##### 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 June 30,
    2003
|                                                
|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(State or other jurisdiction of
    incorporation or organization) |  | 75-2932967(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



|                                           |                                                                                               |  |  |  |  |  |  | 
|------------------------------------------ | --------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|Table of Contents                         
|Part I -- Financial Information           
|                                           | Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
|                                           | Item 4. Controls and Procedures                                                              
|Part II -- Other Information              
|                                           | Item 6. Exhibits and Reports on Form 8-K                                                     
|SIGNATURES                                
|EX-31.1 Certification of CEO - Section 302
|EX-31.2 Certification of CFO - Section 302
|EX-32.1 Certification of CEO - Section 906
|EX-32.2 Certification of CFO - Section 906



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##### Table of Contents






Table of Contents

|                                   |                                                                                                   |      |  |    | 
|---------------------------------- | ------------------------------------------------------------------------------------------------- | ---- |  | -- | 
|                                   |                                                                                                   | Page
|                                   |                                                                                                   |     
|Part I  Financial
    Information |                                                                                                   |      |  |   
|                                   | Item 1  Financial Statements                                                                     |      |  | 3  | 
|                                   | Item 2  Managements Discussion
    and Analysis of Financial Condition and Results of Operations |      |  | 15 | 
|                                   | Item 4  Controls and Procedures                                                                  |      |  | 18 | 
|Part II  Other
    Information    |                                                                                                   |      |  |   
|                                   | Item 6  Exhibits and Reports on
    Form 8-K                                                     |      |  | 19 | 

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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)


|                                         |                                                       |                                          |                            |              |   |           |           |           |   |           | 
|---------------------------------------- | ----------------------------------------------------- | ---------------------------------------- | -------------------------- | ------------ | - | --------- | --------- | --------- | - | --------- | 
|                                         |                                                       | June 30,                                 |                            | December 31,
|                                         |                                                       | 2003                                     |                            | 2002        
|                                         |                                                       |                                          |                            |             
|                                         |                                                       | (unaudited)                              |                            |             
|Assets                                   |                                                       |                                          |                            |              |   |           |           |          
|                                        
|Current assets:                          |                                                       |                                          |                            |              |   |           |           |          
|                                         | Cash and cash equivalents                             |                                          | $                          | 15,146       |   |           | $         | 27,831    |  
|                                         | Accounts receivable, net                              |                                          |                            | 238,954      |   |           |           | 247,432   |  
|                                         | Inventories                                           |                                          |                            | 213,296      |   |           |           | 218,124   |  
|                                         | Deferred income taxes                                 |                                          |                            | 86,093       |   |           |           | 93,018    |  
|                                         | Prepaid expenses and other current assets             |                                          |                            | 19,404       |   |           |           | 20,651    |  
|                                         |                                                       |                                          |                            |              |   |           |           |          
|                                         |                                                       |                                          | Total current assets       |              |   | 572,893   |           |           |   | 607,056   | 
|Property, plant and equipment, net       |                                                       |                                          | 623,474                    |              |   |           | 615,573   |          
|Goodwill                                 |                                                       |                                          | 1,425,864                  |              |   |           | 1,425,398 |          
|Identifiable intangible and other assets |                                                       |                                          | 225,239                    |              |   |           | 227,796   |          
|                                         |                                                       |                                          |                            |              |   |           |           |          
|                                         |                                                       |                                          | Total                      |              | $ | 2,847,470 |           |           | $ | 2,875,823 | 
|                                         |                                                       |                                          |                            |              |   |           |           |          
|                                        
|                                         |                                                       | Liabilities and Stockholders
    Equity |                            |              |   |           |           |           |   |          
|                                        
|Current liabilities:                     |                                                       |                                          |                            |              |   |           |           |          
|                                         | Accounts payable and accrued expenses                 |                                          | $                          | 367,205      |   |           | $         | 406,798   |  
|                                         | Income taxes payable                                  |                                          |                            | 35,673       |   |           |           | 58,987    |  
|                                         | Current portion of long-term debt                     |                                          |                            | 307          |   |           |           | 307       |  
|                                         |                                                       |                                          |                            |              |   |           |           |          
|                                         |                                                       |                                          | Total current liabilities  |              |   | 403,185   |           |           |   | 466,092   | 
|Long-term debt                           |                                                       |                                          | 773,363                    |              |   |           | 727,873   |          
|Other long-term liabilities              |                                                       |                                          | 133,076                    |              |   |           | 147,503   |          
|Deferred income taxes                    |                                                       |                                          | 181,570                    |              |   |           | 166,302   |          
|Commitments and contingencies (Note 8)   |                                                       |                                          |                            |              |   |           |           |          
|Stockholders equity:                    |                                                       |                                          |                            |              |   |           |           |          
|                                         | Common stock, 1,000 shares issued and
    outstanding |                                          |                            |              |   |           |           |           |  
|                                         | Additional paid-in capital                            |                                          |                            | 1,356,816    |   |           |           | 1,356,816 |  
|                                         | Retained earnings                                     |                                          |                            | 230,213      |   |           |           | 149,643   |  
|                                         | Receivable from parent                                |                                          |                            | (230,346     | ) |           |           | (138,331  | )
|                                         | Accumulated other comprehensive income                |                                          |                            | (407         | ) |           |           | (75       | )
|                                         |                                                       |                                          |                            |              |   |           |           |          
|                                         |                                                       |                                          | Total stockholders equity |              |   | 1,356,276 |           |           |   | 1,368,053 | 
|                                         |                                                       |                                          |                            |              |   |           |           |          
|                                         |                                                       |                                          | Total                      |              | $ | 2,847,470 |           |           | $ | 2,875,823 | 
|                                         |                                                       |                                          |                            |              |   |           |           |          

See Notes to Condensed Consolidated Financial
Statements.

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##### Table of Contents



DEAN HOLDING COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF
INCOME


(In thousands)


