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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

For the quarterly period ended July 29, 2007

OR

For the transition period from              to             

Commission file number 001-14335

DEL MONTE FOODS COMPANY

(Exact name of registrant as specified in its charter)

One Market @ The Landmark, San Francisco, California 94105

(Address of Principal Executive Offices including Zip Code)

(415) 247-3000

(Registrant’s Telephone Number, Including Area Code)

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 a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  x    Accelerated filer  ¨    Non-accelerated filer  ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes   ¨    No  x

As of August 29, 2007, there were 202,529,176 shares of Del Monte Foods Company Common Stock, par value $0.01 per share, outstanding.

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PART I. FINANCIAL INFORMATION

DEL MONTE FOODS COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions, except share and per share data)

See Accompanying Notes to Condensed Consolidated Financial Statements.

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DEL MONTE FOODS COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In millions, except per share data)

See Accompanying Notes to Condensed Consolidated Financial Statements.

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DEL MONTE FOODS COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

See Accompanying Notes to Condensed Consolidated Financial Statements.

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DEL MONTE FOODS COMPANY AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended July 29, 2007

(In millions, except share and per share data)

(Unaudited)

Note 1. Business and Basis of Presentation

Del Monte Foods Company and its consolidated subsidiaries (“Del Monte,” or the “Company”) is one of the country’s largest producers, distributors and marketers of premium quality, branded food and pet products for the U.S. retail market, with leading food brands, such as Del Monte, StarKist, S&W, Contadina, College Inn and other brand names and premier foods and snacks for pets, with brands including Meow Mix, Kibbles ‘n Bits, 9Lives, Milk-Bone, Pup-Peroni, Meaty Bone, Snausages, Pounce and other brand names. The Company also produces private label food and pet products. The majority of its products are sold nationwide in all channels serving retail markets, mass merchandisers, the U.S. military, certain export markets, the foodservice industry and food processors.

On May 19, 2006, Del Monte Corporation, a direct, wholly-owned subsidiary of Del Monte Foods Company, completed the acquisition of Meow Mix Holdings, Inc. (“Meow Mix”), the maker of Meow Mix brand cat food and Alley Cat brand cat food. Effective July 2, 2006, Del Monte Corporation completed the acquisition of certain pet product assets, including the Milk-Bone brand (“Milk-Bone”), from Kraft Foods Global, Inc.

The Company has two reportable segments: Consumer Products and Pet Products. The Consumer Products reportable segment includes the Consumer Products operating segment, which manufactures, markets, and sells branded and private label shelf-stable products, including fruit, vegetable, tomato, broth, and tuna products. The Pet Products reportable segment includes the Pet Products operating segment, which manufactures, markets and sells branded and private label dry and wet pet food and pet snacks.

The Company operates on a 52 or 53-week fiscal year ending on the Sunday closest to April 30. The results of operations for the three months ended July 29, 2007 and July 30, 2006 each reflect periods that contain 13 weeks.

The accompanying unaudited condensed consolidated financial statements of Del Monte as of July 29, 2007 and for the three months ended July 29, 2007 and July 30, 2006 have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by generally accepted accounting principles (“GAAP”) for annual financial statements. In the opinion of management, all adjustments consisting of normal and recurring entries considered necessary for a fair presentation of the results for the interim periods presented have been included. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts in the financial statements and accompanying notes. These estimates are based on information available as of the date of the unaudited condensed consolidated financial statements. Therefore, actual results could differ from those estimates. Furthermore, operating results for the three months ended July 29, 2007 are not necessarily indicative of the results expected for the year ending April 27, 2008. These unaudited condensed consolidated financial statements should be read in conjunction with the notes to the financial statements contained in the Company’s annual report on Form 10-K for the year ended April 29, 2007 (“2007 Annual Report”). All significant intercompany balances and transactions have been eliminated.

Note 2. Employee Stock Plans

For a description of the Company’s stock-based incentive plans, see Note 10 of the 2007 Annual Report.

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DEL MONTE FOODS COMPANY AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

For the three months ended July 29, 2007

(In millions, except share and per share data)

(Unaudited)

The fair value for stock options granted was estimated at the date of grant using a Black-Scholes option-pricing model. There were no stock option grants during the three months ended July 29, 2007. The following table presents the weighted average assumptions for the three months ended July 30, 2006:

Stock option activity and related information during the period indicated was as follows:

As of July 29, 2007, the aggregate intrinsic values of options outstanding and options exercisable were $29.5 and $22.1, respectively.

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DEL MONTE FOODS COMPANY AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

For the three months ended July 29, 2007

(In millions, except share and per share data)

(Unaudited)

At July 29, 2007, the range of exercise prices and weighted-average remaining contractual life of outstanding options was as follows:

Other stock-based compensation activity and related information during the period indicated was as follows:

Note 3. Inventories

The Company’s inventories consist of the following:

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DEL MONTE FOODS COMPANY AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

For the three months ended July 29, 2007

(In millions, except share and per share data)

(Unaudited)

Note 4. Goodwill and Intangible Assets

The following table presents the Company’s goodwill and intangible assets:

As of July 29, 2007, the Company’s goodwill was comprised of $193.1 related to the Consumer Products reportable segment and $1,187.7 related to the Pet Products reportable segment. As of April 29, 2007, the Company’s goodwill was comprised of $193.1 related to the Consumer Products reportable segment and $1,196.2 related to the Pet Products reportable segment.

