ITEM 1. Financial Statements

See Notes to Consolidated Financial Statements.

See Notes to Consolidated Financial Statements.

See Notes to Consolidated Financial Statements.

Business and Basis of Presentation. Del Monte Foods Company ("DMFC") and its wholly-owned subsidiary, Del Monte Corporation (together with DMFC, "Del Monte"), operate in one business segment: the manufacturing and marketing of processed foods, primarily processed vegetables, fruit and tomato products.

The accompanying unaudited consolidated financial statements at March 31, 2002 and for the three and nine months ended March 31, 2002 and 2001 have been prepared in accordance with generally accepted accounting principles 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 footnotes required by generally accepted accounting principles for complete financial statements. These statements include all adjustments (consisting of normal recurring entries) which, in the opinion of management, are necessary for a fair presentation of financial position, results of operations and cash flows. Operating results for the three and nine months ended March 31, 2002 are not necessarily indicative of the results that may be expected for the year ended June 30, 2002.

The balance sheet at June 30, 2001 has been derived from audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements as of and for the year ended June 30, 2001, and notes thereto, included in Del Monte's Annual Report on Form 10- K.

Critical Accounting Policies and Estimates. Del Monte's consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires Del Monte to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. On an on-going basis, Del Monte re-evaluates all of its estimates, including those related to trade promotions, coupon redemption, retirement benefits, retained-insurance liabilities and intangibles and long-lived assets. Del Monte bases its estimates on historical experience and on various other assumptions that are believed 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. Actual results may materially differ from these estimates under different assumptions or conditions and as additional information becomes available in future periods.

Depreciation and amortization. Depreciation and amortization for the three and nine months ended March 31, 2002 and 2001 consisted of depreciation of plant and equipment and leasehold amortization, amortization of deferred debt issuance costs, and amortization of intangible assets. In addition, the three and nine months ended March 31, 2001 included acceleration of depreciation resulting from the adjustment of certain assets' remaining useful lives to match the period of use prior to plant closure and amortization of original issue discount relating to debt.

For the three and nine months ended March 31, 2001, amortization of intangible assets includes amortization of all intangible assets. For the three and nine months ended March 31, 2002, as a result of Del Monte's July 1, 2001 adoption of Statement of Financial Accounting Standards (SFAS) No. 142 "Goodwill and Other Intangible Assets" ("SFAS 142") issued by the Financial Accounting Standards Board, amortization of intangible assets only consists of amortization related to intangible assets with finite useful lives. In accordance with SFAS 142, intangible assets with indefinite lives are no longer amortized.

                                           Three Months Ended     Nine Months Ended
                                                March 31,               March 31,
                                       ----------------------  ----------------------
                                          2002        2001        2002        2001
                                       ----------  ----------  ----------  ----------


Depreciation of plant and equipment
  and leasehold amortization......... $      7.6  $      7.2  $     22.4  $     22.6
Accelerated depreciation.............         --         0.3          --         0.8
Amortization of deferred debt
  issuance costs.....................        0.8         0.8         2.4         2.6
Amortization of intangibles..........         --         0.5         0.1         1.5
                                       ----------  ----------  ----------  ----------
   Depreciation and amortization..... $      8.4  $      8.8  $     24.9  $     27.5
                                       ==========  ==========  ==========  ==========

Adoption of EITF 00-14 and 00-25. Effective July 1, 2001, Del Monte elected to adopt two new accounting requirements issued by the Emerging Issues Task Force, or EITF. The two requirements are Issue 00-14 "Accounting for Certain Sales Incentives" ("EITF 00-14") and Issue 00-25 "Vendor Income Statement Characterization of Consideration to a Purchaser of the Vendor's Products or Services" ("EITF 00-25"). Both Issues were codified by Issue No. 01-9 "Accounting for Consideration Given by a Vendor to a Customer (Including a Reseller of the Vendor's Products)" in November, 2001. The consensus reached in EITF 00-14 and EITF 00-25 are effective for fiscal quarters beginning after December 15, 2001, which for Del Monte would have been the third fiscal  quarter of fiscal year 2002. Del Monte opted for early adoption in the first quarter of fiscal year 2002.

EITF 00-14 addresses the recognition, measurement, and income statement classification of sales incentives offered voluntarily by a vendor without charge to its customers (or consumers) that can be used in, or are exercisable by a consumer, as a result of a single exchange transaction. As a result of the adoption of EITF 00-14, consumer promotion costs relating to coupon redemption, which previously were included in selling, administrative and general expense, are now reclassified and presented as a reduction of revenue. Prior year comparative amounts have been reclassified to comply with EITF 00-14.

EITF 00-25 addresses the recognition, measurement and income statement classification of consideration, other than that directly addressed by EITF 00-14, paid from a vendor to a retailer or wholesaler. As a result of the adoption of EITF 00-25, customer promotion costs relating to performance allowances, which previously were included in selling, administrative and general expense, are now reclassified and presented as a reduction of revenue. Prior year comparative amounts have been reclassified to comply with EITF 00-25. The combined effect of EITF 00-14 and EITF 00-25 was a reduction of $54.7 and $172.5 in both net sales and selling, administrative and general expenses for the previously reported three and nine months ended March 31, 2001, respectively.

Upon adoption of the EITF requirements described above, net sales is comprised of gross sales reduced by consumer promotion costs relating to coupon redemption, customer promotion costs relating to performance allowances, and, routine returns and discounts. Customers generally do not have the right to return product unless damaged or defective. Del Monte's revenue recognition policy is to recognize revenue from sales of product, and related cost of products sold, when pervasive evidence of an arrangement exists, delivery has occurred, the seller's price is fixed or determinable and collectibility is reasonably assured. This generally occurs when the customer receives the product at which time title passes to the customer.

Reclassifications. Certain prior year balances have been reclassified to conform to the current year presentation.

S&W Acquisition. On March 13, 2001, Del Monte acquired the S&W branded food business, including certain trademarks and existing inventory, from Tri Valley Growers. S&W branded products include processed fruits, tomatoes, beans, specialty sauces and vegetables. The total cash purchase price was $35.4. Del Monte also incurred approximately $1.0 in transaction expenses for closing costs and  accrued $1.3 of acquisition-related liabilities. The remaining balance of the acquisition-related liabilities at March 31, 2002 was $0.9. The transaction has been accounted for using the purchase method of accounting. The total purchase price has been allocated to the tangible and intangible assets acquired based on their respective fair values. The total purchase price was allocated $25.1 to inventory and $12.6 to trademark intangible assets.