|                              |                                       |                                    |         |                  |         |      |         |         |         |   |           |         |         |   |           |         |         | 
|----------------------------- | ------------------------------------- | ---------------------------------- | ------- | ---------------- | ------- | ---- | ------- | ------- | ------- | - | --------- | ------- | ------- | - | --------- | ------- | ------- | 
|                              |                                       |                                    |         |                 
|                              |                                       | Three Months Ended                 |         | Six Months Ended
|                              |                                       | June 30                            |         | June 30         
|                              |                                       |                                    |         |                 
|                              |                                       | 2003                               |         | 2002             |         | 2003 |         | 2002   
|                              |                                       |                                    |         |                  |         |      |         |        
|                              |                                       |                                    |         |                  |         |     
|                              |                                       |                                    |         | (unaudited)     
|                              |                                       | (unaudited)                        |         |                 
|Net sales                     |                                       | $                                  | 949,438 |                  |         | $    | 994,367 |         |         | $ | 1,868,501 |         |         | $ | 1,950,852 |        
|Cost of sales                 |                                       |                                    | 704,661 |                  |         |      | 745,951 |         |         |   | 1,388,759 |         |         |   | 1,475,396 |        
|                              |                                       |                                    |         |                  |         |      |         |         |         |   |           |         |         |   |           |        
|Gross profit                  |                                       |                                    | 244,777 |                  |         |      | 248,416 |         |         |   | 479,742   |         |         |   | 475,456   |        
|Operating costs and expenses: |                                       |                                    |         |                  |         |      |         |         |         |   |           |         |         |   |           |        
|                              | Selling and distribution              |                                    |         | 129,722          |         |      |         | 132,082 |         |   |           | 257,992 |         |   |           | 266,091 |        
|                              | General and administrative            |                                    |         | 29,357           |         |      |         | 38,240  |         |   |           | 62,427  |         |   |           | 69,147  |        
|                              | Amortization expense                  |                                    |         | 608              |         |      |         | 1,351   |         |   |           | 1,783   |         |   |           | 3,018   |        
|                              | Plant closing and restructuring costs |                                    |         | 525              |         |      |         |         |         |   |           | 525     |         |   |           |         |        
|                              |                                       |                                    |         |                  |         |      |         |         |         |   |           |         |         |   |           |        
|                              |                                       | Total operating costs and expenses |         |                  | 160,212 |      |         |         | 171,673 |   |           |         | 322,727 |   |           |         | 338,256 | 
|                              |                                       |                                    |         |                  |         |      |         |         |         |   |           |         |         |   |           |        
|Operating income              |                                       |                                    | 84,565  |                  |         |      | 76,743  |         |         |   | 157,015   |         |         |   | 137,200   |        
|Other (income) expense:       |                                       |                                    |         |                  |         |      |         |         |         |   |           |         |         |   |           |        
|                              | Interest expense, net                 |                                    |         | 13,736           |         |      |         | 14,237  |         |   |           | 27,306  |         |   |           | 28,317  |        
|                              | Other (income) expense, net           |                                    |         | (414             | )       |      |         | 77      |         |   |           | (697    | )       |   |           | (808    | )      
|                              |                                       |                                    |         |                  |         |      |         |         |         |   |           |         |         |   |           |        
|                              |                                       | Total other (income) expense       |         |                  | 13,322  |      |         |         | 14,314  |   |           |         | 26,609  |   |           |         | 27,509  | 
|                              |                                       |                                    |         |                  |         |      |         |         |         |   |           |         |         |   |           |        
|Income before income taxes    |                                       |                                    | 71,243  |                  |         |      | 62,429  |         |         |   | 130,406   |         |         |   | 109,691   |        
|Income taxes                  |                                       |                                    | 27,135  |                  |         |      | 23,796  |         |         |   | 49,836    |         |         |   | 42,201    |        
|                              |                                       |                                    |         |                  |         |      |         |         |         |   |           |         |         |   |           |        
|Net income                    |                                       | $                                  | 44,108  |                  |         | $    | 38,633  |         |         | $ | 80,570    |         |         | $ | 67,490    |        
|                              |                                       |                                    |         |                  |         |      |         |         |         |   |           |         |         |   |           |        

See Notes to Condensed Consolidated Financial
Statements.

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DEAN HOLDING COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS


(In thousands)


|                                                 |                                                                                       |                                                                       |                                                                 |                                           |        |         |         |         |        |         |         |  
|------------------------------------------------ | ------------------------------------------------------------------------------------- | --------------------------------------------------------------------- | --------------------------------------------------------------- | ----------------------------------------- | ------ | ------- | ------- | ------- | ------ | ------- | ------- | -
|                                                 |                                                                                       |                                                                      
|                                                 |                                                                                       | Six Months Ended                                                     
|                                                 |                                                                                       | June 30                                                              
|                                                 |                                                                                       |                                                                      
|                                                 |                                                                                       | 2003                                                                  |                                                                 | 2002                                     
|                                                 |                                                                                       |                                                                       |                                                                 |                                          
|                                                 |                                                                                       |                                                                      
|                                                 |                                                                                       | (unaudited)                                                          
|Cash flows from operating
    activities:        |                                                                                       |                                                                       |                                                                 |                                           |        |         |         |        
|                                                 | Net Income                                                                            |                                                                       | $                                                               | 80,570                                    |        |         | $       | 67,490  |       
|                                                 | Adjustments to reconcile net income to net cash
    provided by operating activities: |                                                                       |                                                                 |                                           |        |         |         |         |       
|                                                 |                                                                                       | Depreciation and amortization                                         |                                                                 |                                           | 36,228 |         |         |         | 36,682 |        
|                                                 |                                                                                       | Loss on disposition of assets                                         |                                                                 |                                           | 199    |         |         |         | 10     |        
|                                                 |                                                                                       | Deferred income taxes                                                 |                                                                 |                                           | 22,193 |         |         |         | (1,485 | )      
|                                                 |                                                                                       | Other, net                                                            |                                                                 |                                           | (429   | )       |         |         | (786   | )      
|                                                 |                                                                                       | Changes in operating assets and liabilities, net
    of acquisitions: |                                                                 |                                           |        |         |         |         |        |        
|                                                 |                                                                                       |                                                                       | Accounts receivable                                             |                                           |        | 8,074   |         |         |        | 16,023  |        
|                                                 |                                                                                       |                                                                       | Inventories                                                     |                                           |        | 4,883   |         |         |        | 15,718  |        
|                                                 |                                                                                       |                                                                       | Prepaid expenses and other assets                               |                                           |        | 2,078   |         |         |        | 14,444  |        
|                                                 |                                                                                       |                                                                       | Accounts payable and accrued expenses and other
    liabilities |                                           |        | (52,157 | )       |         |        | (56,684 | )      
|                                                 |                                                                                       |                                                                       | Income taxes                                                    |                                           |        | (23,314 | )       |         |        | 38,766  |        
|                                                 |                                                                                       |                                                                       |                                                                 |                                           |        |         |         |        
|                                                 |                                                                                       |                                                                       |                                                                 | Net cash provided by operating activities |        |         | 78,325  |         |        |         | 130,178 |  
|                                                
|Cash flows from investing
    activities:        |                                                                                       |                                                                       |                                                                 |                                           |        |         |         |        
|                                                 | Net additions to property, plant and equipment                                        |                                                                       |                                                                 | (43,188                                   | )      |         |         | (18,903 | )     
|                                                 | Cash outflows for acquisitions                                                        |                                                                       |                                                                 | (637                                      | )      |         |         | (17,156 | )     
|                                                 | Net proceeds from divestitures                                                        |                                                                       |                                                                 |                                           |        |         |         | 2,561   |       
|                                                 | Proceeds from sale of fixed assets                                                    |                                                                       |                                                                 | 1,889                                     |        |         |         | 198     |       
|                                                 |                                                                                       |                                                                       |                                                                 |                                           |        |         |         |        
|                                                 |                                                                                       |                                                                       |                                                                 | Net cash used in investing activities     |        |         | (41,936 | )       |        |         | (33,300 | )
|                                                
|Cash flows from financing
    activities:        |                                                                                       |                                                                       |                                                                 |                                           |        |         |         |        
|                                                 | Proceeds from issuance of debt                                                        |                                                                       |                                                                 | 43,672                                    |        |         |         |         |       
|                                                 | Repayment of debt                                                                     |                                                                       |                                                                 |                                           |        |         |         | (12,770 | )     
|                                                 | Net transfer to parent                                                                |                                                                       |                                                                 | (92,746                                   | )      |         |         | (78,722 | )     
|                                                 |                                                                                       |                                                                       |                                                                 |                                           |        |         |         |        
|                                                 |                                                                                       |                                                                       |                                                                 | Net cash used in financing activities     |        |         | (49,074 | )       |        |         | (91,492 | )
|                                                 |                                                                                       |                                                                       |                                                                 |                                           |        |         |         |        
|Increase (decrease) in cash and cash equivalents |                                                                                       |                                                                       | (12,685                                                         | )                                         |        |         | 5,386   |        
|Cash and cash equivalents, beginning of period   |                                                                                       |                                                                       | 27,831                                                          |                                           |        |         | 15,920  |        
|                                                 |                                                                                       |                                                                       |                                                                 |                                           |        |         |         |        
|Cash and cash equivalents, end of period         |                                                                                       | $                                                                     | 15,146                                                          |                                           |        | $       | 21,306  |        
|                                                 |                                                                                       |                                                                       |                                                                 |                                           |        |         |         |        

See Notes to Condensed Consolidated Financial
Statements.