Amortization expense for the three months ended July 29, 2007 and July 30, 2006 was $1.9 and $1.7, respectively. The Company expects to recognize $6.0 of amortization expense during the remainder of fiscal 2008. The following table presents expected amortization of intangible assets as of July 29, 2007, for each of the five succeeding fiscal years:

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DEL MONTE FOODS COMPANY AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

For the three months ended July 29, 2007

(In millions, except share and per share data)

(Unaudited)

Note 5. Earnings Per Share

The following tables set forth the computation of basic and diluted earnings per share from continuing operations:

The computation of diluted earnings per share calculates the effect of dilutive securities on weighted average shares. Dilutive securities include stock options, restricted stock units and other deferred stock awards.

Options outstanding in the aggregate amounts of 3,827,105 and 6,472,945 were not included in the computation of diluted earnings per share for the three months ended July 29, 2007 and July 30, 2006, respectively, because their inclusion would be antidilutive.

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DEL MONTE FOODS COMPANY AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

For the three months ended July 29, 2007

(In millions, except share and per share data)

(Unaudited)

Note 6. Debt

The Company’s debt consists of the following, as of the dates indicated:

The Company borrowed $115.6 from its revolving credit facility during the three months ended July 29, 2007. A total of $54.0 was repaid during the three months ended July 29, 2007. As of July 29, 2007, the net availability under the revolving credit facility, reflecting $47.8 of outstanding letters of credit, was $319.6. The blended interest rate on the revolving credit facility was approximately 7.46% on July 29, 2007. Additionally, to maintain availability of funds under the revolving credit facility, the Company pays a 0.375% commitment fee on the unused portion of the revolving credit facility.

The Company is scheduled to repay $22.0 of its long-term debt during the remainder of fiscal 2008. Scheduled maturities of long-term debt for each of the five succeeding fiscal years are as follows:

Agreements relating to the Company’s long-term debt, including the credit agreement governing its senior credit facility (as amended through August 15, 2006, the “Amended Senior Credit Facility”) and the indentures governing the senior subordinated notes, contain covenants that restrict the ability of Del Monte Corporation and its subsidiaries, among other things, to incur or guarantee indebtedness, issue capital stock, pay dividends on and redeem capital stock, prepay certain indebtedness, enter into transactions with affiliates, make other restricted payments, including investments, incur liens, consummate asset sales and enter into consolidations or mergers. Certain of these covenants are also applicable to Del Monte Foods Company. Del Monte is required to meet a maximum leverage ratio and a minimum fixed charge coverage ratio under the Amended Senior Credit Facility. The maximum permitted leverage ratio decreases over time and the minimum fixed charge coverage ratio increases over time, as set forth in the Amended Senior Credit Facility. As of July 29, 2007, the Company believes that it is in compliance with all such financial covenants.

Note 7. Employee Severance Costs

On June 22, 2006, the Company announced a transformation plan, which was approved by the Strategic Committee of the Company’s Board of Directors on June 20, 2006, pursuant to authority granted to such Strategic Committee by the Company’s Board of Directors. The transformation plan is intended to further the Company’s progress against its strategic goal of becoming a more value-added consumer packaged food company. The plan’s initiatives are focused on strengthening systems and processes, streamlining the organization and leveraging the scale efficiencies from the acquisitions of Meow Mix and Milk-Bone.

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DEL MONTE FOODS COMPANY AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

For the three months ended July 29, 2007

(In millions, except share and per share data)

(Unaudited)

The Company communicated to affected employees that their employment would be terminated as part of the transformation plan during fiscal 2007 and the first quarter of fiscal 2008. Termination benefits and severance costs are expensed as part of selling, general and administrative expense and are recorded as corporate expenses, as it is the Company’s policy to record such restructuring expenses as corporate expenses.

The following table reconciles the beginning and ending accrued transformation-related termination and severance costs:

Note 8. Comprehensive Income

The following table reconciles net income to comprehensive income:

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DEL MONTE FOODS COMPANY AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

For the three months ended July 29, 2007

(In millions, except share and per share data)

(Unaudited)

Note 9. Retirement Benefits

Defined Benefit Plans.

Del Monte sponsors three qualified defined benefit pension plans and several unfunded defined benefit postretirement plans providing certain medical, dental and life insurance benefits to eligible retired, salaried, non-union hourly and union employees. Refer to Note 12 of the 2007 Annual Report for a description of these plans. The components of net periodic benefit cost of such plans for the three months ended July 29, 2007 and July 30, 2006, respectively, are as follows:

In August 2006, the Pension Protection Act of 2006 (the “Act”) was signed into law. This legislation will ultimately result in accelerated rates of funding to the Company’s defined benefit pension plans and encourages employers to fully fund their defined benefit pension plans by 2011 by imposing certain consequences beginning in calendar 2008 for plans that do not meet certain funding levels. The Company currently expects to make contributions of approximately $41 in fiscal 2008, which includes a minimum contribution of approximately $16 and an incremental contribution of approximately $25. The Company currently anticipates making the incremental contribution in fiscal 2008 as a result of the Act. If the Company does not make the incremental contribution in fiscal 2008, among other things, more frequent contributions (quarterly instead of annually), additional contributions in fiscal 2009 and beyond, and agreements with the Pension Benefit Guarantee Corporation may be required, and the form of benefit payments to participants could be impacted. The Company continues to analyze the full impact of this law on the Company’s financial position, results of operations and cash flows.

Note 10. Income Taxes

In June 2006, the Financial Accounting Standards Board issued Interpretation No. 48, “Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109,” (“FIN 48”), which seeks to reduce the diversity in practice associated with the accounting and reporting for uncertainty in income tax positions. This interpretation prescribes a comprehensive model for the financial statement recognition, measurement, presentation and disclosure of uncertain tax positions taken or expected to be taken in income tax returns. An uncertain tax position is recognized if it is determined that it is more likely than not to be sustained upon examination. The tax position is measured as the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. The cumulative effect of applying the provisions of this interpretation is reported as a separate adjustment to the opening balance of retained earnings in the year of adoption. FIN 48 is effective for fiscal years beginning after December 15, 2006.

