum of (i) net
income (excluding extraordinary items) after taxes for such
period as determined in accordance with GAAP, plus (ii) an
amount which, in the determination of such net income, has been
deducted for (a) all interest expense, including the
interest component under capital leases and the implied interest
component under our receivables-backed facility, plus net
amounts payable (or minus net amounts receivable) under hedging
agreements, minus interest income for such period, in each case
as determined in accordance with GAAP, (b) total federal,
state, local and foreign income, value added and similar taxes,
(c) depreciation, amortization expense and other noncash
charges, (d) pro forma cost savings add-backs resulting
from non-recurring charges related to acquisitions to the extent
permitted under the credit agreement and under
Regulation S-X of the Securities Exchange Act of 1934 or as
approved by the representative of the lenders and (e) other
adjustments reasonably acceptable to the representative of the
lenders.

Borrowings under Dean Foods Companys
Tranche B term loan bear interest at a rate per annum equal
to one of the following rates, at Dean Foods Companys
option:



| |   |                                                                                                                                               
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------
| |  | a base rate equal to the higher of the Federal
    Funds rate plus 50 basis points or the prime rate, plus a
    margin of 75 basis points, or
|
| |  | LIBOR divided by the product of one minus the
    Eurodollar Reserve Percentage, plus a margin of 200 basis
    points.                       

As of March 31, 2004, Dean Foods Company had
interest rate swap agreements in place that hedged
$1.13 billion of their borrowings under this facility at an
average rate of 4.32%, plus the applicable interest rate margin.

Principal payments are required on Dean Foods
Companys Tranche A term loan as follows:



| |   |                                                                                       
| | - | --------------------------------------------------------------------------------------
| |  | $37.5 million quarterly beginning on
    September 30, 2003 through December 31, 2004;
|
| |  | $43.75 million quarterly on March 31,
    2005 through December 31, 2005;             

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| |   |                                                                       
| | - | ----------------------------------------------------------------------
| |  | $50 million quarterly on March 31, 2006
    through December 31, 2006;
|
| |  | $62.5 million quarterly on March 31,
    2007 and June 30, 2007; and  
|
| |  | A final payment of $275 million on
    July 15, 2007.                 

Principal payments are required on the
Tranche B term loan as follows:



| |   |                                                                                        
| | - | ---------------------------------------------------------------------------------------
| |  | $1.875 million quarterly beginning on
    September 30, 2003 through December 31, 2007;
|
| |  | $358.1 million on each of March 31,
    2008 and July 15, 2008.                        

No principal payments are due on the
$1 billion line of credit until maturity on July 15,
2007.

Dean Foods Companys credit agreement also
requires mandatory principal prepayments upon the occurrence of
certain asset dispositions not in the ordinary course of
business.

The senior credit facility contains various
financial and other restrictive covenants and requires that Dean
Foods Company maintain certain financial ratios, including a
leverage ratio (computed as the ratio of the aggregate
outstanding principal amount of indebtedness to EBITDA and an
interest coverage ratio (computed as the ratio of EBITDA to
interest expense). In addition, this facility requires that Dean
Foods Company maintain a minimum level of net worth (as defined
by Dean Foods Companys credit agreement).

For the period from December 31, 2003
through March 31, 2005, Dean Foods Companys leverage
ratio must be less than or equal to 4 to 1. Beginning
April 1, 2005, Dean Foods Companys leverage ratio,
calculated according to the definitions contained in the credit
agreement, must be less than or equal to 3.75 to 1. As of
March 31, 2004, Dean Foods Companys leverage ratio,
calculated according to the definitions contained in the credit
agreement, was 3.34 to 1.

EBITDA, as used in Dean Foods Companys
credit agreement, is not intended to represent cash flow from
operations as defined by GAAP and should not be used as an
alternative to net income as an indicator of their operating
performance or to cash flow as a measure of their liquidity.
Moreover, EBITDA is a term used by many companies to mean many
different things. Therefore, neither Dean Foods Companys
EBITDA nor their leverage ratio, calculated under their credit
agreement, should be compared to any other companys EBITDA
or leverage ratio. We present Dean Foods Companys leverage
ratio in this discussion not as a measure of their liquidity or
performance but only to demonstrate their level of compliance
with their credit agreement.