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##### Table of Contents



DEAN HOLDING COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS


June 30, 2003

(unaudited)




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

Basis of
Presentation The unaudited
Condensed Consolidated Financial Statements contained in this
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, 2002. 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
our 2002 Consolidated Financial Statements to current
classifications. Certain information and footnote disclosures
normally included in financial statements prepared in accordance
with generally accepted accounting principles have been omitted.
The Condensed Consolidated Financial Statements contained in
this report should be read in conjunction with our 2002
Consolidated Financial Statements contained in our Annual Report
on Form 10-K as filed with the Securities and Exchange
Commission on March 27, 2003.

This Quarterly Report, including these notes, has
been written in accordance with the Securities and Exchange
Commissions Plain English guidelines. 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, which is then allocated among the segments of Dean
Foods Company. Dean Foods Company began charging us management
fees in the second quarter of 2002. Dean Foods Company charged
us management fees of $9.2 million and $9.0 million
for the three months ended June 30, 2003 and 2002. 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 on our balance sheet as
Receivable from parent.

Recently Adopted Accounting
Pronouncements In June
2001, Financial Accounting Standards Board (FASB)
issued Statement of Financial Accounting Standards
(SFAS) No. 143, Accounting for Asset
Retirement Obligations. This statement requires that the
fair value of a liability for an asset retirement obligation be
recognized in the period in which it is incurred if a reasonable
estimate of fair value can be made. The associated asset
retirement costs are capitalized as part of the carrying amount
of the long-lived asset. SFAS No. 143 became effective for
us January 1, 2003. The adoption of this pronouncement did
not have a material impact on our Consolidated Financial
Statements.

SFAS No. 145, Rescission of FASB
Statements No. 4, 44 and 64, Amendment of FASB Statement
No. 13 and Technical Corrections, was issued in April
2002 and is applicable to fiscal years beginning after
May 15, 2002. One of the provisions of this technical
statement is the rescission of SFAS No. 4,
Reporting Gains and Losses from Extinguishment of
Debt, whereby any gain or loss on the early extinguishment
of debt that was classified as an extraordinary item in prior
periods in accordance with SFAS No. 4, which does not
meet the criteria of an extraordinary item as defined by APB
Opinion 30, must be reclassified. Adoption of this standard
requires us to reclassify extraordinary losses previously
reported from the early extinguishment of debt as a component of
other expense.

In June 2002, FASB issued SFAS No. 146,
Accounting for Costs Associated with Exit or Disposal
Activities. This statement addresses financial accounting
and reporting for costs associated with exit or disposal
activities and nullifies Emerging Issues Task Force
(EITF) Issue No. 94-3, Liability
Recognition for Certain Employee Termination Benefits and Other
Costs to Exit an Activity (including Certain Costs Incurred in
Restructuring). The statement requires that a liability
for a cost associated with an exit or disposal activity be
recognized when the liability is incurred and is effective for
exit or

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disposal activities that are initiated after
December 31, 2002. Our adoption of this standard changes
the timing of the recognition of certain charges associated with
exit and disposal activities.


In November 2002, FASB issued FASB Interpretation
(FIN) No. 45, Guarantors Accounting
and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others. FIN No. 45
clarifies the requirements of SFAS No. 5
Accounting for Contingencies, relating to the
guarantors accounting for and disclosures of certain
guarantees issued. FIN No. 45 requires disclosure of
guarantees. It also requires liability recognition for the fair
value of guarantees made after December 31, 2002. We
adopted the liability recognition requirements of FIN
No. 45 effective January 1, 2003. The adoption of this
pronouncement did not have a material effect on our Consolidated
Financial Statements.

In January 2003, FASB issued FIN No. 46,
Consolidation of Variable Interest Entities. FIN
No. 46 clarifies the application of Accounting Research
Bulletin No. 51, Consolidated Financial
Statements, to certain entities in which equity investors
do not have the characteristics of a controlling financial
interest or in which equity investors do not bear the residual
economic risks. The interpretation applies to variable interest
entities (VIEs) created after January 31, 2003
and to VIEs in which an enterprise obtains an interest after
that date. It applies in the fiscal or interim period beginning
after June 15, 2003, to VIEs in which an enterprise holds a
variable interest that was acquired before February 1,
2003. We currently utilize a special purpose limited liability
entity to facilitate our receivable-backed loan. Since its
formation, this entity has been consolidated in our financial
statements for financial reporting purposes. Therefore, FIN
No. 46 will have no impact on our Consolidated Financial
Statements.

Recently Issued Accounting
Pronouncements In April of
2003, FASB issued SFAS No. 149, Amendment of
Statement 133 on Derivative Instruments and Hedging
Activities. This statement amends and clarifies financial
accounting and reporting for derivative instruments, including
derivative instruments embedded in other contracts and hedging
activities under SFAS No. 133, Accounting for
Derivative Instruments and Hedging Activities. This
statement requires that contracts with comparable
characteristics be accounted for similarly and is effective for
contracts entered into or modified after June 30, 2003. We
have no derivatives, therefore SFAS No. 149 will have
no impact on our Consolidated Financial Statements.

In May of 2003, FASB issued
SFAS No. 150, Accounting for Certain Financial
Instruments with Characteristics of Both Liabilities and
Equity. This statement requires that certain financial
instruments which had previously been classified as equity be
classified with liabilities. We have no outstanding securities
that meet the criteria of SFAS No. 150. Therefore,
SFAS No. 150 will have no impact on our Consolidated
Financial Statements.



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

|                           |       |                |         |                 |  |   |         |         | 
|-------------------------- | ----- | -------------- | ------- | --------------- |  | - | ------- | ------- | 
|                           |       | At June 30,    |         | At December 31,
|                           |       | 2003           |         | 2002           
|                           |       |                |         |                
|                           |       |               
|                           |       | (In thousands)
|Raw materials and supplies |       | $              | 71,147  |                 |  | $ | 68,570  |        
|Finished goods             |       |                | 142,149 |                 |  |   | 149,554 |        
|                           |       |                |         |                 |  |   |         |        
|                           | Total |                | $       | 213,296         |  |   | $       | 218,124 | 
|                           |       |                |         |                 |  |   |         |        

Approximately $63.5 million and
$97.3 million of our inventory was accounted for under the
last-in, first-out (LIFO) method of accounting at
June 30, 2003 and December 31, 2002, respectively.
There was no material excess of current cost over the stated
value of LIFO inventories at either date.