The Company adopted the provisions of FIN 48 as of the first day of the first fiscal quarter, April 30, 2007. The adoption of FIN 48 resulted in a $0.3 decrease to the liability for unrecognized tax benefits and corresponding cumulative effect increase to retained earnings. Upon adoption, the Company had unrecognized tax benefits of $7.0, $6.3 of which would impact the effective income tax rate if recognized. The Company’s continuing practice is to recognize interest on uncertain tax positions in income tax expense and penalties in selling, general and administrative expense. As of July 29, 2007, the amount of accrued interest included in the non-current income tax liability account is $0.3, net of tax. No penalties are accrued in the unrecognized tax benefits.

There were no significant changes to the liability for unrecognized tax benefits or accrued interest and penalties in the three months ended July 29, 2007.

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DEL MONTE FOODS COMPANY AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

For the three months ended July 29, 2007

(In millions, except share and per share data)

(Unaudited)

The Company files income tax returns in the U.S. Federal jurisdiction and in many foreign and state jurisdictions. A number of years may elapse before an uncertain tax position, for which the Company has unrecognized tax benefits, is audited and finally resolved. Favorable resolution would be recognized in the period of resolution. The Company expects during the next 12 months to close a tax year to audit. Should this occur, the liability for unrecognized tax benefits would decrease by approximately $2.

The Company has open tax years from primarily 2001 to 2006 with various significant taxing jurisdictions including the United States, American Samoa and Canada. These open years contain matters that could be subject to differing interpretations of applicable tax laws and regulations as they relate to the amount, timing or inclusion of revenue and expenses as determined by the various taxing jurisdictions.

Note 11. Legal Proceedings

Except as set forth below, there have been no material developments in the legal proceedings reported in the Company’s annual report on Form 10-K for the year ended April 29, 2007:

Beginning with the pet food recall announced by Menu Foods, Inc. in March 2007, many major pet food manufacturers, including the Company, announced recalls of select products. The Company currently believes that there are over 90 purported class actions relating to these pet food recalls. To date, the Company is a defendant in seven purported class actions related to its pet food and pet snack recall, which it initiated March 31, 2007. However, the Company may be named in additional cases.

As previously reported in our annual report on Form 10-K, we are currently a defendant in the following cases:

Additionally, we are also currently a defendant in the following case:

By order dated June 28, 2007, the Carver, Ford, Schwinger, Wahl and Tompkins cases were transferred to the U.S. District Court for the District of New Jersey and consolidated with other pet food class actions under the federal rules for multi-district litigation. The Blaszkowski and Picus cases were not consolidated. The named plaintiffs allege that their pets suffered injury and/or death as a result of ingesting the Company’s and other defendants’ allegedly contaminated pet food and pet snack products. The Blaszkowski and Picus cases also contain allegations of false and misleading advertising by the Company. The plaintiffs are seeking certification of class actions in the respective jurisdictions as well as unspecified damages and injunctive relief against further distribution of the allegedly defective products. The Company plans to deny these allegations and vigorously defend itself. The Company believes it has adequate insurance to cover any material liability in these cases.

Del Monte is also involved from time to time in various legal proceedings incidental to its business, including proceedings involving product liability claims, worker’s compensation and other employee claims, tort claims and other general liability claims, for which the Company carries insurance, as well as trademark, copyright, patent infringement and related litigation. Additionally, Del Monte is involved from time to time in claims relating to environmental remediation and similar events. While it is not feasible to predict or determine the ultimate outcome of these matters, the Company believes that none of these legal proceedings will have a material adverse effect on its financial position.

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DEL MONTE FOODS COMPANY AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

For the three months ended July 29, 2007

(In millions, except share and per share data)

(Unaudited)

Note 12. Segment Information

During the first quarter of fiscal 2008, the Company made changes in its internal reporting of certain product groupings. This event, combined with management changes and the relocation of certain business functions, led the Company to determine that these reporting and other changes resulted in a change to the Company’s operating segments. The former Del Monte Brands and StarKist Seafood operating segments have been combined into one operating segment: Consumer Products. As the former Del Monte Brands and StarKist Seafood operating segments were previously aggregated for segment reporting, this operating segment change did not affect the Company’s reportable segments.

The Company has the following reportable segments:

The Company’s chief operating decision-maker, its Chief Executive Officer, reviews financial information presented on a consolidated basis accompanied by disaggregated information on net sales and operating income, by operating segment, for purposes of making decisions and assessing financial performance. The chief operating decision-maker reviews assets of the Company on a consolidated basis only. The accounting policies of the individual operating segments are the same as those of the Company.

The following table presents financial information about the Company’s reportable segments:

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This discussion is intended to further the reader’s understanding of the consolidated financial condition and results of operations of our company. It should be read in conjunction with the financial statements included in this quarterly report on Form 10-Q and our annual report on Form 10-K for the year ended April 29, 2007 (the “2007 Annual Report”). These historical financial statements may not be indicative of our future performance. This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains a number of forward-looking statements, all of which are based on our current expectations and could be affected by the uncertainties and risks described in Item 1A. “Risk Factors” in our 2007 Annual Report and in Part II of this quarterly report on Form 10-Q.

Corporate Overview

Our Business. Del Monte Foods Company and its consolidated subsidiaries (“Del Monte,” or the “Company”) is one of the country’s largest producers, distributors and marketers of premium quality, branded food and pet products for the U.S. retail market, with leading food brands such as Del Monte, StarKist, S&W, Contadina and College Inn, and food and snack brands for dogs and cats such as Meow Mix, Kibbles ‘n Bits, 9Lives, Milk-Bone, Pup-Peroni, Meaty Bone, Snausages and Pounce.