Dean Foods Companys interest coverage ratio
must be greater than or equal to 3 to 1. As of March 31,
2004, Dean Foods Companys interest coverage ratio,
calculated according to the definitions contained in the credit
agreement, was 5.58 to 1.

Dean Foods Companys consolidated net worth
must be greater than or equal to $1.75 billion, as
increased each quarter (beginning with the quarter ended
December 31, 2003) by an amount equal to 50% of its
consolidated net income for the quarter, plus 50% of the amount
by which stockholders equity is increased by certain
equity issuances. As of March 31, 2004, the minimum net
worth requirement was $1.89 billion, and Dean Foods
Companys actual net worth (as defined in the credit
agreement) was $2.65 billion.

The credit facility is secured by liens on
substantially all of Dean Foods Companys domestic assets
(including ours and those of our subsidiaries, but excluding the
capital stock of our subsidiaries and the real property owned by
us and our subsidiaries).

The agreement contains standard default triggers
including without limitation: failure to maintain compliance
with the financial and other covenants contained in the
agreement, default on certain of Dean Foods Companys other
debt, a change in control and certain other material adverse
changes in their business. The agreement does not contain any
default triggers based on Dean Foods Companys debt rating.

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---



##### Table of Contents



Litigation, Investigations and
Audits We and our
subsidiaries are parties from time to time to certain other
claims, litigation, audits and investigations. In our opinion,
the settlement of any such currently pending or threatened
matter is not expected to have a material adverse impact on our
financial position, results of operations or cash flows.



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

Segment
Data We currently have two
reportable segments: Dairy Group and Specialty Foods Group.

Our Dairy Group segment manufactures, markets and
distributes a wide variety of branded and private label
dairy case products, such as milk, cream, ice cream,
cultured dairy products and juices to retailers distributors,
foodservice outlets, schools and governmental entities across
the United States.

Specialty Foods Group is the nations
leading pickle processor, and one of the largest manufacturers
and sellers of powdered non-dairy coffee creamers in the United
States. The Specialty Foods Group also manufactures and sells a
variety of speciality foods, such as powdered ingredients,
aseptic sauces and nutritional beverages.

We evaluate the performance of our segments based
on operating profit or loss before gains (losses) on sale of
assets, plant closing and rationalization costs and foreign
exchange gains (losses). Therefore, the measure of segment
profit or loss presented below is before such items.

The accounting policies of the segments are the
same as those described in the summary of significant accounting
policies set forth in Note 1 to our 2003 Consolidated
Financial Statements contained in our 2003 Annual Report on
Form 10-K.

The amounts in the following tables are obtained
from reports used by our executive management team and do not
include any allocated income taxes or management fees. There are
no significant non-cash items reported in segment profit or loss
other than depreciation and amortization.

|                                 |                                         |                    |   |         |   |  |   |         |  
|-------------------------------- | --------------------------------------- | ------------------ | - | ------- | - |  | - | ------- | -
|                                 |                                         |                   
|                                 |                                         | Three Months Ended
|                                 |                                         | March 31          
|                                 |                                         |                   
|                                 |                                         | 2004               |   | 2003   
|                                 |                                         |                    |   |        
|                                 |                                         |                   
|                                 |                                         | (In thousands)    
|Net sales to external customers: |                                         |                    |   |         |   |  |   |        
|                                 | Dairy Group                             |                    | $ | 827,683 |   |  | $ | 756,125 |  
|                                 | Specialty Foods Group                   |                    |   | 165,483 |   |  |   | 162,938 |  
|                                 |                                         |                    |   |         |   |  |   |        
|                                 | Total                                   |                    | $ | 993,166 |   |  | $ | 919,063 |  
|                                 |                                         |                    |   |         |   |  |   |        
|Operating income:                |                                         |                    |   |         |   |  |   |        
|                                 | Dairy Group                             |                    | $ | 60,894  |   |  | $ | 60,897  |  
|                                 | Specialty Foods Group                   |                    |   | 19,306  |   |  |   | 23,191  |  
|                                 | Corporate/ Other                        |                    |   | (11,775 | ) |  |   | (11,638 | )
|                                 |                                         |                    |   |         |   |  |   |        
|                                 | Segment operating income                |                    |   | 68,425  |   |  |   | 72,450  |  
|                                 | Plant closing and rationalization costs |                    |   | 2,702   |   |  |   |         |  
|                                 |                                         |                    |   |         |   |  |   |        
|                                 | Total                                   |                    | $ | 65,723  |   |  | $ | 72,450  |  
|                                 |                                         |                    |   |         |   |  |   |        