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

Changes in the carrying amount of goodwill for
the six months ended June 30, 2003 are as follows:

|                                  |  |                |           |           |  |       |         |  |  |   |           |  
|--------------------------------- |  | -------------- | --------- | --------- |  | ----- | ------- |  |  | - | --------- | -
|                                  |  |                |           | Specialty |  |      
|                                  |  | Dairy Group    |           | Foods     |  | Total
|                                  |  |                |           |           |  |      
|                                  |  |               
|                                  |  | (In thousands)
|Balance at December 31, 2002      |  | $              | 1,121,108 |           |  | $     | 304,290 |  |  | $ | 1,425,398 |  
|Acquisitions                      |  |                | 523       |           |  |       |         |  |  |   | 523       |  
|Purchasing accounting adjustments |  |                | (57       | )         |  |       |         |  |  |   | (57       | )
|                                  |  |                |           |           |  |       |         |  |  |   |           |  
|Balance at June 30, 2003          |  | $              | 1,121,574 |           |  | $     | 304,290 |  |  | $ | 1,425,864 |  
|                                  |  |                |           |           |  |       |         |  |  |   |           |  

The gross carrying amount and accumulated
amortization of our intangible assets other than goodwill as of
June 30, 2003 and December 31, 2002 are as follows:

|                                         |                  |                  |         |                      |  |          |        |          |   |              |         |          |  |   |         |         |  |   |        |        |   |   |         |         | 
|---------------------------------------- | ---------------- | ---------------- | ------- | -------------------- |  | -------- | ------ | -------- | - | ------------ | ------- | -------- |  | - | ------- | ------- |  | - | ------ | ------ | - | - | ------- | ------- | 
|                                         |                  |                  |         |                     
|                                         |                  | At June 30, 2003 |         | At December 31, 2002
|                                         |                  |                  |         |                     
|                                         |                  | Gross            |         |                      |  | Net      |        | Gross    |   |              |         | Net     
|                                         |                  | Carrying         |         | Accumulated          |  | Carrying |        | Carrying |   | Accumulated  |         | Carrying
|                                         |                  | Amount           |         | Amortization         |  | Amount   |        | Amount   |   | Amortization |         | Amount  
|                                         |                  |                  |         |                      |  |          |        |          |   |              |         |         
|                                         |                  |                 
|                                         |                  | (In thousands)  
|Intangible assets with indefinite lives: |                  |                  |         |                      |  |          |        |          |   |              |         |          |  |   |         |         |  |   |        |        |   |   |         |        
|                                         | Trademarks       |                  | $       | 187,710              |  |          | $      | 0        |   |              | $       | 187,710  |  |   | $       | 188,010 |  |   | $      | 0      |   |   | $       | 188,010 | 
|Intangible assets with finite lives:     |                  |                  |         |                      |  |          |        |          |   |              |         |          |  |   |         |         |  |   |        |        |   |   |         |        
|                                         | Customer-related |                  |         | 31,173               |  |          |        | (7,645   | ) |              |         | 23,528   |  |   |         | 31,173  |  |   |        | (5,532 | ) |   |         | 25,641  | 
|                                         |                  |                  |         |                      |  |          |        |          |   |              |         |          |  |   |         |         |  |   |        |        |   |   |         |        
|Total                                    |                  | $                | 218,883 |                      |  | $        | (7,645 | )        |   | $            | 211,238 |          |  | $ | 219,183 |         |  | $ | (5,532 | )      |   | $ | 213,651 |        
|                                         |                  |                  |         |                      |  |          |        |          |   |              |         |          |  |   |         |         |  |   |        |        |   |   |         |        

Amortization expense on intangible assets for the
three months ended June 30, 2003 and 2002 was
$0.8 million and $0.5 million, and $2.1 million
and $1.5 million for the six months ended June 30,
2003 and 2002, respectively. Estimated aggregate intangible
asset amortization expense for the next five years is as follows:

|     |  |   |              | 
|---- |  | - | ------------ | 
|2004 |  | $ | 3.2  million | 
|2005 |  |   | 3.2 million  | 
|2006 |  |   | 3.2 million  | 
|2007 |  |   | 3.0 million  | 
|2008 |  |   | 3.0 million  | 

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

|                                           |                      |                        |         |                      |         |             |             |          |  |   |         |      |         |  |             |   |  | 
|------------------------------------------ | -------------------- | ---------------------- | ------- | -------------------- | ------- | ----------- | ----------- | -------- |  | - | ------- | ---- | ------- |  | ----------- | - |  | 
|                                           |                      |                        |         |                     
|                                           |                      | At June 30, 2003       |         | At December 31, 2002
|                                           |                      |                        |         |                     
|                                           |                      | Amount                 |         | Interest             |         | Amount      |             | Interest
|                                           |                      | Outstanding            |         | Rate                 |         | Outstanding |             | Rate    
|                                           |                      |                        |         |                      |         |             |             |         
|                                           |                      |                       
|                                           |                      | (Dollars in thousands)
|$250 million senior notes maturing in 2007 |                      | $                      | 250,448 |                      |         |             | 8.150       | %        |  | $ | 250,493 |      |         |  | 8.150       | %
|$200 million senior notes maturing in 2009 |                      |                        | 185,170 |                      |         |             | 6.625       |          |  |   | 184,306 |      |         |  | 6.625       |  
|$150 million senior notes maturing in 2017 |                      |                        | 125,757 |                      |         |             | 6.900       |          |  |   | 125,346 |      |         |  | 6.900       |  
|$100 million senior notes maturing in 2005 |                      |                        | 97,394  |                      |         |             | 6.750       |          |  |   | 96,806  |      |         |  | 6.750       |  
|Receivables-backed loan                    |                      |                        | 97,172  |                      |         |             | 1.810       |          |  |   | 53,197  |      |         |  | 2.280       |  
|Industrial development revenue bonds       |                      |                        | 17,700  |                      |         |             | 1.10  1.25 |          |  |   | 18,000  |      |         |  | 1.65  1.90 |  
|Capitalized lease obligations and other    |                      |                        | 29      |                      |         |             |             |          |  |   | 32      |      |         |  |             |  
|                                           |                      |                        |         |                      |         |             |             |          |  |   |         |      |         |  |             |  
|                                           |                      |                        | 773,670 |                      |         |             |             |          |  |   | 728,180 |      |         |  |             |  
|                                           | Less current portion |                        |         | (307                 | )       |             |             |          |  |   |         | (307 | )       |  |             |   | 
|                                           |                      |                        |         |                      |         |             |             |          |  |   |         |      |         |  |             |  
|                                           |                      | Total                  |         | $                    | 773,363 |             |             |          |  |   |         | $    | 727,873 |  |             |   |  | 
|                                           |                      |                        |         |                      |         |             |             |          |  |   |         |      |         |  |             |  

Senior
Notes We had
$700 million (face value) of senior notes outstanding at
June 30, 2003. 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
Loan Dean Foods Company
has entered into a $400 million receivables securitization
facility pursuant to which certain of our subsidiaries sell
their accounts receivable to a wholly-owned special purpose
entity intended to be bankruptcy-remote. The special purpose
entity then transfers the receivables to a third-party
asset-backed commercial paper conduit sponsored by major
financial institutions. The assets and liabilities of this
entity are fully reflected on our balance sheet, and the
securitization is treated as a borrowing for accounting
purposes. The receivables-backed loan bears interest at a
variable rate based on the commercial paper yield, as defined in
the agreement.

Industrial Development Revenue
Bonds We have certain
industrial development revenue bonds outstanding, some of which
require nominal annual sinking fund redemptions. Typically,
these bonds are secured by irrevocable letters of credit issued
by financial institutions, along with first mortgages on the
related real property and equipment. Interest on these bonds is
due semiannually at interest rates that vary based on market
conditions.

Other
Obligations Other
obligations include various promissory notes for the purchase of
property, plant and equipment and capital lease obligations. 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. Capital lease obligations represent machinery and
equipment financing obligations which are payable in monthly
installments of principal and interest and are collateralized by
the related assets financed.