On May 19, 2006, we completed the acquisition of Meow Mix Holdings, Inc. (“Meow Mix”), the maker of Meow Mix brand cat food and Alley Cat brand cat food. Effective July 2, 2006, we completed the acquisition of certain pet product assets, including the Milk-Bone brand (“Milk-Bone”), from Kraft Foods Global, Inc.

We have two reportable segments: Consumer Products and Pet Products. During the first quarter of fiscal 2008, we made changes in our internal reporting of certain product groupings. This event, combined with management changes and the relocation of certain business functions, led us to determine that these reporting and other changes resulted in a change to our operating segments. The former Del Monte Brands and StarKist Seafood operating segments have been combined into one operating segment: Consumer Products. As the former Del Monte Brands and StarKist Seafood operating segments were previously aggregated for segment reporting, this operating segment change did not affect our reportable segments. The Consumer Products reportable segment includes the Consumer Products operating segment, which manufactures, markets and sells branded and private label shelf-stable products, including fruit, vegetable, tomato, broth and tuna products. The Pet Products reportable segment includes the Pet Products operating segment, which manufactures, markets and sells branded and private label dry and wet pet food and pet snacks.

Key Performance Indicators

The following is a summary of some of our key performance indicators that we utilize to assess results of operations:

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Executive Overview

Our first quarter results include net sales of $753.5 million, which represent growth of 11.8% over the first quarter of fiscal 2007. Volume growth drove the increase in net sales. This growth resulted primarily from a full quarter of operations from the Meow Mix and Milk Bone acquisitions which were completed during the first quarter of fiscal 2007, as well as growth in Meow Mix and Milk-Bone products. In addition, volume growth from new products contributed 4.2% to sales growth. Pricing, net of associated volume loss or “elasticity,” was essentially flat.

During the first quarter of fiscal 2008, as in fiscal 2007, we continued to see cost escalation which impacted our results of operations. These cost increases were driven by higher ingredient, commodity and raw product costs. In particular, in our Consumer Products segment, skipjack (a type of tuna) costs are at 10-year highs due to low catch rates, and in our Pet Products segment, the price of grains, fats and oils has increased related to the demand for alternative fuels. During the first quarter of fiscal 2008, pricing actions, combined with our cost saving efforts, offset the majority of our cost increases. For the remainder of fiscal 2008, we expect that ingredient, commodity, and raw product costs, particularly for grains, fats and oils, as well as fish, will continue to be higher than the prior year. We expect these higher costs, which have accelerated in recent months, to have a greater impact on our operating results for the remainder of the fiscal year.

Our first quarter operating income was $44.1 million, which represented an increase of $3.2 million or 7.8% compared to the first quarter of fiscal 2007. Operating margin decreased by 20 basis points to 5.9% for the first quarter of fiscal 2008. The increase in operating income was driven by the acquisitions, partially offset by decreased operating income in the Consumer Products operating segment due to higher fish costs and lower volume from higher pricing. While pricing covered the majority of our cost increases, operating margin was also negatively impacted by the absence of the $9.5 million gain on the sale of a perpetual license for S&W branded dry soaked beans and related products and the sale of the rights to the S&W trademark in Australia and New Zealand, as well as increased marketing spending. In addition, we incurred $5.9 million in expenses during the first quarter of fiscal 2008 related to the transformation plan described below, as compared to $9.2 million of transformation expense for the three months ended July 30, 2006.

We incurred $38.0 million in interest expense in the first quarter of fiscal 2008 as compared to $30.5 million in the first quarter of fiscal 2007, driven primarily by higher average debt levels. We expect that our interest expense for the full year will be relatively flat compared to fiscal 2007 due to lower average debt levels and anticipated lower interest rates.

Transformation Plan

On June 22, 2006, we announced a transformation plan to further our progress against our strategic goal of becoming a more value-added consumer packaged food company. The plan’s initiatives, which are focused on strengthening systems and processes, streamlining the organization and leveraging the scale efficiencies from the pet acquisitions noted above, are anticipated to improve our competitiveness and enhance our overall performance.

As part of our plan, we are focusing on the following initiatives:

We expect to incur total pre-tax costs associated with these initiatives from inception through the end of fiscal 2008 of approximately $110 million, including $46 million of pre-tax cash expenses, $54 million in anticipated capital expenditures and $10 million of pre-tax non-cash expenses. As of July 29, 2007, we have incurred approximately $73.5 million of these expected total costs, including approximately $34.6 million of pre-tax cash expenses, approximately $31.8 million of capital expenditures and approximately $7.1 million of pre-tax non-cash expenses. We began to generate savings in fiscal 2007, and expect to capture annualized pre-tax savings of approximately $40 million by the end of fiscal 2008 and approximately $50 million by the end of fiscal 2009.

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Critical Accounting Policies and Estimates

Our discussion and analysis of the financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. On an ongoing basis, we reevaluate our estimates, including those related to trade promotions, retirement benefits, goodwill and intangibles, and retained-insurance liabilities. Estimates in the assumptions used in the valuation of our stock option expense are updated periodically and reflect conditions that existed at the time of each new issuance of stock options. We base estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. For all of these estimates, we caution that future events rarely develop exactly as forecasted, and, therefore, these estimates routinely require adjustment.