SunFresh Acquisition. On September 1, 2000, Del Monte acquired the rights to the SunFresh brand citrus and tropical fruits line of UniMark Group, Inc. ("UniMark"), as well as certain finished goods inventory and UniMark's McAllen, Texas distribution center. Concurrently, Del Monte executed a five-year supply agreement under which a UniMark affiliate will produce certain chilled and processed fruit products at UniMark's existing facility in Mexico. This product will be purchased by Del Monte at current market rates. The original purchase price was $14.5, of which $13.5 was paid solely in cash at closing for those assets. The purchase price was subject to adjustments based on the final calculation of inventory on-hand as of the closing date. Based on this calculation, the total purchase price was revised to $12.7. Since the cash paid exceeded the final purchase price by $0.8, UniMark reimbursed this amount to Del Monte by the end of fiscal 2001. The transaction has been accounted for using the purchase method of accounting. The total purchase price has been allocated to the tangible and intangible assets acquired based on their respective fair values. The total purchase price was allocated $5.9 to inventory, $2.7 to property, plant and equipment and $4.1 to trademark intangible assets.

The major classes of inventory are as follows:

                                                   March 31,    June 30,
                                                      2002        2001
                                                   ----------  ----------
  Finished product............................... $    368.2  $    301.1
  Raw materials and supplies.....................       12.9        16.1
  Other, principally packaging material..........       92.7       120.3
                                                   ----------  ----------
     Total inventories........................... $    473.8  $    437.5
                                                   ==========  ==========

Inventories are stated at the lower of cost or market. The cost of substantially all inventories is determined using the LIFO method. Del Monte has established various LIFO pools that have measurement dates coinciding with the natural business cycles of Del Monte's major inventory items. Inflation has had a minimal impact on production costs since Del Monte adopted the LIFO method as of July 1, 1991. As of March 31, 2002 and June 30, 2001, the LIFO reserve was a debit balance of $6.4 and $11.0, respectively. While Del Monte has historically mitigated the inflationary impact of increases in its costs by controlling its overall cost structure, Del Monte may not be able to mitigate inflationary impacts in the future.

NOTE 4 - Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share:

                                           Three Months Ended     Nine Months Ended
                                                March 31,               March 31,
                                       ----------------------  ----------------------
                                          2002        2001        2002        2001
                                       ----------  ----------  ----------  ----------
Basic:
Numerator:
Income before extraordinary item..... $    11.4  $     10.7  $     25.0  $     25.6
Extraordinary loss, net of tax benefit      0.7          --         0.7          --
                                      ----------  ----------  ----------  ----------
  Numerator for basic earnings
  per share -- income attributable
  to common shares................... $    10.7  $     10.7  $     24.3  $     25.6
                                      ==========  ==========  ==========  ==========
Denominator:
  Denominator for basic earnings per
   share -- weighted average shares.. 52,288,270  52,236,010  52,277,385  52,229,297
                                      ==========  ==========  ==========  ==========
Basic income per common share before
  extraordinary item................. $    0.22  $     0.21  $     0.48  $     0.49
Extraordinary loss per common share,
  net of tax benefit.................     (0.02)         --       (0.02)         --
                                      ----------  ----------  ----------  ----------
Basic income per common share........ $    0.20  $     0.21  $     0.46  $     0.49
                                      ==========  ==========  ==========  ==========

Diluted:
Numerator:
Income before extraordinary item..... $    11.4  $     10.7  $     25.0  $     25.6
Extraordinary loss, net of tax benefit      0.7          --         0.7          --
                                       ----------  ----------  ----------  ----------
  Numerator for diluted earnings
  per share -- income attributable
  to common shares................... $    10.7  $     10.7  $     24.3  $     25.6
                                      ==========  ==========  ==========  ==========
Denominator:
  Weighted average shares............ 52,288,270  52,236,010  52,277,385  52,229,297
  Effect of dilutive securities --
     stock options...................    751,319     778,093     708,823     463,047
                                      ----------  ----------  ----------  ----------
  Denominator for diluted earnings
     per share -- weighted average
     shares and equivalents.......... 52,039,589  53,014,103  52,986,208  52,692,344
                                      ==========  ==========  ==========  ==========

Diluted income per common share before
     extraordinary item.............. $    0.21  $     0.20  $     0.47  $     0.49
Extraordinary loss per common share,
     net of tax benefit..............     (0.01)         --       (0.01)         --
                                      ----------  ----------  ----------  ----------
Diluted income per common share...... $    0.20  $     0.20  $     0.46  $     0.49
                                      ==========  ==========  ==========  ==========

Options outstanding in the amounts of 2,668,216 and 1,596,802 at March 31, 2002 and 2001, respectively, were not included in the computation of diluted earnings per share for the three months ended March 31, 2002 and 2001, respectively, because these options' exercise prices were greater than the average market price of the common shares for those periods. Options outstanding in the amounts of 2,668,216 and 1,606,852 at March 31, 2002 and 2001, respectively, were not included in the computation of diluted earnings per share for the nine months ended March 31, 2002 and 2001, respectively, because these options' exercise prices were greater than the average market price of the common shares for those periods.

As permitted under Del Monte's term loan agreement, Del Monte made prepayments of $65.0 during the three months ended March 31, 2002. As a result, Del Monte incurred an extraordinary loss of $1.1 ($0.7 net of tax) related to the write-off of previously capitalized debt issuance costs. In addition, Del Monte made an additional prepayment of $35.0 in April 2002. This will result in an additional extraordinary loss of $0.6 ($0.4 net of tax) related to the write-off of previously capitalized debt issuance costs in the three months ended June 30, 2002. Del Monte did not incur any prepayment penalties as a result of these prepayments. The terms and conditions of the term loan agreement, as disclosed in the audited consolidated financial statements as of and for the year ended June 30, 2001, did not change as a result of these prepayments. However, the scheduled debt repayments in future periods have been adjusted to reflect these prepayments.

Del Monte uses derivatives only for purposes of managing risk associated with the underlying exposures and does not trade or use instruments with the objective of earning financial gains on interest rate fluctuations alone, nor does it use instruments where there are not underlying exposures. Management believes that its use of derivative instruments to manage risk is in Del Monte's best interest. In addition, the terms of Del Monte's revolving and term loan agreement required Del Monte to enter into and maintain one or more permitted swap obligations (as defined in the loan agreement) for, among other things, a notional amount of at least $200.0 and for a term of at least three years. To accomplish this, and to limit its exposure to interest rate increases, Del Monte entered into interest rate swaps on August 3, 2001. The aggregate notional amount of the swaps is $200.0 and the swaps are in effect from September 28, 2001 through September 30, 2004. The swaps are with several banks and fix the three-month LIBOR at a weighted average of 4.91% per annum on the $200.0 notional amount. This fixed interest rate is measured against three- month LIBOR for purposes of settlement. The fair value of each swap is determined independently by each bank, using its own valuation model, based on the projected three-month LIBOR yield curve. According to each bank, valuations based on other models may yield different results.