Letters of
Credit At June 30,
2003, $42.4 million of letters of credit were outstanding.
The majority of letters of credit were required by various
utilities and government entities for performance and insurance
guarantees.



|   |                     
|-- | --------------------
|5. | Comprehensive Income

Comprehensive income consists of net income plus
all other changes in equity from non-owner sources. Consolidated
comprehensive income was $43.9 million and
$80.2 million for the three-months and

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six-months periods ending June 30, 2003. The
amounts of income tax (expense) benefit allocated to each
component of other comprehensive income for the six months ended
June 30, 2003, is included below.


|                                                              |  |                |      |           |  |        |     |   |  |   |      |  
|------------------------------------------------------------- |  | -------------- | ---- | --------- |  | ------ | --- | - |  | - | ---- | -
|                                                              |  | Pre-Tax        |      | Tax       |  |       
|                                                              |  | Income         |      | Benefit   |  | Net   
|                                                              |  | (Loss)         |      | (Expense) |  | Amount
|                                                              |  |                |      |           |  |       
|                                                              |  |               
|                                                              |  | (In thousands)
|Accumulated other comprehensive income,
    December 31, 2002 |  | $              | (115 | )         |  | $      | 40  |   |  | $ | (75  | )
|Cumulative translation adjustment arising during
    period   |  |                | (241 | )         |  |        | 85  |   |  |   | (156 | )
|                                                              |  |                |      |           |  |        |     |   |  |   |      |  
|Accumulated other comprehensive income,
    March 31, 2003    |  |                | (356 | )         |  |        | 125 |   |  |   | (231 | )
|Cumulative translation adjustment arising during
    period   |  |                | (147 | )         |  |        | (29 | ) |  |   | (176 | )
|                                                              |  |                |      |           |  |        |     |   |  |   |      |  
|Accumulated other comprehensive income,
    June 30, 2003     |  | $              | (503 | )         |  | $      | 96  |   |  | $ | (407 | )
|                                                              |  |                |      |           |  |        |     |   |  |   |      |  



|   |                    
|-- | -------------------
|6. | Plant Closing Costs

Plant Closing
Costs As part of an
overall integration and cost reduction program, during the
second quarter of 2003, we recorded charges of $0.5 million
related to the organizational realignment of the Midwest region
of our Dairy Group. Charges for the second quarter of 2003
restructuring 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. Under SFAS 146, the timing of
certain costs associated with restructurings are accrued
differently than in the past. We expect to incur additional
charges related to the Midwest region organizational realignment
of approximately $0.6 million primarily for workforce
reduction costs. Cash outlays for these additional charges are
expected to be completed by June of 2004.

The principal component of our overall
integration and cost reduction program was workforce reductions
as a result of a consolidation of administrative functions. The
program includes an overall reduction of 37 employees who
were primarily regional and plant employees. All except
19 employees had been terminated as of June 30, 2003;

Activity with respect to plant closing costs
during the first half of 2003 is summarized below:

|              |                           |                |   |          |  |          |   |     |   |  |   |     | 
|------------- | ------------------------- | -------------- | - | -------- |  | -------- | - | --- | - |  | - | --- | 
|              |                           |                |   |          |  | At      
|              |                           |                |   |          |  | June 30,
|              |                           | Charges        |   | Payments |  | 2003    
|              |                           |                |   |          |  |         
|              |                           |               
|              |                           | (In thousands)
|Cash charges: |                           |                |   |          |  |          |   |     |   |  |   |    
|              | Workforce reduction costs |                | $ | 525      |  |          | $ | (10 | ) |  | $ | 515 | 

There have not been significant adjustments to
the plan.

As part of our acquisition by Dean Foods Company,
we accrued costs in 2002 pursuant to plans to exit certain
activities and operations of businesses in order to rationalize
production and reduce costs and inefficiencies. In connection
with our acquisition by Dean Foods Company, plants in Atkins,
Arkansas and Cairo, Georgia in the Specialty Foods segment and a
plant in Escondido, California in the Dairy Group were closed.
We have 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.

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, resulting in an overall
    reduction of 721 plant and administrative personnel. The
    costs incurred were charged against our acquisition liabilities
    for these costs. As of June 30, 2003, 10 employees had
    not yet been terminated;
|
| |  | Shutdown costs, including those costs that are
    necessary to clean and prepare the plant facilities for
    closure; and                                                                                                                                                                                                                                                                   

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| |   |                                                                                                                                                                         
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Costs incurred after shutdown such as lease
    obligations or termination costs, utilities and property taxes
    after shutdown of the plant or administrative office.

Activity with respect to these liabilities for
the first half of 2003 is summarized below:

|                          |  |                |        |             |  |          |     |          |  |   |        |   |  |   |        | 
|------------------------- |  | -------------- | ------ | ----------- |  | -------- | --- | -------- |  | - | ------ | - |  | - | ------ | 
|                          |  | At             |        |             |  |          |     | At      
|                          |  | December 31,   |        |             |  |          |     | June 30,
|                          |  | 2002           |        | Adjustments |  | Payments |     | 2003    
|                          |  |                |        |             |  |          |     |         
|                          |  |               
|                          |  | (In thousands)
|Workforce reduction costs |  | $              | 7,726  |             |  |          |     |          |  | $ | (4,752 | ) |  | $ | 2,974  | 
|Shutdown costs            |  |                | 8,208  |             |  | $        | 891 |          |  |   | (1,942 | ) |  |   | 7,157  | 
|                          |  |                |        |             |  |          |     |          |  |   |        |   |  |   |        | 
|Total                     |  | $              | 15,934 |             |  | $        | 891 |          |  | $ | (6,694 | ) |  | $ | 10,131 | 
|                          |  |                |        |             |  |          |     |          |  |   |        |   |  |   |        | 

These liabilities were established on
December 31, 2001 in connection with our acquisition by
Dean Foods Company. No other significant charges were accrued
for transaction-related closings.



|   |                           
|-- | --------------------------
|7. | Shipping and Handling Fees

Our shipping and handling costs are included in
both cost of sales and selling and distribution expense
depending on the nature of such costs. Shipping and handling
costs included in cost of sales reflect the cost of shipping
products to customers through third party carriers, inventory
warehouse costs and product loading and handling costs. Shipping
and handling costs included 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. Shipping and handling costs that were recorded as a
component of selling and distribution expense were approximately
$94.4 million and $189.3 million during the second
quarter and first half of 2003 and $93.1 million and
$188.8 million in the second quarter and first half of
2002, respectively.



|   |                              
|-- | -----------------------------
|8. | 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 rentals for
maintenance, along with additional rentals based on miles driven
or units produced.

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
$2.7 billion 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. The senior credit facility provides Dean Foods
Company with an $800 million revolving line of credit, a
Tranche A $900 million term loan and a Tranche B
$1 billion term loan. At June 30, 2003 there were
outstanding term loan borrowings of $1.76 billion under
this facility, plus $23.7 million that was outstanding
under the revolving line of credit. Letters of credit in the
aggregate amount of $109.3 million were issued but undrawn.
At June 30, 2003 approximately $667.0 million was
available for future borrowings under Dean Foods Companys
revolving credit facility. Dean Foods Company is currently in
compliance with all of the requirements contained in its credit
facility.

Amounts outstanding under Dean Foods
Companys revolving line of credit 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 25 to 150 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 the credit agreement) or

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| |   |                                                                                                                                                                                                                                                                                       
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The London Interbank Offering Rate
    (LIBOR) divided by the product of one minus the
    Eurodollar Reserve Percentage, plus a margin that varies from
    150 to 275 basis points, depending on Dean Foods
    Companys leverage ratio (as defined in the credit
    agreement).

Borrowings under the 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 that varies from 75 to 150 basis points, depending
    on Dean Foods Companys leverage ratio, or
|
| |  | LIBOR divided by the product of one minus the
    Eurodollar Reserve Percentage, plus a margin that varies from
    200 to 275 basis points, depending on Dean Foods
    Companys leverage ratio.                       

The blended interest rate in effect on borrowings
under the senior credit facility, including the applicable
interest rate margin, was 3.35% at June 30, 2003. However,
Dean Foods Company had interest rate swap agreements in place
that hedged $1.43 billion of their borrowings under this
facility at an average rate of 4.27%, plus the applicable
interest rate margin. Interest is payable quarterly or at the
end of the applicable interest period.