Management has discussed the selection of critical accounting policies and estimates with the Audit Committee of the Board of Directors, and the Audit Committee has reviewed our disclosure relating to critical accounting policies and estimates in this quarterly report on Form 10-Q. Our significant accounting policies are more fully described in Note 2 to our Consolidated Financial Statements included in our 2007 Annual Report. The following is a summary of the more significant judgments and estimates used in the preparation of our consolidated financial statements:

Trade Promotions

Trade promotions are an important component of the sales and marketing of our products, and are critical to the support of our business. Trade promotion costs include amounts paid to encourage retailers to offer temporary price reductions for the sale of our products to consumers, to advertise our products in their circulars, to obtain favorable display positions in their stores, and to obtain shelf space. We accrue for trade promotions, primarily at the time products are sold to customers, by reducing sales and recording a corresponding accrued liability. The amount we accrue is based on an estimate of the level of performance of the trade promotion, which is dependent upon factors such as historical trends with similar promotions, expectations regarding customer and consumer participation, and sales and payment trends with similar previously offered programs. Our original estimated costs of trade promotions are reasonably likely to change in the future as a result of changes in trends with regard to customer and consumer participation, particularly for new programs and for programs related to the introduction of new products. We perform monthly evaluations of our outstanding trade promotions; making adjustments, where appropriate, to reflect changes in our estimates. The ultimate cost of a trade promotion program is dependent on the relative success of the events and the actions and level of deductions taken by our customers for amounts they consider due to them. Final determination of the permissible trade promotion amounts due to a customer may take up to 18 months from the product shipment date. Our evaluations during the three months ended July 29, 2007 and July 30, 2006 resulted in no significant adjustments to our estimates relating to trade promotion liability.

Retirement Benefits

We sponsor non-contributory defined benefit pension plans (“DB plans”), defined contribution plans, multi-employer plans and certain other unfunded retirement benefit plans for our eligible employees. The amount of DB plans benefits eligible retirees receive is based on their earnings and age. Retirees may also be eligible for medical, dental and life insurance benefits (“other benefits”) if they meet certain age and service requirements at retirement. Generally, other benefit costs are subject to plan maximums, such that the Company and retiree both share in the cost of these benefits.

Our Assumptions. We utilize independent third party actuaries to calculate the expense and liabilities related to the DB plans benefits and other benefits. DB plans benefits or other benefits which are expected to be paid are expensed over the employees’ expected service period. The actuaries measure our annual DB plans benefits and other benefits expense by relying on certain assumptions made by us. Such assumptions include:

These assumptions reflect our historical experience and our best judgment regarding future expectations. The assumptions, the plan assets and the plan obligations are used to measure our annual DB plans benefits expense and other benefits expense.

Since the DB plans benefits and other benefits liabilities are measured on a discounted basis, the discount rate is a significant assumption. The discount rate was determined based on an analysis of interest rates for high-quality, long-term corporate

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debt at each measurement date. The discount rate used to determine DB plans and other benefits projected benefit obligation as of the balance sheet date is the rate in effect at the measurement date. The same rate is also used to determine DB plans and other benefits expense for the following fiscal year. The long-term rate of return for DB plans’ assets is based on our historical experience, our DB plans’ investment guidelines and our expectations for long-term rates of return. Our DB plans’ investment guidelines are established based upon an evaluation of market conditions, tolerance for risk, and cash requirements for benefit payments.

During the three months ended July 29, 2007, we recognized DB plans benefits expense of $2.5 million, and other benefits expense of $0.2 million. Our remaining fiscal 2008 DB plans benefits expense is currently estimated to be approximately $7.6 million and other benefits expense is estimated to be approximately $0.6 million. Our actual future DB plans benefits and other benefits expense amounts may vary depending upon various factors, including the accuracy of our original assumptions and future assumptions.

Goodwill and Intangibles

Del Monte produces, distributes and markets products under many different brand names. Although each of our brand names has value, in accordance with Financial Accounting Standards Board (“FASB”) Statement of Financial Accounting Standards (“SFAS”) No. 142, “Goodwill and Other Intangible Assets,” only those that have been purchased have a carrying value on our consolidated balance sheet. During an acquisition, the purchase price is allocated to identifiable assets and liabilities, including brand names and other intangibles, based on estimated fair value, with any remaining purchase price recorded as goodwill.

We have evaluated our capitalized brand names and determined that some have useful lives that generally range from 15 to 40 years (“Amortizing Brands”) and others have indefinite useful lives (“Non-Amortizing Brands”). Non-Amortizing Brands typically have significant market share and a history of strong earnings and cash flow, which we expect to continue into the foreseeable future.

Amortizing Brands are amortized over their estimated useful lives. We review the asset groups containing Amortizing Brands (including related tangible assets) for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable in accordance with FASB SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.” An asset or asset group is considered impaired if its carrying amount exceeds the undiscounted future net cash flow the asset or asset group is expected to generate. If an asset or asset group is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds its fair value. Non-Amortizing Brands and goodwill are not amortized, but are instead tested for impairment at least annually. Non-Amortizing Brands are considered impaired if the carrying value exceeds the estimated fair value. Goodwill is considered impaired if the book value of the reporting unit containing the goodwill exceeds its estimated fair value. If estimated fair value is less than the book value, the asset is written down to the estimated fair value and an impairment loss is recognized.

The estimated fair value of our Non-Amortizing Brands is determined using the relief from royalty method, which is based upon the estimated rent or royalty we would pay for the use of a brand name if we did not own it. For goodwill, the estimated fair value of a reporting unit is determined using the income approach, which is based on the cash flows that the unit is expected to generate over its remaining life, and the market approach, which is based on market multiples of similar businesses. Annually, we engage third party valuation experts to assist in this process.

Considerable management judgment is necessary in estimating future cash flows, market interest rates, discount factors and other factors affecting the valuation of goodwill and intangibles, including the operating and macroeconomic factors that may affect them. We use historical financial information, internal plans and projections, and industry information in making such estimates.