-14-



---



##### Table of Contents



|        |                       |                |   |           |  |  |   |           | 
|------- | --------------------- | -------------- | - | --------- |  |  | - | --------- | 
|        |                       |               
|        |                       | At March 31   
|        |                       |               
|        |                       | 2004           |   | 2003     
|        |                       |                |   |          
|        |                       |               
|        |                       | (In thousands)
|Assets: |                       |                |   |           |  |  |   |          
|        | Dairy Group           |                | $ | 2,214,559 |  |  | $ | 2,135,607 | 
|        | Specialty Foods Group |                |   | 622,630   |  |  |   | 597,396   | 
|        | Corporate/ Other      |                |   | 91,962    |  |  |   | 98,537    | 
|        |                       |                |   |           |  |  |   |          
|        | Total                 |                | $ | 2,929,151 |  |  | $ | 2,831,540 | 
|        |                       |                |   |           |  |  |   |          

Substantially all of our business is within the
United States.

Significant
Customers Our Dairy Group
and Specialty Foods Group segments had one customer that
represented greater than 10% of their sales in the first quarter
of 2004. Approximately 13.2% of our consolidated sales in the
first quarter of 2004 were to that same customer.

11.     Subsequent
Event

Dean Foods Companys Senior Credit
Facility On April 5,
2004, Dean Foods Company amended their senior credit facility to
add a Tranche C term loan in the amount of
$400 million, which will mature in July 2008. Borrowings
under Dean Foods Companys Tranche C term loan bear
interest at a rate per annum equal to one of the following
rates, at their option:



| |   |                                                                                                                                               
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------
| |  | a base rate equal to the higher of the Federal
    Funds rate plus 50 basis points or the prime rate, plus a
    margin of 50 basis points, or
|
| |  | LIBOR divided by the product of one minus the
    Eurodollar Reserve Percentage, plus a margin of 175 basis
    points.                       

The amendment also added a $250 million
accordion feature to Dean Foods Companys
revolving line of credit. This feature allows Dean Foods Company
to expand their revolving line of credit from $1 billion to
$1.25 billion if they are in compliance with all of the
terms of their credit facility, and they can show that they will
continue to be in compliance with the financial covenants after
giving effect to the increase. The accordion feature only gives
Dean Foods Company the ability to request increases to the
revolver; the lenders are not obligated to increase their
revolving credit commitments.

-15-



---



##### Table of Contents








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

We are a wholly-owned subsidiary of Dean Foods
Company. Our operations consist of two segments: Dairy Group and
Specialty Foods Group. Our Dairy Group is part of the Dairy
Group segment of Dean Foods Company and our Specialty Foods
Group segment comprises the entirety of Dean Foods
Companys Specialty Foods Group segment.

As permitted by General Instruction H to
Form 10-Q, in lieu of providing the information required by
Item 2, we are providing only the information required by
General Instruction H(2)(a).