The agreement requires principal payments on the
Tranche A term loan as follows:



| |   |                                                                            
| | - | ---------------------------------------------------------------------------
| |  | $16.87 million quarterly from March 31,
    2002 through December 31, 2002;
|
| |  | $33.75 million quarterly from March 31,
    2003 through December 31, 2004;
|
| |  | $39.38 million quarterly from March 31,
    2005 through December 31, 2005;
|
| |  | $45.0 million quarterly from March 31,
    2006 through December 31, 2006; 
|
| |  | $56.25 million quarterly from March 31,
    2007 through June 30, 2007; and
|
| |  | A final payment of $112.5 million on
    July 15, 2007.                    

The agreement requires principal payments on the
Tranche B term loan as follows:



| |   |                                                                           
| | - | --------------------------------------------------------------------------
| |  | $1.25 million quarterly from March 31,
    2002 through December 31, 2002;
|
| |  | $2.5 million quarterly from March 31,
    2003 through December 31, 2007; 
|
| |  | A payment of $472.5 million on
    March 31, 2008; and                    
|
| |  | A final payment of $472.5 million on
    July 15, 2008.                   

No principal payments are due on the
$800 million line of credit until maturity on July 15,
2007.

The credit agreement also requires mandatory
principal prepayments in certain circumstances including without
limitation: (1) upon the occurrence of certain asset
dispositions not in the ordinary course of business and
(2) upon the occurrence of certain debt and equity
issuances when Dean Foods Companys leverage ratio is
greater than 3.75 to 1.0. The credit agreement
requires that Dean Foods Company prepay 50% of defined excess
cash flow for any fiscal year (beginning in 2003) in which their
leverage ratio at year end is greater than
3.75 to 1.0. As of June 30, 2003, Dean Foods
Companys leverage ratio was 3.3 to 1.0.

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 defined indebtedness to defined
EBITDA) and an interest coverage ratio (computed as the ratio of
defined EBITDA to interest expense). In addition, this facility
requires that Dean Foods Company maintain a minimum level of net
worth (as defined by the agreement).

-12-



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Dean Foods Companys leverage ratio must be
less than or equal to:

|                          |  |       |              | 
|------------------------- |  | ----- | ------------ | 
|Period                    |  | Ratio
|                          |  |      
|01-01-03 through 12-31-03 |  |       | 4.00 to 1.00 | 
|01-01-04 through 12-31-04 |  |       | 3.75 to 1.00 | 
|01-01-05 and thereafter   |  |       | 3.25 to 1.00 | 

Dean Foods Companys interest coverage ratio
must be greater than or equal to 3.00 to 1.00.

Dean Foods Companys consolidated net worth
must be greater than or equal to $1.2 billion, as increased
each quarter (beginning with the quarter ended March 31,
2002) by an amount equal to 50% of their consolidated net income
for the quarter, plus 75% of the amount by which
stockholders equity is increased by certain equity
issuances. As of June 30, 2003, the minimum net worth
requirement was $1.4 billion.

The facility also contains limitations on liens,
investments and the incurrence of additional indebtedness, and
prohibits certain dispositions of property and restricts certain
payments, including dividends. 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.

Litigation, Investigations and
Audits We and our
subsidiaries are parties, in the ordinary course of business, to
certain other claims, litigation, audits and investigations. We
believe we have adequate reserves for any liability we may incur
in connection with any such currently pending or threatened
matter. 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.



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

Segment
Data We currently have two
reportable segments: Dairy Group and Specialty Foods. Our Dairy
Group segment manufactures and distributes milk, ice cream and
ice cream novelties, half-and-half and whipping cream, cultured
dairy products, fruit juices, other flavored drinks, bottled
water, coffee creamers, dips and condensed milk. Specialty Foods
processes and sells pickles, relishes and peppers; powdered
products such as non-dairy coffee creamers; aseptic sauces and
puddings and nutritional beverages.

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 2002 Consolidated
Financial Statements contained in our 2002 Annual Report on
Form 10-K. We evaluate performance based on operating
profit not including non-recurring gains and losses and foreign
exchange gains and losses.

-13-



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##### Table of Contents



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 |   | Six Months Ended
|                                 |                  | June 30,           |   | June 30,        
|                                 |                  |                    |   |                 
|                                 |                  | 2003               |   | 2002             |   | 2003 |   | 2002   
|                                 |                  |                    |   |                  |   |      |   |        
|                                 |                  |                   
|                                 |                  | (In thousands)    
|Net sales to external customers: |                  |                    |   |                  |   |      |   |         |   |  |   |           |   |  |   |          
|                                 | Dairy Group      |                    | $ | 773,762          |   |      | $ | 817,003 |   |  | $ | 1,529,887 |   |  | $ | 1,612,274 |  
|                                 | Specialty Foods  |                    |   | 175,676          |   |      |   | 177,364 |   |  |   | 338,614   |   |  |   | 338,578   |  
|                                 |                  |                    |   |                  |   |      |   |         |   |  |   |           |   |  |   |          
|                                 | Total            |                    | $ | 949,438          |   |      | $ | 994,367 |   |  | $ | 1,868,501 |   |  | $ | 1,950,852 |  
|                                 |                  |                    |   |                  |   |      |   |         |   |  |   |           |   |  |   |          
|Operating income:                |                  |                    |   |                  |   |      |   |         |   |  |   |           |   |  |   |          
|                                 | Dairy Group(1)   |                    | $ | 69,041           |   |      | $ | 67,984  |   |  | $ | 129,938   |   |  | $ | 123,970   |  
|                                 | Specialty Foods  |                    |   | 27,018           |   |      |   | 25,367  |   |  |   | 50,845    |   |  |   | 46,154    |  
|                                 | Corporate/ Other |                    |   | (11,494          | ) |      |   | (16,608 | ) |  |   | (23,768   | ) |  |   | (32,924   | )
|                                 |                  |                    |   |                  |   |      |   |         |   |  |   |           |   |  |   |          
|                                 | Total            |                    | $ | 84,565           |   |      | $ | 76,743  |   |  | $ | 157,015   |   |  | $ | 137,200   |  
|                                 |                  |                    |   |                  |   |      |   |         |   |  |   |           |   |  |   |          

|        |                  |             |   |           |  |  |   |           | 
|------- | ---------------- | ----------- | - | --------- |  |  | - | --------- | 
|        |                  |            
|        |                  | At June 30,
|        |                  |            
|        |                  | 2003        |   | 2002     
|        |                  |             |   |          
|Assets: |                  |             |   |           |  |  |   |          
|        | Dairy Group      |             | $ | 2,156,034 |  |  | $ | 2,149,037 | 
|        | Specialty Foods  |             |   | 597,810   |  |  |   | 598,163   | 
|        | Corporate/ Other |             |   | 93,626    |  |  |   | 208,763   | 
|        |                  |             |   |           |  |  |   |          
|        | Total            |             | $ | 2,847,470 |  |  | $ | 2,955,963 | 
|        |                  |             |   |           |  |  |   |          



---



|    |                                                                                                                                            
|--- | -------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Operating income includes plant closing and
    restructuring costs of $0.5 million in the second quarter
    and first six months of 2003.

Substantially all of our business is within the
United States.

Significant
Customers Our Dairy Group
had one customer that represented greater than 10% of its sales
in the half of 2003. Approximately 11% of our consolidated sales
in the first half of 2003 were to that same customer.