We did not recognize any impairment charges for our Amortizing Brands, Non-Amortizing Brands or goodwill during the three months ended July 29, 2007 and July 30, 2006. While we currently believe the fair value of all of our intangible assets exceeds carrying value, materially different assumptions regarding future performance and discount rates could result in future impairment losses. In particular, if the performance of StarKist seafood does not improve and we no longer believe we will achieve our long-term projected sales or operating income, we may conclude in connection with any future impairment tests that the estimated fair value of StarKist assets, including goodwill, are less than the book value and recognize an impairment charge. Such impairment would adversely affect our earnings.

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Stock Option Expense

We believe an effective way to align the interests of certain employees with those of our stockholders is through employee stock-based incentives. We typically issue two types of employee stock-based incentives: stock options and restricted stock incentives (“Restricted Shares”).

Stock options are stock incentives in which employees benefit to the extent our stock price exceeds the strike price of the stock option before expiration. A stock option is the right to purchase a share of our common stock at a predetermined exercise price. For the stock options that we grant, the employee’s exercise price is typically equivalent to our stock price on the date of the grant (as set forth in our stock incentive plan). Typically, these employees vest in stock options in equal annual installments over a four year period and such options generally have a ten-year term until expiration.

Restricted Shares are stock incentives in which employees receive the rights to own shares of our common stock and do not require the employee to pay an exercise price. Restricted Shares include restricted stock units, performance shares and performance accelerated restricted stock units. Restricted stock units vest over a period of time. Performance shares vest at predetermined points in time if certain corporate performance goals are achieved or are forfeited if such goals are not met. Performance accelerated shares vest at a point in time, which may accelerate if certain stock performance measures are achieved.

Fair Value Method of Accounting. We adopted the provisions of SFAS 123R “Share-Based Payment” as of May 1, 2006 and elected to use the modified prospective transition method of adoption.

Our Assumptions. Under the fair value method of accounting for stock-based compensation, we measure stock option expense at the date of grant using the Black-Scholes valuation model. This model estimates the fair value of the options based on a number of assumptions, such as interest rates, employee exercises, the current price and expected volatility of our common stock and expected dividends, if any. The expected life is a significant assumption as it determines the period for which the risk-free interest rate, volatility and dividend yield must be applied. The expected life is the average length of time in which we expect our employees to exercise their options. The risk-free interest rate is based on the expected U.S. Treasury rate over the expected life. Expected stock volatility reflects movements in our stock price over a historical period that matches the expected life of the options. The dividend yield assumption is based on our recent history of paying quarterly dividends and our expectation that the Board of Directors will continue to declare quarterly dividends at the same rate for the expected life of options granted.

Retained-Insurance Liabilities

Our business exposes us to the risk of liabilities arising out of our operations. For example, liabilities may arise out of claims of employees, customers or other third parties for personal injury or property damage occurring in the course of our operations. We manage these risks through various insurance contracts from third party insurance carriers. We, however, retain an insurance risk for the deductible portion of each claim. For example, the deductible under our loss-sensitive worker’s compensation insurance policy is up to $0.5 million per claim. An independent, third party actuary is engaged to estimate the ultimate costs of certain retained insurance risks. Actuarial determination of our estimated retained-insurance liability is based upon the following factors:

Our estimate of retained-insurance liabilities is subject to change as new events or circumstances develop which might materially impact the ultimate cost to settle these losses. During the three months ended July 29, 2007 and July 30, 2006 we experienced no significant adjustments to our estimates.

Results of Operations

The following discussion provides a summary of operating results for the three months ended July 29, 2007, compared to the results for the three months ended July 30, 2006.

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Net sales.

Net sales for the three months ended July 29, 2007 were $753.5 million, an increase of $79.4 million, or 11.8%, compared to $674.1 million for the three months ended July 30, 2006.

Net sales in our Consumer Products reportable segment were $444.6 million for the three months ended July 29, 2007, an increase of $24.0 million or 5.7% compared to the three months ended July 30, 2006. This increase was driven by growth in new product sales, increased volume in certain existing products and pricing, all primarily in fruit products. These increases were partially offset by declines in albacore tuna sales.

Net sales in our Pet Products reportable segment were $308.9 million for the three months ended July 29, 2007, an increase of $55.4 million or 21.9% compared to $253.5 million for the three months ended July 30, 2006. The increase was primarily driven by a full quarter of sales related to the Meow Mix and Milk-Bone acquisitions which were completed during the first quarter of fiscal 2007, as well as growth in Meow Mix and Milk-Bone products, new product sales and pricing.

Cost of products sold. Cost of products sold for the three months ended July 29, 2007 was $568.2 million, an increase of $58.5 million, or 11.5%, compared to $509.7 million for the three months ended July 30, 2006. The increase was due to increased sales volumes resulting from the acquisitions and new products, as well as continued cost increases. Our cost increases were primarily due to higher ingredient, commodity and raw product and other related costs, particularly in grains, fats and oils which primarily impacted our Pet Products segment, and in fish which primarily impacted our Consumer Products segment.

Gross margin. Our gross margin percentage for the three months ended July 29, 2007 increased 0.2 points to 24.6%, compared to 24.4% for the three months ended July 30, 2006. Net pricing benefited gross margin by 0.9 margin points and product mix benefited gross margin by 0.7 margin points. These benefits were almost entirely offset by a 1.4 margin point reduction related to the higher costs noted above.