Results of Operations

The following table presents certain information
concerning our results of operations, including information
presented as a percentage of net sales.

|                              |                                              |                                    |         |         |         |         |       |         |      |   |         |         |         |  |       |      |      | 
|----------------------------- | -------------------------------------------- | ---------------------------------- | ------- | ------- | ------- | ------- | ----- | ------- | ---- | - | ------- | ------- | ------- |  | ----- | ---- | ---- | 
|                              |                                              |                                   
|                              |                                              | Quarter Ended March 31            
|                              |                                              |                                   
|                              |                                              |                                    |         |        
|                              |                                              | 2004                               |         | 2003   
|                              |                                              |                                    |         |        
|                              |                                              | Dollars                            |         | Percent |         | Dollars |       | Percent
|                              |                                              |                                    |         |         |         |         |       |        
|                              |                                              |                                   
|                              |                                              | (Dollars in thousands)            
|Net sales                     |                                              | $                                  | 993,166 |         |         |         | 100.0 | %       |      | $ | 919,063 |         |         |  | 100.0 | %   
|Cost of sales                 |                                              |                                    | 749,570 |         |         |         | 75.5  |         |      |   | 684,098 |         |         |  | 74.4  |     
|                              |                                              |                                    |         |         |         |         |       |         |      |   |         |         |         |  |       |     
|Gross profit                  |                                              |                                    | 243,596 |         |         |         | 24.5  |         |      |   | 234,965 |         |         |  | 25.6  |     
|Operating costs and expenses: |                                              |                                    |         |         |         |         |       |         |      |   |         |         |         |  |       |     
|                              | Selling and distribution                     |                                    |         | 139,742 |         |         |       | 14.1    |      |   |         | 128,270 |         |  |       | 14.0 |     
|                              | General and administrative                   |                                    |         | 34,799  |         |         |       | 3.5     |      |   |         | 33,070  |         |  |       | 3.6  |     
|                              | Amortization expense                         |                                    |         | 630     |         |         |       | 0.1     |      |   |         | 1,175   |         |  |       | 0.1  |     
|                              | Plant closing and rationalization costs, net |                                    |         | 2,702   |         |         |       | 0.2     |      |   |         |         |         |  |       |      |     
|                              |                                              |                                    |         |         |         |         |       |         |      |   |         |         |         |  |       |     
|                              |                                              | Total operating costs and expenses |         |         | 177,873 |         |       |         | 17.9 |   |         |         | 162,515 |  |       |      | 17.7 | 
|                              |                                              |                                    |         |         |         |         |       |         |      |   |         |         |         |  |       |     
|Total operating income        |                                              | $                                  | 65,723  |         |         |         | 6.6   | %       |      | $ | 72,450  |         |         |  | 7.9   | %   
|                              |                                              |                                    |         |         |         |         |       |         |      |   |         |         |         |  |       |     

Quarter Ended March 31, 2004 Compared
to Quarter Ended March 31, 2003  Consolidated
Results

Net
Sales Consolidated net
sales increased approximately 8.1% to $993.2 million during
the first quarter of 2004 from $919.1 million during the
first quarter of 2003. Net sales by segment are shown in the
table below.

|                      |       |                        |         |         |  |            |         |            |  |   |        |        |  |  |     |     |  
|--------------------- | ----- | ---------------------- | ------- | ------- |  | ---------- | ------- | ---------- |  | - | ------ | ------ |  |  | --- | --- | -
|                      |       |                       
|                      |       | Quarter Ended March 31
|                      |       |                       
|                      |       | 2004                   |         | 2003    |  | $ Increase |         | % Increase
|                      |       |                        |         |         |  |            |         |           
|                      |       |                       
|                      |       | (Dollars in thousands)
|Dairy Group           |       | $                      | 827,683 |         |  | $          | 756,125 |            |  | $ | 71,558 |        |  |  | 9.5 | %  
|Specialty Foods Group |       |                        | 165,483 |         |  |            | 162,938 |            |  |   | 2,545  |        |  |  | 1.6 |    
|                      |       |                        |         |         |  |            |         |            |  |   |        |        |  |  |     |    
|                      | Total |                        | $       | 993,166 |  |            | $       | 919,063    |  |   | $      | 74,103 |  |  |     | 8.1 | %
|                      |       |                        |         |         |  |            |         |            |  |   |        |        |  |  |     |    