The swaps were not initially designated as hedging instruments under SFAS 133 "Accounting for Derivative Instruments and Hedging Activities" (as amended by SFAS 137 and 138) when they were entered into on August 3, 2001. Changes in fair value of the swaps from that date to their designation date as hedging instruments are reflected in the Consolidated Statements of Income for the three and nine months ended March 31, 2002. The fair value of the swaps at January 23, 2002 was a liability of $5.8. This liability will be credited to interest expense, in the Consolidated Statements of Income, over the remaining life of the swap agreements. This credit offsets amounts to be paid to the banks under the swap agreements. On January 23, 2002, Del Monte designated the swaps as cash flow hedging instruments of market rate interest risk under SFAS 133. The changes in the fair value of the swaps subsequent to the January 23, 2002 designation date are recorded in other comprehensive income in Stockholders' Equity in an amount equal to the effective portion (determined in accordance with SFAS 133) of the hedging instruments. The remaining amount, if any, equal to the ineffective portion (determined in accordance with SFAS 133) of the hedging instruments is recorded as other income in the Consolidated Statements of Income.

The fair value of the swaps at December 31, 2001, January 23, 2002 and March 31, 2002 was a liability of $4.5, $5.8 and $2.7, respectively. For the three and nine months ended March 31, 2002, the change in fair value of the swaps through January 23, 2002, resulted in a loss on financial instruments of $1.3 ($0.8 net of tax) and $5.8 ($3.5 net of tax), respectively. For the three and nine months ended March 31, 2002, the change in fair value of the swaps from January 23, 2002 to March 31, 2002 resulted in other comprehensive income of $1.5 ($0.9 net of tax) for both periods. The ineffective portion of the hedging instruments resulted in a gain of $0.2 which is recorded in other income. Interest expense for the three and nine months ended March 31, 2002 was increased by $1.5 and $2.7, respectively, due to the impact of the swaps. Interest expense for both the three and nine months ended March 31, 2002 includes a credit to interest expense of $1.4, reflecting a release to earnings from the $5.8 liability, attributed to the January 23, 2002 to March 31, 2002 period. An additional credit to interest expense of $1.5 is expected for the fourth quarter of this fiscal year. A total of $3.4 of additional credits to interest expense are expected for fiscal 2003. Settlements accrued for payment to the swap counterparties offset these releases to earnings from this liability.

In fiscal 1998, management committed to a plan to consolidate processing operations. In connection with this plan, Del Monte established an accrual of $6.6 in fiscal 1998 relating to severance and benefit costs for 433 employees to be terminated. At the beginning of the 2002 fiscal year, a balance of $0.7 remained in this accrual. For the nine months ended March 31, 2002, $0.5 was paid in severance thereby reducing this accrual and leaving a balance of $0.2 at March 31, 2002 for eight employees.

In January 2001, Del Monte closed its tomato processing plant located in Woodland, California. This closure was part of management's plan to consolidate its California manufacturing operations in order to enhance the efficiency of processing operations; to reduce the production of lower-margin commodity products, such as bulk tomato paste; and to allow Del Monte to better meet the competitive challenges of the market. Del Monte's Hanford, California facility is the sole internal source of bulk tomato paste, a component of several of Del Monte's tomato products.

In connection with the Woodland closure, Del Monte entered into a purchase agreement with a buyer for the plant in the fourth quarter of fiscal 2001 for a sales price of $9.0. The transaction was closed in the first quarter of fiscal 2002 and Del Monte incurred closing costs of $0.1. In fiscal 2001, Del Monte recorded a charge of $8.0 ($10.5 recorded in the second quarter, less a $2.5 adjustment in the fourth quarter), representing the write-off of assets no longer used in operations; $0.2 of the write- off was reversed in the first quarter of fiscal 2002 upon the completion of the transaction. As part of the transaction, the buyer provided Del Monte $2.0 in cash and a $7.0 interest-bearing promissory note. Interest on this promissory note is charged at three- month LIBOR plus a premium and is payable on a quarterly basis. The buyer will pay the principal of the loan in two equal installments in 2005 and 2006. Del Monte has a first-in priority lien and encumbrance on the plant.

NOTE 8 - Comprehensive Income

The Company reports changes in equity from all sources. The following table summarizes changes in comprehensive income for the three and nine months ended March 31, 2002 and March 31, 2001.

Statement of Comprehensive income:      Three Months Ended      Nine Months Ended
                                              March 31,               March 31,
                                       ----------------------  ----------------------
                                          2002        2001        2002        2001
                                       ----------  ----------  ----------  ----------
Net income........................... $     10.7  $     10.7  $     24.3  $     25.6
Other comprehensive income:
  Cash flow hedges:
  Fair value change in swaps.........        1.7          --         1.7          --
  Ineffective portion, reclassified
    into earnings....................       (0.2)         --        (0.2)         --
                                       ----------  ----------  ----------  ----------
Other comprehensive income...........        1.5          --         1.5          --
Income tax related to items of
  other comprehensive income.........        0.6          --         0.6          --
                                       ----------  ----------  ----------  ----------
Other comprehensive income,
  net of tax.........................        0.9          --         0.9          --
                                       ----------  ----------  ----------  ----------
Comprehensive income................. $     11.6  $     10.7  $     25.2  $     25.6
                                       ==========  ==========  ==========  ==========

Del Monte's effective tax rate for the three and nine months ended March 31, 2002 was lower than the statutory U.S. federal income tax rate due to the effect of reversing a portion of the valuation allowance.

In July 2001, the Financial Accounting Standards Board ("FASB") issued SFAS No. 141, "Business Combinations" ("SFAS 141"). The provisions of SFAS 141 are required to be adopted immediately. SFAS 141 requires that the purchase method of accounting be used for all business combinations initiated after June 30, 2001, as well as all purchase method business combinations completed after June 30, 2001. SFAS 141 also specifies certain criteria that must be met for intangible assets acquired in a purchase method business combination to be recognized and reported apart from goodwill.

The FASB issued SFAS 142 simultaneously with SFAS 141. SFAS 142 requires that goodwill and intangible assets with indefinite useful lives no longer be amortized, but instead be tested for impairment at least annually in accordance with the provisions of SFAS 142. SFAS 142 also requires that intangible assets with estimable useful lives be amortized over their respective estimated useful lives, and reviewed for impairment in accordance with SFAS Statement No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of". Del Monte chose to early adopt the provisions of SFAS 142 during the first quarter of fiscal 2002.