Selling, general and administrative expense. Selling, general and administrative (“SG&A”) expense for the three months ended July 29, 2007 was $141.2 million, an increase of $17.7 million, or 14.3%, compared to SG&A of $123.5 million for the three months ended July 30, 2006. This increase was primarily driven by the absence of the $9.5 million gain on the sale of a perpetual license for S&W branded dry soaked beans and related products and the sale of the rights to the S&W trademark in Australia and New Zealand. In addition, marketing expense in the Pet Products segment was higher primarily as a result of the acquisitions. SG&A costs also included transformation-related expenses of $5.7 million for the three months ended July 29, 2007, compared to $9.2 million for the three months ended July 30, 2006. There were no integration costs for the three months ended July 29, 2007, compared to $2.2 million in the three months ended July 30, 2006.

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Operating income.

Operating income for the three months ended July 29, 2007 was $44.1 million, an increase of $3.2 million, or 7.8%, compared to operating income of $40.9 million for the three months ended July 30, 2006.

Our Consumer Products reportable segment operating income decreased by $11.9 million, or 46.1%, to $13.9 million for the three months ended July 29, 2007 from $25.8 million for the three months ended July 30, 2006. This decrease was driven by the absence of the $9.5 million gain on the S&W-related sales mentioned above, as well as higher fish costs and higher raw product costs, partially offset by pricing.

Our Pet Products reportable segment operating income increased by $10.8 million, or 29.5%, to $47.4 million for the three months ended July 29, 2007 from $36.6 million for the three months ended July 30, 2006. This increase was driven primarily by the acquisitions, the absence of integration costs and pricing, partially offset by the increased costs described above.

Our corporate expenses decreased by $4.3 million during the three months ended July 29, 2007 compared to the prior year period. This decrease resulted primarily from a $4.0 million decrease in transformation-related expenses from $9.2 million for the three months ended July 30, 2006 to $5.2 million for the three months ended July 29, 2007.

Interest expense. Interest expense for the three month period ended July 29, 2007 was $38.0 million, reflecting an increase of $7.5 million compared to interest expense of $30.5 million for the three months ended July 30, 2006. This increase was primarily driven by higher average debt levels. We expect our interest expense for the full year to be relatively flat compared to fiscal 2007 levels.

Provision for Income Taxes. The effective tax rate for the three months ended July 29, 2007 was 36.4% compared to 26.7% for the three months ended July 30, 2006. This increase is primarily due to the reversal of a portion of the valuation allowance related to foreign net operating loss carryforwards in fiscal 2007, partially offset by the effect of the extension of the tax credit for companies operating in American Samoa and the research tax credit not reflected in the first quarter of fiscal 2007.

Loss from Discontinued Operations. The loss from discontinued operations of $1.2 million for the three months ended July 30, 2006 was primarily related to minor activities and changes in estimates as we performed the final wind-down of items related to the private label soup, food service soup and infant feeding businesses sold in the fourth quarter of fiscal 2006.

Liquidity and Capital Resources

We have cash requirements that vary based primarily on the timing of our inventory production for fruit, vegetable and tomato items. Inventory production relating to these items typically peaks during the first and second fiscal quarters. Our most significant cash needs relate to this seasonal inventory production, as well as to continuing cash requirements related to the production of our other products. In addition, our cash is used for the repayment, including interest and fees, of our primary debt obligations (i.e. our revolving credit facility and term loans under our senior credit facility, our senior subordinated notes and, if necessary, our letters of credit), contributions to our pension plans, expenditures for capital assets, lease payments for some of our equipment and properties, expenditures related to our transformation plan, payment of dividends, and other general business purposes. Although we expect to continue to pay dividends, the declaration and payment of future dividends, if any, is subject to determination by our Board of Directors each quarter and is limited by our senior credit facility and indentures. We may from time to time consider other uses for our cash flow from operations and

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other sources of cash. Such uses may include, but are not limited to, acquisitions, future transformation or restructuring plans or share repurchases. Our primary sources of cash are typically funds we receive as payment for the products we produce and sell and from our revolving credit facility.

In August 2006, the Pension Protection Act of 2006 (the “Act”) was signed into law. This legislation will ultimately result in accelerated rates of funding to our defined benefit pension plans and encourages employers to fully fund their defined benefit pension plans by 2011 by imposing certain consequences beginning in calendar 2008 for plans that do not meet certain funding levels. We currently expect to make contributions of approximately $41 million in fiscal 2008, which includes a minimum contribution of approximately $16 million and an incremental contribution of approximately $25 million. We currently anticipate making the incremental contribution in fiscal 2008 as a result of the Act. If we do not make the incremental contribution in fiscal 2008, among other things, more frequent contributions (quarterly instead of annually), additional contributions in fiscal 2009 and beyond, and agreements with the Pension Benefit Guarantee Corporation may be required, and the form of benefit payments to participants could be impacted. Refer to Note 12 to the Consolidated Financial Statements in our 2007 Annual Report for a description of our defined benefit pension plans.

We believe that cash flow from operations and availability under our revolving credit facility will provide adequate funds for our working capital needs, planned capital expenditures, debt service obligations and planned pension plan contributions for at least the next 12 months.

Our debt consists of the following, as of the dates indicated:

We borrowed $115.6 million from the revolving credit facility during the three months ended July 29, 2007. A total of $54.0 million was repaid during the three months ended July 29, 2007. As of July 29, 2007, the net availability under the revolving credit facility, reflecting $47.8 million of outstanding letters of credit, was $319.6 million. The blended interest rate on the revolving credit facility was approximately 7.46% on July 29, 2007. Additionally, to maintain availability of funds under the revolving credit facility, we pay a 0.375% commitment fee on the unused portion of the revolving credit facility.