The change in net sales was due to the following:

|                      |       |                                  |        |                 |  |          |        |        |  |   |        |        | 
|--------------------- | ----- | -------------------------------- | ------ | --------------- |  | -------- | ------ | ------ |  | - | ------ | ------ | 
|                      |       |                                 
|                      |       | Quarter Ended March 31, 2004 vs.
|                      |       | Quarter Ended March 31, 2003    
|                      |       |                                 
|                      |       |                                  |        | Pricing, Volume |  |         
|                      |       |                                  |        | and Product     |  | Total   
|                      |       | Acquisitions                     |        | Mix Changes     |  | Increase
|                      |       |                                  |        |                 |  |         
|                      |       |                                 
|                      |       | (In thousands)                  
|Dairy Group           |       | $                                | 37,057 |                 |  | $        | 34,501 |        |  | $ | 71,558 |       
|Specialty Foods Group |       |                                  | 1,588  |                 |  |          | 957    |        |  |   | 2,545  |       
|                      |       |                                  |        |                 |  |          |        |        |  |   |        |       
|                      | Total |                                  | $      | 38,645          |  |          | $      | 35,458 |  |   | $      | 74,103 | 
|                      |       |                                  |        |                 |  |          |        |        |  |   |        |       

-16-



---



##### Table of Contents



See  Results by Segment
for more information.

Cost of
Sales All expenses
incurred to bring a product to completion are included in cost
of sales, such as raw material, ingredient and packaging costs;
labor costs; plant and equipment costs, including costs to
operate and maintain our coolers and freezers; and costs
associated with transporting our finished products from our
manufacturing facilities to our own distribution facilities. Our
cost of sales ratio was 75.5% in the first quarter of 2004
compared to 74.4% in the first quarter of 2003. Increased raw
material costs affected both of our segments in 2004.

Operating Costs and
Expenses Our operating
expenses increased approximately $15.4 million during the
first quarter of 2004 as compared to the same period in the
prior year, primarily due to acquisitions, which represented
approximately $9.4 million of the increase, and due to a
$2.7 million increase in plant closing and rationalization
costs. Our operating expense ratio was 17.9% in the first
quarter of 2004 compared to 17.7% during the first quarter of
2003.

Operating
Income Operating income
during the first quarter of 2004 was $65.7 million, a
decrease of $6.8 million from the first quarter of 2003
operating income of $72.5 million. Our operating margin in
the first quarter of 2004 was 6.6% compared to 7.9% in the first
quarter of 2003. Our operating margin decreased primarily as a
result of higher raw material costs, the effect of increased
sales and increased plant closing and rationalization costs. See
 Results by Segment for more information.

Other (Income)
Expense Total other
expense decreased by $1.4 million in the first quarter of
2004 compared to the first quarter of 2003. Interest expense
increased to $13.7 million in the first quarter of 2004
from $13.5 million in the first quarter of 2003. This
increase was the result of higher debt in the first quarter of
2004 compared to the same period in the prior year. Other
operating income increased $1.7 million in the first
quarter of 2004 compared to this same period in the prior year
primarily due to a gain on the sale of a facility in the
Southwest region of our Dairy Group.

Income
Taxes Income tax expense
was recorded at an effective rate of 37.9% in the first quarter
of 2004 compared to 38.4% in the first quarter of 2003. Our tax
rate varies as the mix of earnings contributed by our various
business units changes, and as tax savings initiatives are
adopted.



| |                                                                                                   
| | --------------------------------------------------------------------------------------------------
| | Quarter Ended March 31, 2004 Compared
    to Quarter Ended March 31, 2003  Results by
    Segment