Upon the adoption of SFAS 142, as of July 1, 2001, Del Monte has ceased amortization of its intangible assets with indefinite useful lives. Del Monte reassessed the useful lives and residual values of its intangible assets acquired, and concluded that the majority of its trademark and distribution rights have indefinite lives. Del Monte has performed impairment tests on its intangible assets with indefinite useful lives in accordance with the provisions of SFAS 142 and identified no impairment losses relating to these intangible assets.

Del Monte does not have any recorded goodwill. A summary of intangible assets follows:

                                                    March 31,
                                                       2002
                                                    ----------
Unamortized intangible assets:
  Trademarks.....................................  $     31.7
  Distribution rights............................        24.4
                                                    ----------
  Total unamortized intangible assets............  $     56.1
                                                    ==========

Amortized trademark intangible assets:
  Carrying amount................................  $      0.6
  Accumulated amortization.......................        (0.2)
                                                    ----------
  Total amortized trademark intangible assets, net $      0.4
                                                    ==========

Amortization expense for the three and nine months March 31, 2002 was zero and $0.1, respectively.

The estimated amortization expense for each of the two succeeding fiscal years is as follows:

2003 ............................................ $      0.2
2004 ............................................        0.2
                                                   ----------
                                                  $      0.4
                                                   ==========

The following tables reconcile reported net income to adjusted net income, and earnings per share, as a result of the adoption of SFAS 142:

                                           Three Months Ended      Nine Months Ended
                                               March 31,              March 31,
                                       ----------------------  ----------------------
                                            2002        2001        2002        2001
                                       ----------  ----------  ----------  ----------

Income before extraordinary item..... $     11.4  $     10.7  $     25.0  $     25.6
Add back:
  Trademark amortization.............         --         0.1          --         0.3
  Distribution rights amortization...         --         0.2          --         0.7
                                       ----------  ----------  ----------  ----------
Adjusted income before
  extraordinary item.................       11.4        11.0        25.0        26.6
Extraordinary loss, net of tax benefit       0.7          --         0.7          --
                                       ----------  ----------  ----------  ----------
  Adjusted net income................ $     10.7  $     11.0  $     24.3  $     26.6
                                       ==========  ==========  ==========  ==========

Basic earnings per share:
Basic income per common share before
  extraordinary item................. $     0.22  $     0.21  $     0.48  $     0.49
  Trademark amortization.............         --          --          --        0.01
  Distribution rights amortization...         --          --          --        0.01
                                       ----------  ----------  ----------  ----------
Adjusted basic income per common share
  before extraordinary item..........       0.22        0.21        0.48        0.51
Extraordinary loss per common share,
  of tax benefit.....................      (0.02)         --       (0.02)         --
                                       ----------  ----------  ----------  ----------
  Adjusted basic income per
    common share..................... $     0.20  $     0.21  $     0.46  $     0.51
                                       ==========  ==========  ==========  ==========

Diluted earnings per share:
Diluted income per common share before
  extraordinary item................. $     0.21  $     0.20  $     0.47  $     0.49
  Trademark amortization.............         --          --          --        0.01
  Distribution rights amortization...         --        0.01          --        0.01
                                       ----------  ----------  ----------  ----------
Adjusted diluted income per common
  share before extraordinary item....       0.21        0.21        0.47        0.51
Extraordinary loss per common share,
  net of tax benefit.................      (0.01)         --       (0.01)         --
                                       ----------  ----------  ----------  ----------
  Adjusted diluted income per
    common share..................... $     0.20  $     0.21  $     0.46  $     0.51
                                       ==========  ==========  ==========  ==========

ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Net sales. Net sales for the three and nine months ended March 31, 2002 increased by $15.2 million, or 4.6%, and $57.6 million, or 6.1%, respectively, compared to the same periods of the prior year. The increase was due primarily to the acquisitions of the S&W and SunFresh businesses and the impact of a July 1 retail price increase, net of the impact of higher trade promotion expenses.

For the three and nine months ended March 31, 2002, S&W and SunFresh combined contributed $24.8 million and $71.1 million, respectively, to the increase in net sales of Del Monte. The July 1 retail price increase, net of increased promotion expenses, contributed $2.4 million and $4.6 million to the increase in net sales for the three and nine months ended, respectively. However, Del Monte also experienced lower foodservice sales of $8.3 million and $17.7 million for the three and nine months ended, respectively, due to Del Monte's decision not to meet aggressive competitive pricing for selected fruit and tomato items, and lower bulk tomato bin paste sales.

Del Monte continued to respond to consumer trends in the single-serve fruit snacking business by introducing two new Fruit & Gel To-Go items in the first quarter of fiscal 2002. Del Monte also incurred trade promotion expenses to expand its distribution of Del Monte SunFresh processed citrus products acquired in fiscal 2001. These new product introductions and distribution expansion resulted in increases in trade promotion expenses of $0.8 million and $4.5 million, respectively, compared to the same periods last year.

Del Monte continues to be impacted by competitive pressure in the single-serve fruit business, which has resulted, and may continue to result, in higher trade and consumer promotion expenses. Management believes the single-serve fruit business is an important high-growth category and Del Monte expects to continue to invest in this category.

For the 39-week period ended March 31, 2002, Del Monte's market share for vegetables, fruit and tomato solids, was 23.0%, 43.7% and 21.4%, respectively, versus 21.7%, 43.8% and 19.6%, respectively, in the previous year period. Market shares are based on case volume and include S&W beginning at the March 2001 acquisition date. For the 13-week period ended March 31, 2002, Del Monte's market share for vegetables, fruit and tomato solids, was 22.6%, 43.6% and 22.4%, respectively, versus 21.0%, 42.5% and 20.8%, respectively, in the previous year period.

Cost of products sold. Cost of products sold for the three and nine months ended March 31, 2002 increased by $12.5 million, or 4.9%, and $55.0 million, or 7.4%, respectively, compared to the same periods of the prior year. The increase in cost of products sold was due primarily to higher sales volume and higher manufacturing costs. The higher manufacturing costs were due primarily to lower production volumes as a result of management's initiative to reduce inventory levels. The increase in manufacturing costs was somewhat offset by continued cost savings from capital spending initiatives.

Selling, administrative and general expenses. Selling, administrative and general expenses increased by $8.2 million and $19.4 million, respectively, for the three and nine months ended March 31, 2002, as compared to the same periods of the prior year. This increase was due primarily to an increase in sales and marketing expenses to support the  S&W business and new products. In addition, lower returns on pension assets and higher rental expense due to the relocation of the corporate headquarters in December 2000 contributed to the increases over prior year.