-14-



---



##### 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. Dean Foods Company is the leading processor and
distributor of milk and other dairy products in the United
States, and a leading manufacturer of specialty foods. Our
operations consist of two segments: Dairy Group and Specialty
Foods. Our Dairy Group is part of the Dairy Group segment of
Dean Foods Company and our Specialty Foods segment comprises the
entirety of Dean Foods Companys Specialty Foods 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.

|                              |                                       |                                    |         |                           |         |         |       |         |      |         |         |         |         |         |       |         |      |   |           |         |         |  |       |      |      |   |           |         |         |  |       |      |      | 
|----------------------------- | ------------------------------------- | ---------------------------------- | ------- | ------------------------- | ------- | ------- | ----- | ------- | ---- | ------- | ------- | ------- | ------- | ------- | ----- | ------- | ---- | - | --------- | ------- | ------- |  | ----- | ---- | ---- | - | --------- | ------- | ------- |  | ----- | ---- | ---- | 
|                              |                                       |                                    |         |                          
|                              |                                       | Three Months Ended June 30,        |         | Six Months Ended June 30,
|                              |                                       |                                    |         |                          
|                              |                                       |                                    |         |                           |         |         |       |        
|                              |                                       | 2003                               |         | 2002                      |         | 2003    |       | 2002   
|                              |                                       |                                    |         |                           |         |         |       |        
|                              |                                       | Dollars                            |         | Percent                   |         | Dollars |       | Percent |      | Dollars |         | Percent |         | Dollars |       | Percent
|                              |                                       |                                    |         |                           |         |         |       |         |      |         |         |         |         |         |       |        
|                              |                                       |                                    |         |                           |         |         |       |         |      |        
|                              |                                       |                                    |         | (In thousands)           
|                              |                                       | (In thousands)                     |         |                          
|Net sales                     |                                       | $                                  | 949,438 |                           |         |         | 100.0 | %       |      | $       | 994,367 |         |         |         | 100.0 | %       |      | $ | 1,868,501 |         |         |  | 100.0 | %    |      | $ | 1,950,852 |         |         |  | 100.0 | %   
|Cost of sales                 |                                       |                                    | 704,661 |                           |         |         | 74.2  |         |      |         | 745,951 |         |         |         | 75.0  |         |      |   | 1,388,759 |         |         |  | 74.3  |      |      |   | 1,475,396 |         |         |  | 75.6  |     
|                              |                                       |                                    |         |                           |         |         |       |         |      |         |         |         |         |         |       |         |      |   |           |         |         |  |       |      |      |   |           |         |         |  |       |     
|Gross profit                  |                                       |                                    | 244,777 |                           |         |         | 25.8  |         |      |         | 248,416 |         |         |         | 25.0  |         |      |   | 479,742   |         |         |  | 25.7  |      |      |   | 475,456   |         |         |  | 24.4  |     
|Operating costs and expenses: |                                       |                                    |         |                           |         |         |       |         |      |         |         |         |         |         |       |         |      |   |           |         |         |  |       |      |      |   |           |         |         |  |       |     
|                              | Selling and distribution              |                                    |         | 129,722                   |         |         |       | 13.7    |      |         |         | 132,082 |         |         |       | 13.3    |      |   |           | 257,992 |         |  |       | 13.8 |      |   |           | 266,091 |         |  |       | 13.6 |     
|                              | General and administrative            |                                    |         | 29,357                    |         |         |       | 3.0     |      |         |         | 38,240  |         |         |       | 3.9     |      |   |           | 62,427  |         |  |       | 3.4  |      |   |           | 69,147  |         |  |       | 3.6  |     
|                              | Amortization expense                  |                                    |         | 608                       |         |         |       | 0.1     |      |         |         | 1,351   |         |         |       | .1      |      |   |           | 1,783   |         |  |       | 0.1  |      |   |           | 3,018   |         |  |       | .2   |     
|                              | Plant closing and restructuring costs |                                    |         | 525                       |         |         |       | 0.1     |      |         |         |         |         |         |       |         |      |   |           | 525     |         |  |       |      |      |   |           |         |         |  |       |      |     
|                              |                                       |                                    |         |                           |         |         |       |         |      |         |         |         |         |         |       |         |      |   |           |         |         |  |       |      |      |   |           |         |         |  |       |     
|                              |                                       | Total operating costs and expenses |         |                           | 160,212 |         |       |         | 16.9 |         |         |         | 171,673 |         |       |         | 17.3 |   |           |         | 322,727 |  |       |      | 17.3 |   |           |         | 338,256 |  |       |      | 17.4 | 
|                              |                                       |                                    |         |                           |         |         |       |         |      |         |         |         |         |         |       |         |      |   |           |         |         |  |       |      |      |   |           |         |         |  |       |     
|Total operating income        |                                       | $                                  | 84,565  |                           |         |         | 8.9   | %       |      | $       | 76,743  |         |         |         | 7.7   | %       |      | $ | 157,015   |         |         |  | 8.4   | %    |      | $ | 137,200   |         |         |  | 7.0   | %   
|                              |                                       |                                    |         |                           |         |         |       |         |      |         |         |         |         |         |       |         |      |   |           |         |         |  |       |      |      |   |           |         |         |  |       |     

Quarter Ended June 30, 2003 Compared
to Quarter Ended June 30, 2002

Net
Sales Consolidated net
sales decreased 4.5% to $949.4 million during the second
quarter of 2003 from $994.4 million in the second quarter
of 2002.

Net sales for the Dairy Group decreased 5.3%, or
$43.2 million, in the second quarter of 2003 compared to
the second quarter of 2002. This decrease is primarily due to
the effects of decreased raw milk costs compared to the prior
year. In general, we change the prices that we charge our
customers for our products on a monthly basis, as the costs of
our raw materials fluctuate. 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 second quarter of 2003 compared to the second
quarter of 2002:

|                                  |  |                        |      |      |  |          |      |     |  |  |       |   
|--------------------------------- |  | ---------------------- | ---- | ---- |  | -------- | ---- | --- |  |  | ----- | --
|                                  |  |                       
|                                  |  | Quarter Ended June 30*
|                                  |  |                       
|                                  |  | 2003                   |      | 2002 |  | % Change
|                                  |  |                        |      |      |  |         
|Class I raw skim milk mover(3)    |  | $                      | 5.92 | (1)  |  | $        | 6.99 | (1) |  |  | (15.3 | )%
|Class I butterfat mover(3)        |  |                        | 1.14 | (2)  |  |          | 1.29 | (2) |  |  | (11.6 | )%
|Class II raw skim milk minimum(4) |  |                        | 6.62 | (1)  |  |          | 7.55 | (1) |  |  | (12.3 | )%
|Class II butterfat minimum(4)     |  |                        | 1.16 | (2)  |  |          | 1.19 | (2) |  |  | (2.5  | )%



---



|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|* | 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 federally
    regulated locations. Our actual cost also includes producer
    premiums, procurement costs and other related charges that vary
    by location and vendor.

-15-



---



##### Table of Contents





|    |                                                                                                                                
|--- | -------------------------------------------------------------------------------------------------------------------------------
|(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, ice
    cream and sour cream.

Net sales for our Specialty Foods segment
decreased slightly by approximately 1%, or $1.7 million,
during the second quarter of 2003 compared to the second quarter
of 2002. This decrease was primarily due to the sale of EBI
Foods, Ltd. in October 2002 and softness in pickle volumes
offset by an increase in non-dairy coffee creamer and
nutritional beverage sales volumes.

Cost of
Sales Our consolidated
cost of sales ratio was 74.2% in the second quarter of 2003
compared to 75.0% in the second quarter of 2002. The cost of
sales ratio for the Dairy Group decreased to 74.2% in the second
quarter of 2003 from 75.2% in the second quarter of 2002 due
primarily to lower raw milk costs and realized merger synergies.
Specialty Foods cost of sales ratio increased slightly to
74.4% in the second quarter of 2003 from 74.0% in the second
quarter of 2002. This increase was primarily due to an increase
in packaging costs and rising commodity prices.