Dairy Group 

|                               |  |                        |         |         |  |         |       |         |  |   |         |  |  |  |       |  
|------------------------------ |  | ---------------------- | ------- | ------- |  | ------- | ----- | ------- |  | - | ------- |  |  |  | ----- | -
|                               |  |                       
|                               |  | Quarter Ended March 31
|                               |  |                       
|                               |  |                        |         |        
|                               |  | 2004                   |         | 2003   
|                               |  |                        |         |        
|                               |  | Dollars                |         | Percent |  | Dollars |       | Percent
|                               |  |                        |         |         |  |         |       |        
|                               |  |                       
|                               |  | (Dollars in thousands)
|Net sales                      |  | $                      | 827,683 |         |  |         | 100.0 | %       |  | $ | 756,125 |  |  |  | 100.0 | %
|Cost of sales                  |  |                        | 621,075 |         |  |         | 75.0  |         |  |   | 562,347 |  |  |  | 74.4  |  
|                               |  |                        |         |         |  |         |       |         |  |   |         |  |  |  |       |  
|Gross profit                   |  |                        | 206,608 |         |  |         | 25.0  |         |  |   | 193,778 |  |  |  | 25.6  |  
|Operating costs and expenses   |  |                        | 145,714 |         |  |         | 17.6  |         |  |   | 132,881 |  |  |  | 17.5  |  
|                               |  |                        |         |         |  |         |       |         |  |   |         |  |  |  |       |  
|Total segment operating income |  | $                      | 60,894  |         |  |         | 7.4   | %       |  | $ | 60,897  |  |  |  | 8.1   | %
|                               |  |                        |         |         |  |         |       |         |  |   |         |  |  |  |       |  

-17-



---



##### Table of Contents



The Dairy Groups net sales increased by
approximately $187 million, or 10.6%, in the first quarter
of 2004 versus the first quarter of 2003. The change in net
sales from the first quarter of 2003 to the first quarter of
2004 was due to the following:

|               |                         |                       |       |         |   |  |     |      |  
|-------------- | ----------------------- | --------------------- | ----- | ------- | - |  | --- | ---- | -
|               |                         | Dollars               |       | Percent
|               |                         |                       |       |        
|               |                         |                      
|               |                         | (Dollars in millions)
|2003 Net sales |                         | $                     | 756.1 |         |   |  |     |     
|               | Acquisitions            |                       |       | 37.1    |   |  |     | 4.9  | %
|               | Volume                  |                       |       | (4.3    | ) |  |     | (0.6 | )
|               | Pricing and product mix |                       |       | 38.8    |   |  |     | 5.2  |  
|               |                         |                       |       |         |   |  |     |     
|2004 Net sales |                         | $                     | 827.7 |         |   |  | 9.5 | %   
|               |                         |                       |       |         |   |  |     |     

The most significant cause of the net increase in
the Dairy Groups net sales was price increases. In
general, we change the prices that we charge our customers for
fluid dairy products on a monthly basis, as the costs of our raw
materials fluctuate. The increase in net sales due to price and
product mix shown in the above table primarily results from
higher raw milk costs in the first quarter of 2004 compared to
the first quarter of 2003. These price increases due to
increases in the cost of raw milk were offset somewhat by price
concessions that were granted in some markets in the summer of
2003 due to the competitive environment. The following table
sets forth the average monthly Class I mover
and average monthly Class II minimum prices for raw skim
milk and butterfat for the first quarter of 2004 compared to the
first quarter of 2003:

|                                  |  |                         |      |      |  |          |      |     |  |  |    |  
|--------------------------------- |  | ----------------------- | ---- | ---- |  | -------- | ---- | --- |  |  | -- | -
|                                  |  |                        
|                                  |  | Quarter Ended March 31*
|                                  |  |                        
|                                  |  | 2004                    |      | 2003 |  | % Change
|                                  |  |                         |      |      |  |         
|Class I raw skim milk mover(3)    |  | $                       | 6.66 | (1)  |  | $        | 6.30 | (1) |  |  | 6  | %
|Class I butterfat mover(3)        |  |                         | 1.53 | (2)  |  |          | 1.18 | (2) |  |  | 30 |  
|Class II raw skim milk minimum(4) |  |                         | 6.64 | (1)  |  |          | 7.00 | (1) |  |  | (5 | )
|Class II butterfat minimum(4)     |  |                         | 1.92 | (2)  |  |          | 1.16 | (2) |  |  | 66 |  



---



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

The other primary cause of the increase in the
Dairy Groups net sales was acquisitions. The Dairy Group
acquired Ross Swiss Dairies in January 2004, which contributed a
total of $37.1 million in sales during the first quarter of
2004.