Special charges related to plant consolidation. Special charges related to plant consolidation decreased by $1.4 million and $12.8 million, respectively, for the three and nine months ended March 31, 2002, when compared to the same periods of the prior year. For the three and nine months ended March 31, 2002, $0.1 million and $1.2 million, respectively, relate to on- going fixed costs incurred in connection with plant closures.

Included in special charges during the nine months ended March 31, 2001 was the write-off of $10.5 million of assets related to the closure of the Woodland plant, and an accrual of $0.6 million was recorded for severance and benefits costs for employees to be terminated. Del Monte also incurred charges representing accelerated depreciation of $0.3 million and $0.8 million, respectively, during the three and nine months ended March 31, 2001. This accelerated depreciation results from the effects of adjusting the remaining useful lives of certain processing assets to match the period remaining until their use is discontinued due to the closures of operating plants. For the three and nine months ended March 31, 2001, $1.2 million and $2.8 million, respectively, of on-going fixed costs and other period costs incurred in connection with other plant closures were recorded. Del Monte also recorded a $0.7 million reduction of the severance accrual related to the Stockton plant in special charges during the nine months ended March 31, 2001.

Interest expense. Interest expense decreased for the three and nine months ended March 31, 2002 by $5.2 million and $12.6 million, respectively, as compared to the same periods of the prior year, due primarily to lower interest rates and lower average debt balances. Interest expense for the three and nine months ended March 31, 2002 included $1.5 million and $2.7 million, respectively, of interest expense in excess of market rates due to the impact of the interest rate swap agreements. On January 23, 2002, Del Monte designated its interest rate swaps as cash flow hedging instruments in accordance with SFAS 133. Del Monte recorded a liability of $5.8 million representing the fair value of the swaps on January 23, 2002. Interest expense for both the three and nine months ended March 31, 2002 includes a credit to interest expense of $1.4 million, reflecting a release to earnings from the $5.8 million liability attributed to the January 23, 2002 to March 31, 2002 period. See Note 6 of the consolidated financial statements for further information.

Loss on financial instruments. Loss on financial instruments for the three and nine months ended March 31, 2002 was $1.3 million and $5.8 million, respectively, due to the change in fair value of the interest rate swaps before they were designated as hedging instruments on January 23, 2002, as described in Note 6 of the consolidated financial statements.

Other income. Other income for the nine months ended March 31, 2002 represents the reversal of an accrual for a contingent liability no longer required, and an accrual for litigation expense related to Del Monte's recapitalization transaction in 1997. Other income for the nine months ended March 31, 2001 represents the reversal of an accrual for a contingent liability no longer required.

Provision for income taxes. The effective tax rate decreased for the three months ended March 31, 2002, as compared to the prior year period. The difference in effective tax rates was due primarily to additional reduction of the valuation allowance in the current year.

Extraordinary item. The extraordinary item for the three and nine months ended March 31, 2002 consisted of the write-off of $1.1 million ($0.7 million net of tax) of previously capitalized debt issuance costs related to the $65.0 million prepayment of Del Monte's term loan during the three months ended March 31, 2002.

Adjusted EBITDA. Del Monte believes income before income taxes, extraordinary items, and depreciation and amortization expense, plus interest expense (EBITDA), as adjusted to exclude non-recurring or non-cash charges or credits, is a measure used in the financial community to evaluate Del Monte's cash-based operating performance and its ability to provide cash flows to service debt. Del Monte believes that this adjusted EBITDA effectively measures operating cash flow (excluding the effects of working capital changes and capital expenditures) by eliminating the effects of these one-time charges or credits. Non-recurring and non-cash charges include special charges related to plant consolidations, acquisition-related expenses, gains and losses from the change in fair value of the interest rate swaps, income from the reversal of an accrual for a contingent liability and litigation expenses related to Del Monte's recapitalization transaction in 1997. Adjusted EBITDA should not be considered in isolation from, and is not presented as an alternative measure of, operating income or cash flow from operations (as determined in accordance with generally accepted accounting principles). Adjusted EBITDA as presented may not be comparable to similarly titled measures used by other companies.

Adjusted EBITDA was $38.9 million in the current quarter, compared to $44.3 million for the three months ended March 31, 2001. The decrease was due primarily to higher manufacturing costs and higher selling, administrative and general expenses, which exceeded the additional income from higher sales. For the three months ended March 31, 2002, income before income taxes plus interest expense was $29.9 million and was adjusted for special charges, non-cash items and non-recurring charges of $9.0 million. The special charges, non-cash items and non-recurring charges consisted of special charges related to plant consolidation of $0.1 million, depreciation and amortization of $7.6 million (excluding amortization of deferred debt issuance costs of $0.8 million), $1.3 million relating to loss on financial instruments, $0.7 million of litigation expenses related to Del Monte's recapitalization transaction in 1997 and $0.7 million reversal of an accrual related to a contingent liability no longer required.

For the three-month period ended March 31, 2001, income before income taxes plus interest expense was $34.9 million and was adjusted for special charges, non-cash items and non-recurring charges of $9.4 million. The special charges, non- cash items and non-recurring charges consisted of special charges related to plant consolidation of $1.5 million, depreciation and amortization of $7.7 million (excluding accelerated depreciation of $0.3 million and amortization of deferred debt issuance costs of $0.8 million), and $0.2 million of other non-recurring charges.

Adjusted EBITDA was $113.1 million in the current nine-month period, compared to $129.6 million for the nine months ended March 31, 2001. The decrease was due primarily to higher manufacturing costs and higher selling, administrative and general expenses, which exceeded the additional income from higher sales. For the nine months ended March 31, 2002, income before income taxes, plus interest expense was $81.3 million and was adjusted for special charges, non-cash items and non-recurring charges of $31.8 million. The special charges, non-cash items and non-recurring charges consisted of special charges related to plant consolidation of $1.2 million, depreciation and amortization of $22.5 million (excluding amortization of deferred debt issuance costs of $2.4 million), $5.8 million relating to loss on financial instruments, $0.7 million of litigation expenses related to Del Monte's recapitalization transaction in 1997, reversal of an $0.7 million accrual related to a contingent liability no longer required and $2.3 million of non-recurring charges.

For the nine-month period ended March 31, 2001, income before income taxes, plus interest expense was $95.1 million and was adjusted for special charges, non-cash items and non-recurring charges of $34.5 million. The special charges, non- cash items and non-recurring charges of $34.5 million consisted of special charges related to plant consolidation of $14.0 million, primarily due to the write-off of $10.5 million of assets related to the Woodland plant closure, depreciation and amortization of $24.1 million (excluding accelerated depreciation of $0.8 million and amortization of deferred debt issuance costs of $2.6 million), the reversal of an $4.8 million accrual related to a contingent liability no longer required, and $1.2 million of other non-recurring charges.