Operating Costs and
Expenses Our consolidated
operating expense ratio was 16.9% in the second quarter of 2003
compared to 17.3% during the second quarter of 2002.

The operating expense ratio at the Dairy Group
was 16.9% in the second quarter of 2003 compared to 16.4% in the
second quarter of 2002. The increase in the 2003 operating
expense ratio was primarily due to the effect of lower raw
material prices in 2003. Lower raw material prices generally
result in lower sales dollars. Therefore, falling raw milk
prices will generally increase the Dairy Groups operating
expense ratio and rising raw milk prices will generally reduce
the Dairy Groups operating expense ratio.

The operating expense ratio for Specialty Foods
was 10.2% in the second quarter 2003 versus 11.8% in the second
quarter 2002, primarily due to lower incentive compensation
expense and the sale of EBI Foods, Ltd., which had higher
operating expenses.

Operating
Income Consolidated
operating income during the second quarter of 2003 was
$84.6 million, an increase of $7.9 million from the
second quarter of 2002 operating income of $76.7 million.
Our consolidated operating margin in the second quarter of 2003
was 8.9% compared to 7.7% in the second quarter of 2002.

The Dairy Groups operating margin increased
to 8.9% in the second quarter of 2003 from 8.3% in the same
period of 2002. This increase is primarily due to the effects of
decreased raw milk costs compared to the prior year.

Specialty Foods operating margin was 15.4%
in the second quarter of 2003 versus 14.3% in the second quarter
of 2002. This increase was primarily due to the increase in
non-dairy creamer and nutritional beverage sales and lower
promotional costs for pickle products.

Other (Income)
Expense Total other
expense decreased by $1.0 million in the in the second
quarter of 2003 compared to the second quarter of 2002. Interest
expense decreased to $13.7 million in the second quarter of
2003 from $14.2 million in the second quarter of 2002 as a
result of lower interest rates.

Income
Taxes Income tax expense
was consistent in the second quarter of 2003 compared to the
second quarter of 2002 at 38.1%. Our tax rate varies as the mix
of earnings contributed by our various business units changes
and as tax savings initiatives are adopted.

First Six Months of 2003 Compared to First
Six Months of 2002

Net
Sales Consolidated net
sales decreased 4.2% to $1.87 billion during the first six
months of 2003 from $1.95 billion in the first six months
of 2002.

-16-



---



##### Table of Contents



Net sales for the Dairy Group decreased 5.1% or
$82.4 million in the first six months of 2003 compared to
the first six months of 2002. This decrease is primarily due to
the effects of decreased raw milk costs compared to the prior
year. In general, we change the prices that we charge our
customers for our products on a monthly basis, as the costs of
our raw materials fluctuate. 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 six months of 2003 compared to the first
six months of 2002:

|                                  |  |                           |      |      |  |          |      |     |  |  |       |   
|--------------------------------- |  | ------------------------- | ---- | ---- |  | -------- | ---- | --- |  |  | ----- | --
|                                  |  |                          
|                                  |  | Six Months Ended June 30*
|                                  |  |                          
|                                  |  | 2003                      |      | 2002 |  | % Change
|                                  |  |                           |      |      |  |         
|Class I raw skim milk mover(3)    |  | $                         | 6.11 | (1)  |  | $        | 7.07 | (1) |  |  | (13.6 | )%
|Class I butterfat mover(3)        |  |                           | 1.16 | (2)  |  |          | 1.35 | (2) |  |  | (14.1 | )%
|Class II raw skim milk minimum(4) |  |                           | 6.81 | (1)  |  |          | 7.62 | (1) |  |  | (10.6 | )%
|Class II butterfat minimum(4)     |  |                           | 1.16 | (2)  |  |          | 1.30 | (2) |  |  | (10.8 | )%



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|*   | 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 federally
    regulated 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, ice
    cream and sour cream.                                                                                                                                                                                                                                                                                                                                                                                                 

Net sales for Specialty Foods were consistent in
the first six months of 2003 compared to the same period in the
prior year at $339 million. Sales increases in non-dairy
coffee creamers and nutritional beverages were offset by lower
sales in pickles and bulk powder, and by the decrease in sales
resulting from the divestiture of EBI Foods, Ltd., in October
2002.

Cost of
Sales Our consolidated
cost of sales ratio was 74.3% for the first six months of 2003
compared to 75.6% in the first six months of 2002. The cost of
sales ratio for the Dairy Group decreased to 74.3% in the first
six months of 2003 from 75.6% in the first six months of 2002
due primarily to lower raw milk costs. Specialty Foods
cost of sales ratio decreased slightly to 74.6% in the first six
months of 2003 from 74.9% in the first six months of 2002. This
decrease was due to synergies resulting from plant
rationalization in 2002, partly offset by an increase in
packaging costs and rising commodity prices.

Operating Costs and
Expenses Our consolidated
operating expense ratio was consistent in the first six months
of 2003 at 17.3% compared to 17.4% in the first six months of
2002.

The operating expense ratio in the Dairy Group
was 17.2% in the first six months of 2003 compared to 16.7% in
the first six months of 2002. The increase in the 2003 operating
expense ratio was primarily due to the effect of lower raw
material prices in 2003. Lower raw material prices generally
result in lower sales dollars. Therefore, lower raw milk prices
will generally increase the Dairy Groups operating expense
ratio and higher raw milk prices will generally reduce the Dairy
Groups operating expense ratio.

The operating expense ratio for Specialty Foods
was 10.4% in the first six months of 2003 versus 11.5% in the
first six months of 2002 primarily due to lower incentive
compensation expense and the sale of EBI Foods, Ltd., which had
higher operating expenses.

Operating
Income Consolidated
operating income during the first six months of 2003 was
$157.0 million, an increase of $19.8 million from the
first six months of 2002 operating income of
$137.2 million. Our consolidated operating margin in the
first six months of 2003 was 8.4% compared to

-17-



---



##### Table of Contents



7.0% in the first six months of 2002. Corporate
expenses decreased $5.6 million in the first six months of
2003 to $23.8 million from $29.4 million in the first
six months of 2002.


The Dairy Groups operating margin increased
to 8.5% in the first six months of 2003 from 7.7% in the same
period of 2002. This increase is primarily due to the effects of
decreased raw milk costs compared to the prior year, along with
realized merger synergies.

Specialty Foods operating margin was 15.0%
in the first six months of 2003 versus 13.6% in the first six
months of 2002. This increase was primarily due to the increase
in non-dairy coffee creamers and nutritional beverage sales,
coupled with lower promotional costs for pickle products and
synergies gained from 2002 plant closings.

Other (Income)
Expense Total other
expenses decreased by $0.9 million in the first six months
of 2003 compared to the first six months of 2002. Interest
expense decreased to $27.3 million in the first six months
of 2003 from $28.3 million in the first six months of 2002
as a result of lower interest rates.

Income
Taxes Income tax expense
was recorded at an effective rate of 38.2% for the first six
months of 2003 compared to 38.5% in the first six months of
2002. Our tax rate varies as the mix of earnings contributed by
our various business units changes and the savings initiatives
are adopted.






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

Based on their evaluations as of a date within
90 days of the filing date of this Quarterly Report on
Form 10-Q, our Chief Executive Officer and Chief Financial
Officer concluded that our disclosure controls and procedures
(as defined in Rules 13-a and 15d-14 under the Securities
Exchange Act of 1934) are effective. There have been no
significant changes in our internal controls or in other factors
that could significantly affect these controls subsequent to the
date of their evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

-18-



---



##### 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

-19-



---



##### 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)                   

Date: August 13, 2003

-20-



---



##### Table of Contents



INDEX TO EXHIBITS

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