Volume sales of all products, net of the effect
of acquisitions, fell 0.6% in the first quarter of 2004 compared
to the first quarter of 2003, primarily due to decreased demand.

The Dairy Groups cost of sales ratio was
higher in the first quarter of 2004 compared to the first
quarter of 2003 primarily due to the increase in raw milk costs
compared to the prior year.

The Dairy Groups operating expense ratio
was flat in the first quarter of 2004 and 2003 due to higher
sales dollars as a result of higher raw milk prices which were
offset by higher operating expenses. Operating expense dollars
increased approximately $12.8 million during the first
quarter of 2004 compared

-18-



---



##### Table of Contents



to the first quarter of 2003. The increase was
primarily due to the acquisition of Ross Swiss Dairies, which
contributed approximately $9.4 million in operating costs.


Specialty Foods Group 

|                               |  |                        |         |         |  |         |       |         |  |   |         |  |  |  |       |  
|------------------------------ |  | ---------------------- | ------- | ------- |  | ------- | ----- | ------- |  | - | ------- |  |  |  | ----- | -
|                               |  |                       
|                               |  | Quarter Ended March 31
|                               |  |                       
|                               |  |                        |         |        
|                               |  | 2004                   |         | 2003   
|                               |  |                        |         |        
|                               |  | Dollars                |         | Percent |  | Dollars |       | Percent
|                               |  |                        |         |         |  |         |       |        
|                               |  |                       
|                               |  | (Dollars in thousands)
|Net sales                      |  | $                      | 165,483 |         |  |         | 100.0 | %       |  | $ | 162,938 |  |  |  | 100.0 | %
|Cost of sales                  |  |                        | 128,715 |         |  |         | 77.8  |         |  |   | 122,381 |  |  |  | 75.1  |  
|                               |  |                        |         |         |  |         |       |         |  |   |         |  |  |  |       |  
|Gross profit                   |  |                        | 36,768  |         |  |         | 22.2  |         |  |   | 40,557  |  |  |  | 24.9  |  
|Operating costs and expenses   |  |                        | 17,462  |         |  |         | 10.5  |         |  |   | 17,366  |  |  |  | 10.7  |  
|                               |  |                        |         |         |  |         |       |         |  |   |         |  |  |  |       |  
|Total segment operating income |  | $                      | 19,306  |         |  |         | 11.7  | %       |  | $ | 23,191  |  |  |  | 14.2  | %
|                               |  |                        |         |         |  |         |       |         |  |   |         |  |  |  |       |  

The Specialty Foods Groups net sales
increased by $2.5 million, or 1.6%, in the first quarter of
2004 versus the first quarter of 2003. The change in net sales
from the first quarter of 2003 to the first quarter of 2004 was
due to the following:

|               |                         |                       |       |            |   |  |     |      |  
|-------------- | ----------------------- | --------------------- | ----- | ---------- | - |  | --- | ---- | -
|               |                         | Dollars               |       | Percentage
|               |                         |                       |       |           
|               |                         |                      
|               |                         | (Dollars in millions)
|2003 Net sales |                         | $                     | 162.9 |            |   |  |     |     
|               | Acquisitions            |                       |       | 1.6        |   |  |     | 1.0  | %
|               | Volume                  |                       |       | (2.0       | ) |  |     | (1.2 | )
|               | Pricing and product mix |                       |       | 3.0        |   |  |     | 1.8  |  
|               |                         |                       |       |            |   |  |     |     
|2004 Net sales |                         | $                     | 165.5 |            |   |  | 1.6 | %   
|               |                         |                       |       |            |   |  |     |     

The increase in sales was due primarily to
increased pricing on non-dairy coffee creamers. The Specialty
Foods Groups sales were also affected by the acquisition
of the Cremorapowdered non-dairy coffee creamer business
in December 2003.