Del Monte's discussion and analysis of its financial condition and results of operations are based upon Del Monte's consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires Del Monte to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. On an on-going basis, Del Monte re-evaluates all of its estimates, including those related to trade promotions, coupon redemption, retirement benefits, retained-insurance liabilities and intangibles and long-lived assets. Del Monte bases its estimates on historical experience and on various other assumptions that are believed 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. Actual results may materially differ from these estimates under different assumptions or conditions and as additional information becomes available in future periods.

Del Monte believes the following are the more significant judgments and estimates used in the preparation of its consolidated financial statements.

Trade Promotions: Trade promotions are an important component of the sales and marketing of Del Monte's products, and are critical to the support of Del Monte's business. Trade promotion costs include amounts paid to encourage retailers to offer temporary price reductions for the sale of Del Monte's products to consumers, amounts paid to obtain favorable display positions in retailers' stores, and amounts paid to customers for shelf space in retail stores. Accruals for trade promotions are recorded primarily at the time of sale of product to the customer based on expected levels of performance. Settlement of these liabilities typically occurs in subsequent periods primarily through an authorized process for deductions taken by a customer from amounts otherwise due to Del Monte. As a result, 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 Del Monte's customers for amounts they determine are due to them. Final resolution of amounts appropriately deducted by customers may take extended periods of time.

Coupon Redemption: Del Monte offers coupons to consumers in the normal course of business. Coupon redemption costs are accrued in the period in which the coupons are offered, based on estimates of redemption rates that are developed by independent coupon redemption clearing-houses based on historical information. Should actual redemption rates vary from amounts estimated, adjustments to accruals may be required.

Retirement Benefits: Del Monte sponsors non- contributory defined benefit pension plans and unfunded defined benefit postretirement plans providing certain medical, dental and life insurance benefits to eligible retired, salaried, non-union hourly and union employees. Several statistical and other factors which attempt to anticipate future events are used in calculating the expense and liabilities related to these plans. These factors include assumptions about the discount rate, expected return on plan assets, the health care cost trend rate, withdrawal and mortality rates and the rate of increase in compensation levels. The actuarial assumptions used by Del Monte may differ materially from actual results due to changing market and economic conditions, higher or lower withdrawal rates or longer or shorter mortality of participants. These differences may impact the amount of retirement benefit expense recorded by Del Monte in future periods.

Retained-insurance Liabilities: Del Monte retains liabilities up to $0.25 million per claim under its loss sensitive worker's compensation, general and automobile insurance policy. An independent, third-party actuary estimates the outstanding retained-insurance liabilities by projecting incurred losses to their ultimate liability and subtracting amounts paid to- date to obtain the remaining liabilities. Actuarial estimates of ultimate liability are based on actual incurred losses, estimates of incurred but not yet reported losses based on historical information from both Del Monte and the industry, and the projected costs to resolve these losses. Retained-insurance liabilities may differ based on new events or circumstances that might materially impact the ultimate cost to settle these losses.

Intangible and Long-lived Assets: Intangible assets consist of trademarks and distribution rights. As a result of the adoption of SFAS 142 on July 1, 2001, intangible assets with indefinite useful lives are no longer amortized, but are instead tested for impairment at least annually, by comparing the carrying value with the estimated fair value of the intangible assets. Estimated fair value is determined using various valuation methods, including the relief from royalty method and the residual income method. In estimating discounted future cash flows, management uses historical financial information in addition to assumptions of sales trends and profitability, consistent with Del Monte's performance and industry trends. Estimates of fair value may differ if projected cash flows, market interest rates and discount factors change as a result of new events or circumstances.

Del Monte reviews long-lived assets held and used, intangible assets with finite useful lives and assets held for sale for impairment annually or whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. If an evaluation of recoverability is required, the estimated undiscounted future cash flows associated with the asset are compared to the asset's carrying amount to determine if an impairment charge is required. All long-lived assets, for which management has committed to a plan of disposal, are reported at the lower of carrying amount or fair value. Changes in projected cash flows generated by an asset, based on new events or circumstances, may indicate a change in fair value and require a new evaluation of recoverability of the asset.

On October 3, 2001, the Financial Accounting Standards Board issued FASB Statement No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" ("SFAS 144"). While SFAS 144 supersedes FASB Statement No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of", it retains many of the fundamental provisions of that Statement. SFAS 144 is effective for fiscal years beginning after December 15, 2001 and interim periods within those fiscal years. Del Monte believes that adoption of SFAS 144 will not have a material effect on Del Monte's consolidated financial statements.

Del Monte's primary cash requirements are to fund debt service, finance seasonal working capital needs and make capital expenditures. Internally generated funds and amounts available under its revolving credit facility are Del Monte's primary sources of liquidity.

Del Monte's quarterly operating results have varied in the past and are likely to vary in the future based upon a number of factors. Del Monte's historical net sales have exhibited seasonality, with net sales in the first fiscal quarter affected by lower levels of promotional activity, the availability of fresh produce and other factors. This situation impacts operating results as sales volumes, revenues and profitability decline during this period. Historically, the second and third fiscal quarters reflect increased sales of Del Monte's products, and related increased cost of products sold and selling and promotional expenses, during the holiday period extending from late November through December, as well as sales associated with the Easter holiday. Quarterly gross profit primarily reflects fluctuations in sales volumes and is also affected by the overall product mix.

The working capital position of Del Monte is seasonally affected by the growing cycle of the vegetables, fruit and tomatoes it processes. Substantially all inventories are produced during the harvesting and packing months of June through October and are depleted in the following seven months. Accordingly, working capital requirements fluctuate significantly. Del Monte owns virtually no agricultural land. Each year, Del Monte buys over one million tons of fresh vegetables, fruit and tomatoes under more than 2,500 contracts with individual growers and cooperatives located primarily in the United States.

Del Monte has noncancelable agreements with growers, with terms ranging from two to ten years, to purchase certain quantities of raw products. Total purchases under these agreements are estimated to be $51.6 million for fiscal 2002.

To finance working capital requirements, Del Monte relies on its revolving credit facility, which has a maximum availability of $325.0 million, subject to an asset-based borrowing base. As of March 31, 2002 and June 30, 2001, there was no outstanding balance under the revolving credit facility. Net availability under the revolving credit agreement, adjusted for borrowing base limitations and outstanding letters of credit, at March 31, 2002 totaled $293.0 million.

As of March 31, 2002, Del Monte's short-term borrowings and long-term debt primarily consisted of a revolving credit facility, a term loan and senior subordinated notes (collectively, the "Debt"). The Debt agreements contain various restrictive covenants, the most restrictive of which currently is the total debt ratio. Del Monte believes that it was in compliance with all such financial covenants at all testing intervals, and as of March 31, 2002.