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Scheduled maturities of long-term debt are $22.0 million for the remainder of fiscal 2008. Scheduled maturities of long-term debt for each of the five succeeding fiscal years are as follows (in millions):

Restrictive and Financial Covenants

Agreements relating to our long-term debt, including the credit agreement governing our senior credit facility (as amended through August 15, 2006, the “Amended Senior Credit Facility”) and the indentures governing the senior subordinated notes, contain covenants that restrict the ability of Del Monte Corporation and its subsidiaries, among other things, to incur or guarantee indebtedness, issue capital stock, pay dividends on and redeem capital stock, prepay certain indebtedness, enter into transactions with affiliates, make other restricted payments, including investments, incur liens, consummate asset sales and enter into consolidations or mergers. Del Monte Corporation, the primary obligor on our debt obligations, is a direct, wholly-owned subsidiary of Del Monte Foods Company. Certain of these covenants are also applicable to Del Monte Foods Company. We are required to meet a maximum leverage ratio and a minimum fixed charge coverage ratio under the Amended Senior Credit Facility. The maximum permitted leverage ratio decreases over time and the minimum fixed charge coverage ratio increases over time, as set forth in the Amended Senior Credit Facility. As of July 29, 2007, we believe that we are in compliance with all such financial covenants.

Compliance with these covenants is monitored periodically in order to assess the likelihood of continued compliance. Our ability to continue to comply with these covenants may be affected by events beyond our control. If we are unable to comply with the covenants under the senior credit facility or any of the indentures governing our senior subordinated notes, there would be a default, which if not waived, could result in the acceleration of a significant portion of our indebtedness.

Cash Flows

During the three months ended July 29, 2007, our cash and cash equivalents decreased by $1.0 million and during the three months ended July 30, 2006, our cash and cash equivalents decreased by $447.8 million.

Operating Activities. Cash used in operating activities for the three months ended July 29, 2007 was $26.1 million, compared to $2.0 million for the three months ended July 30, 2006. This fluctuation was primarily driven by lower inventory levels in the prior year quarter due to low peach yields and later starts for the tomato and vegetable packs. The cash requirements of the Consumer Products operating segment vary significantly during the year to coincide with the seasonal growing cycles of fruit, vegetables and tomatoes. The vast majority of our fruit, vegetable and tomato inventories are produced during the packing season, from June through October, and then depleted during the remaining months of the fiscal year. As a result, the vast majority of our total cash flow is generated during the second half of the fiscal year.

Investing Activities. Cash used in investing activities for the three months ended July 29, 2007 was $22.4 million compared to $1,266.5 million for the three months ended July 30, 2006. Cash used in investing activities for the three months ended July 29, 2007 consisted primarily of capital spending. Capital spending during the first three months of fiscal 2008 was $6.8 million higher than during the first three months of fiscal 2007 driven by increased overall spending associated with the execution of our transformation plan and other capital projects. Cash used in investing activities for the three months ended July 30, 2006 consisted primarily of cash used for the Meow Mix and Milk-Bone acquisitions.

Financing Activities. Cash provided by financing activities for the three months ended July 29, 2007 was $48.3 million compared to $820.5 million for the three months ended July 30, 2006. During the first three months of fiscal 2008, we borrowed a net of $61.1 million in short-term borrowings as a result of incurring normal seasonal borrowings for operations.

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In addition, during the three months ended July 29, 2007 and July 30, 2006, we borrowed $0 and $645.0 million, respectively in Term B loans and made scheduled repayments of $7.4 million and $50.4 million, respectively, towards our outstanding term loan principal. We also paid $8.1 million and $8.0 million in dividends during the three months ended July 29, 2007 and July 30, 2006, respectively. The $820.5 million of cash provided by financing activities for the three months ended July 30, 2006 resulted primarily from borrowings as a result of financing the acquisitions.

Recently Issued Accounting Standards

In June 2006, the FASB issued Interpretation No. 48, “Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109,” (“FIN 48”), which seeks to reduce the diversity in practice associated with the accounting and reporting for uncertainty in income tax positions. This interpretation prescribes a comprehensive model for the financial statement recognition, measurement, presentation and disclosure of uncertain tax positions taken or expected to be taken in income tax returns. An uncertain tax position is recognized if it is determined that it is more likely than not to be sustained upon examination. The tax position is measured as the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. The cumulative effect of applying the provisions of this interpretation is reported as a separate adjustment to the opening balance of retained earnings in the year of adoption. FIN 48 is effective for fiscal years beginning after December 15, 2006. We have adopted the provisions of FIN 48 as of April 30, 2007. See Note 10 “Income Taxes” of the Notes to Condensed Consolidated Financial Statements for the impact of adoption of these provisions.

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We have a risk management program which was adopted with the objective of minimizing our exposure to changes in commodity and other prices and foreign currency exchange rates. We do not trade or use instruments with the objective of earning financial gains on price fluctuations alone or use instruments where there are not underlying exposures. In prior periods, our risk management program included the objective of minimizing our exposure to changes in interest rates. In the future, we may choose to incorporate this objective into our risk management program again.

During the three months ended July 29, 2007, we were primarily exposed to the risk of loss resulting from adverse changes in interest rates, commodity and other prices and foreign currency exchange rates, which affect interest expense on our floating-rate obligations and the cost of our raw materials and other inputs, respectively.

Interest Rates. Our debt primarily consists of fixed rate notes and floating rate term loans. We also use our floating rate revolving credit facility primarily to fund seasonal working capital needs and other uses of cash. Interest expense on our floating rate debt is typically calculated based on a fixed spread over a reference rate, such as LIBOR. Therefore, fluctuations in market interest rates will cause interest expense increases or decreases on a given amount of floating rate debt.

The table below presents our market risk associated with debt obligations as of July 29, 2007. The fair values are based on quoted market prices. Variable interest rates disclosed represent the weighted average rates in effect on July 29, 2007.