The increases in pricing were substantially
offset by a 1% decline in pickle volumes in the first quarter of
2004 compared to the first quarter of 2003 due to the bankruptcy
of a large customer. Aseptic product volumes also declined by
15% during the first quarter of 2004 compared to the same period
of the prior year due to reduced sales to certain customers as a
result of the relocation of certain production lines. These
decreases were partially offset by an increase in unit volumes
of nutritional beverages due to increased demand.

The Specialty Foods Groups cost of sales
ratio increased in the first quarter of 2004. Approximately
$3.7 million of this increase was due to substantially
higher commodity costs, particularly soybean oil, casein, and
cheese, as well as increases in glass and other packaging costs.

Operating expenses for the Specialty Foods Group
remained flat, and the operating expense ratio improved slightly
due to increased sales.






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

Quarterly Controls Evaluation and Related CEO
and CFO Certifications

We conducted an evaluation of the effectiveness
of the design and operation of our disclosure controls and
procedures (Disclosure Controls) as of the end of the
period covered by this Quarterly Report. The controls evaluation
was done under the supervision and with the participation of
management, including our Chief Executive Officer (CEO) and
Chief Financial Officer (CFO).

Attached as exhibits to this quarterly report are
certifications of the CEO and the CFO, which are required in
accordance with Rule 13a-14 of the Exchange Act. This
Controls and Procedures section

-19-



---



##### Table of Contents



includes the information concerning the controls
evaluation referred to in the certifications and it should be
read in conjunction with the certifications for a more complete
understanding of the topics presented.


Definition of Disclosure Controls

Disclosure Controls are controls and procedures
designed to reasonably assure that information required to be
disclosed in our reports filed with the Securities and Exchange
Commission (the SEC) is recorded, processed,
summarized and reported within the time periods specified in the
SECs rules and forms. Disclosure Controls are also
designed to reasonably assure that such information is
accumulated and communicated to our management, including the
CEO and CFO, as appropriate to allow timely decisions regarding
required disclosure. Our Disclosure Controls include components
of our internal control over financial reporting, which consists
of control processes designed to provide reasonable assurance
regarding the reliability of our financial reporting and the
preparation of financial statements in accordance with US
generally accepted accounting principles.

Limitations on the Effectiveness of
Controls

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

Scope of the Controls Evaluation

Our evaluations of our Disclosure Controls
include reviews of the controls objectives and design, our
implementation of the controls and the effect of the controls on
the information generated for use in our SEC filings. In the
course of our controls evaluations, we seek to identify data
errors, controls problems or acts of fraud and confirm that
appropriate corrective actions, including process improvements,
are undertaken. Many of the components of our Disclosure
Controls are evaluated on an ongoing basis by Dean Foods
Companys Audit Services department. The overall goals of
these various evaluation activities are to monitor our
Disclosure Controls, and to modify them as necessary. Our intent
is to maintain the Disclosure Controls as dynamic systems that
change as conditions warrant.

Conclusions

Based upon our most recent controls evaluation,
our CEO and CFO have concluded that, as of the end of the period
covered by this Quarterly Report, our Disclosure Controls were
effective to provide reasonable assurance that material
information is made known to management, particularly during the
period when our periodic reports are being prepared. In the
first quarter of 2004, there was no change in our internal
control over financial reporting that has materially affected,
or is reasonably likely to materially affect, our internal
control over financial reporting.

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##### Table of Contents






Part II  Other
Information






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

(a) 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

(b) Form 8-Ks

None

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##### Table of Contents



SIGNATURES

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



| |                                                  
| | -------------------------------------------------
| | DEAN HOLDING COMPANY                             
|
| | /s/ Barry A. Fromberg                            
| |                                                  
| | Barry A. Fromberg                                
| | Executive Vice President, Chief Financial Officer
| | (Principal Accounting Officer)                   

May 14, 2004

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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