Cash provided by operating activities for the nine months ended March 31, 2002 was $101.3 million. Cash used in operating activities for the nine months ended March 31, 2001 was $4.8 million. The increase in operating cash flows was due primarily to favorable working capital changes and higher sales volume. One of Del Monte's continuing objectives in fiscal 2002 is to reduce its debt levels. Del Monte has reduced debt by lowering inventory levels. Del Monte's inventories, as of March 31, 2002 were $61.4 million lower than the same time last year. Del Monte prepaid $65.0 million of its term loan during the third quarter of fiscal 2002 and an additional $35.0 million in April 2002. Management may decide to make additional term loan prepayments in the future.

Cash used in investing activities decreased $53.6 million to $24.3 million from $77.9 million for the nine months ended March 31, 2002 and 2001, respectively. The decrease was due primarily to the impact of the  SunFresh and S&W acquisitions in fiscal 2001 and lower capital expenditures of $1.7 million. See Note 2 to the consolidated financial statements for further information about these acquisitions.

Total capital expenditures incurred for the nine months ended March 31, 2002 and 2001 were $26.5 million and $28.2 million, respectively. Details of the types of capital expenditures, which include purchases of land, new and used equipment/fixtures, information technology equipment, installation labor, and capitalized software development costs, are as follows:

                                                           Nine Months Ended
                                                               March 31,
                                                        ----------------------
Types of Capital Expenditures:                             2002        2001
                                                        ----------  ----------
                                                              (IN MILLIONS)
Capability improvement program and information systems $     12.9  $      6.0
Equipment replacement and other improvements..........        6.9        14.9
Economic return and cost savings......................        5.5         4.0
Environmental compliance..............................        0.9         0.2
Plant consolidation...................................        0.3         3.1
                                                        ----------  ----------
Total capital expenditures............................ $     26.5  $     28.2
                                                        ==========  ==========

Capability improvement program and information systems - In June 2000, Del Monte began implementing a capability improvement program to upgrade information systems and business processes. The Enterprise Resource Planning system and Advanced Planning system are components of this seven-phase program, which is expected to continue over a three-year period, concluding in July 2003. In addition, purchases of information technology equipment, both related and unrelated to the capability improvement program, and other capitalized software are included under this type of capital expenditure.

Equipment replacement and other improvements - This type of capital expenditure includes normal replacement of equipment at the end of its economic life, and other improvements including purchases of land, furniture and fixtures.

Economic return and cost savings - This type of capital expenditure includes projects that realize economic benefit or cost savings by installing equipment that operates more efficiently. Projects that require purchases of equipment to expand capacity for new products or product line extensions are also included in this category of expenditure.

Environmental compliance - This type of capital expenditure includes projects that improve the impact of Del Monte's operations on the environment, consistent with Del Monte standards and regulatory compliance.

Plant consolidation - This type of expenditure is part of Del Monte's California cannery consolidation, whereby Del Monte expanded its operations in Hanford and Modesto to provide additional processing capacity to effect the closure of facilities located in San Jose, Stockton and Woodland.

In addition to capital expenditures, Del Monte enters into operating lease agreements to support its ongoing operations. The decision to lease, rather than purchase, an asset is the result of a number of considerations including the cost of funds, the useful life of the asset, technological obsolescence and re- marketing. Additionally, some equipment is proprietary to the lessor and cannot be purchased. All material asset financing decisions include an evaluation of the potential impact of the financing on Del Monte's Debt agreements, including applicable financial covenants. Rent expense, including contingent rent expense, was $38.3 million for the fiscal year ended June 30, 2001.

Cash used in financing activities for the nine months ended March 31, 2002 was $67.9 million. Cash provided by financing activities for the nine months ended March 31, 2001 was $86.5 million. The change was due primarily to the $65.0 million prepayment of the term loan during the third quarter of fiscal 2002 as well as no long-term borrowings in the current year. In addition, Del Monte has lower working capital requirements this year than the prior year, as explained above.

On September 19, 2001, Del Monte launched an exchange offer whereby the outstanding 91/4% Senior Subordinated Notes could be exchanged for Series B 91/4% Senior Subordinated Notes registered under the Securities Act of 1933. The exchange offer expired on October 18, 2001. All holders of the notes participated in the exchange and all of the 91/4% Senior Subordinated Notes were exchanged for Series B 91/4% Senior Subordinated Notes.

Del Monte entered into a ten-year agreement dated April 18, 1997 (the "Management Advisory Agreement") with TPG Partners, L.P. ("TPG"), a significant stockholder. Under the Management Advisory Agreement, TPG is entitled to receive an annual fee from Del Monte for management advisory services equal to the greater of $0.5 million or 0.05% of the budgeted consolidated net sales of Del Monte. For the three months ended March 31, 2002 and 2001, TPG received fees of $0.2 million in each period under this agreement. For the nine months ended March 31, 2002 and 2001, TPG received fees of $0.5 million and $0.6 million, respectively, under this agreement. This agreement makes available the resources of TPG concerning a variety of financial and operational matters, including advice and assistance in reviewing Del Monte's business plans and its results of operations and in evaluating possible strategic acquisitions, as well as providing investment banking services in identifying and arranging sources of financing. The Management Advisory Agreement does not specify a minimum number of TPG personnel who must provide such services or the individuals who must provide them. It also does not require that a minimum amount of time be spent by such personnel on Del Monte's matters. Del Monte cannot otherwise obtain the services that TPG will provide without the addition of personnel or the engagement of outside professional advisors.

Del Monte also entered into a ten-year agreement dated April 18, 1997 (the "Transaction Advisory Agreement") with TPG. As compensation for financial advisory and other similar services rendered in connection with "add- on" transactions (such as an acquisition, merger or recapitalization; collectively, "Add-on Transactions"), TPG is to be paid a fee of 1.5% of the total value for each Add-on Transaction. For the nine months ended March 31, 2002 and fiscal 2001, TPG did not receive any payments under the Transaction Advisory Agreement.

ITEM 3. Quantitative and Qualitative Disclosures about Market Risk

Reference is made to the discussion of Del Monte Foods Company's Financial Instruments and Risk Management Policies and Factors that May Affect Future Results in "Quantitative and Qualitative Disclosures about Market Risks" in Del Monte's Annual Report on Form 10-K for the year ended June 30, 2001 (the "Annual Report"). As stated in the Annual Report, Del Monte's business is highly competitive and Del Monte cannot predict the pricing or promotional activities of its competitors. In addition, Del Monte expects to continue to face aggressive trade and consumer promotion spending in the single-serve fruit category which will tend to reduce the overall profitability of the category.

Del Monte's primary market risk exposure is that of interest rate risk. Del Monte's interest expense in regard to its revolving and term loan agreement is calculated using a reference interest rate plus a credit margin. Therefore, given a fixed debt level and a fixed credit margin, interest expense increases or decreases in relation to market interest rates. Historically, to reduce its exposure to higher interest rates, Del Monte has entered into interest rate protection agreements to limit the impact of rate increases on future income. Del Monte uses derivatives only for purposes of managing risk associated with the underlying exposures. Del Monte does not trade or use instruments with the objective of earning financial gains on interest rate fluctuations alone, nor does it use instruments where there are not underlying exposures. Complex instruments involving leverage or multipliers are not used. Management believes that its use of interest rate protection agreements to manage risk is in Del Monte's best interest and that any resulting market risk exposure would not materially effect Del Monte's operating results.

The terms of Del Monte's revolving and term loan agreement required Del Monte to enter into and maintain one or more permitted swap obligations (as defined in the loan agreement) for, among other things, a notional amount of at least $200.0 million and for a term of at least three years. To accomplish this, and to limit its exposure to interest rate increases, Del Monte entered into interest rate swaps on August 3, 2001. The aggregate notional amount of the swaps is $200.0 million and the swaps are in effect from September 28, 2001 through September 30, 2004. The swaps are with several banks and fix the three-month LIBOR at a weighted average of 4.91% per annum on the $200.0 million notional amount. This fixed interest rate is measured against three-month LIBOR for purposes of settlement. The fair value of each swap is determined independently by each bank, using its own valuation model, based on the projected three-month LIBOR yield curve. According to each bank, valuations based on other models may yield different results.

The swaps were not initially designated as hedging instruments under SFAS 133 "Accounting for Derivative Instruments and Hedging Activities" (as amended by SFAS 137 and 138) when they were entered into on August 3, 2001. Changes in fair value of the swaps from that date to their designation date as hedging instruments are reflected in the Consolidated Statements of Income for the three and nine months ended March 31, 2002. The fair value of the swaps at January 23, 2002 was a liability of $5.8 million. This liability will be credited to interest expense, in the Consolidated Statements of Income, over the remaining life of the swap agreements. This credit offsets amounts to be paid to the banks under the swap agreements. On January 23, 2002, Del Monte designated the swaps as cash flow hedging instruments of market rate interest risk under SFAS 133. The changes in the fair value of the swaps subsequent to the January 23, 2002 designation date are recorded in other comprehensive income in Stockholders' Equity in an amount equal to the effective portion (determined in accordance with SFAS 133) of the hedging instruments. The remaining amount, if any, equal to the ineffective portion (determined in accordance with SFAS 133) of the hedging instruments is recorded as other income in the Consolidated Statements of Income.

The fair value of the swaps at December 31, 2001, January 23, 2002 and March 31, 2002 was a liability of $4.5 million, $5.8 million and $2.7 million, respectively. For the three and nine months ended March 31, 2002, the change in fair value of the swaps through January 23, 2002, resulted in a loss on financial instruments of $1.3 million ($0.8 million net of tax) and $5.8 million ($3.5 million net of tax), respectively. For the three and nine months ended March 31, 2002, the change in fair value of the swaps from January 23, 2002 to March 31, 2002 resulted in other comprehensive income of $1.5 million ($0.9 million net of tax) for both periods. The ineffective portion of the hedging instruments resulted in a gain of $0.2 million which is recorded in other income. Interest expense for the three and nine months ended March 31, 2002 was increased by $1.5 million and $2.7 million, respectively, due to the impact of the swaps. Interest expense for both the three and nine months ended March 31, 2002 includes a credit to interest expense of $1.4 million, reflecting a release to earnings from the $5.8 million liability, attributed to the January 23, 2002 to March 31, 2002 period. An additional credit to interest expense of $1.5 million is expected for the fourth quarter of this fiscal year. A total of $3.4 million of additional credits to interest expense are expected for fiscal 2003. Settlements accrued for payment to the swap counterparties offset these releases to earnings from this liability.

This quarterly report contains forward-looking statements, including those in the sections captioned "Financial Statements" and "Management's Discussion and Analysis of Financial Condition and Results of Operations". Statements that are not historical facts, including statements about Del Monte's beliefs or expectations, are forward-looking statements. These statements are based on plans, estimates and projections at the time Del Monte makes the statements, and you should not place undue reliance on them. Del Monte does not undertake to update any of these statements in light of new information or future events.

Forward-looking statements involve inherent risks and uncertainties and Del Monte cautions you that a number of important factors could cause actual results to differ materially from those contained in any such forward-looking statement. These factors include, among others: general economic and business conditions; weather conditions; energy costs and availability; crop yields; competition, including pricing and promotional spending levels by competitors; raw material costs and availability; high leverage; loss of significant customers or a substantial reduction in orders from these customers; market acceptance of new products; successful integration of acquired businesses; successful implementation of the capability improvement program; consolidation of processing plants; changes in business strategy or development plans; availability, terms and deployment of capital; ability to increase prices; changes in, or the failure or inability to comply with, governmental regulations, including, without limitation, environmental regulations; industry trends, including changes in buying and inventory practices by customers; production capacity constraints and other factors referenced in this quarterly report.

Please see the Annual Report for a more detailed discussion of important factors that could materially affect future results.

ITEM 1. Legal Proceedings.

Del Monte is involved from time to time in various legal proceedings incidental to its business, including claims with respect to product liability, worker's compensation and other employee claims, tort and other general liability, for which Del Monte carries insurance or is self-insured, as well as trademark, copyright and related litigation. While it is not feasible to predict or determine the ultimate outcome of these matters, Del Monte believes that none of these legal proceedings will have a material adverse effect on Del Monte's financial position.

ITEM 2. Changes in Securities And Use of Proceeds. None.

ITEM 3. Defaults Upon Senior Securities. None.

ITEM 4. Submission of Matters to a Vote of Security Holders. None.

ITEM 5. Other Information. None.

(a) Exhibits. None.

(b) Reports on Form 8-K

      Del Monte did not file any reports on Form 8-K during the quarter ended March 31, 2002.

SIGNATURES

Pursuant to the requirements 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.

	DEL MONTE FOODS COMPANY

	(Registrant)

Dated: May 15, 2002

	By:	/s/ RICHARD G. WOLFORD

	Richard G. Wolford
	President and Chief Executive Officer, Director and Chairman of the Board
	(Principal Executive Officer)

	By:	/s/ DAVID L. MEYERS

	David L. Meyers
	Executive Vice President, Administration and Chief Financial Officer
	(Principal Financial and Accounting Officer)