2009 Annual Report One Hundred Years —— And Counting For more than 100 years, Del Monte Foods has been creating great products for American families. Our focus on that goal has never wavered, but our company has evolved considerably, particularly in the last several years. We have broadened our portfolio substantially: Del Monte Foods today offers a wide variety of fruit, vegetable and tomato products, a line of broths, and a comprehensive selection of pet foods and snacks. We have worked to build our brands, leveraging their strength to fuel our growth and to help us introduce new products successfully. We have venerable brands — the Del Monte brand dates back to the late 1800s, and Milk-Bone recently celebrated its 100th birthday — and we are constantly working to ensure that our brands address the needs of today’s consumers. Del Monte Foods continues to evolve as we strive to stay in sync with the needs of American families — people as well as their pets. We provide healthy, delicious products that are easy to use and enjoy, at home or on the go. We provide great-tasting and nutritious pet foods and snacks that strengthen the special relationship between pets and people. Our evolution has helped us become more competitive in order to deliver on our fundamental mission for investors: to drive stockholder value. History is an asset, and the evolution of Del Monte Foods continues. We are looking forward to the journey ahead. today yesterday “Why do I buy Del Monte? Because I trust the brand. And because I appreciate the value.” The Del Monte brand unites a family of great products, which includes a wide variety of canned fruits, vegetables, and tomatoes as well as a growing line of extended shelf-life fruit products sold in the chilled produce section. Our brand stands for quality, nutrition, convenience, and value. “To me, my dog Scout is an important member of my family —— and I’m as choosy about what I buy for him as I am about what I buy for my kids.” Anyone with a dog or a cat knows that pets are an integral part of the family, treated with care and devotion. Pet foods and snacks have become a substantial part of our business at Del Monte Foods over the past several years, and we have assembled a portfolio of strong brands including Milk-Bone dog biscuits, Pup-Peroni dog snacks, and Meow Mix and 9Lives cat foods. Our pet brands have always stood for quality and nutrition; in today’s home, they also foster the emotional connection between people and their pets. We have brands that people trust —— and brand strength and relevance are driving our business in the right direction. We grow because we know how to innovate. We know how to translate changing consumer needs into ideas, how to transform ideas into products people want, and how to get new innovations onto retailers’ shelves and into consumers’ grocery bags. Nourishing Families. Enriching Lives. Every Day. The family meal. Ultimately, this is what Del Monte Foods is all about: helping the American family eat deliciously, eat healthy, and eat together. Our products make it simple to prepare high-quality and nutritious meals. We make it easy for people to get good nutrition at work, at school or on the go with products like Del Monte Fruit Naturals snacks. And we enable people to feed and indulge their pets with a broad range of pet foods and snacks. Nourishing Families. Enriching Lives. Every Day. That’s what we do at Del Monte Foods. Del Monte Foods Annual Report 2009 Letter to Stockholders Dear Fellow Stockholders: In fiscal 2009, we made great progress as we work towards our ongoing objective to ensure Del Monte Foods performs as a top-tier branded consumer packaged foods company. Our excellent financial results are consistent with that progress. Through a series of actions implemented over several years, we have created a portfolio of powerful brands and products that meet consumer needs and succeed in the marketplace. We have also invested to improve our competitiveness across all functions of our company. In fiscal2009 , building on these achievements, we deployed a multi-year growth strategy, our Accelerated Growth Plan (AGP), designed to improve our financial performance at both the topline and the bottom line and to drive stockholder value. During fiscal 2009, we successfully executed All of these efforts fueled our success in fiscal against each of the AGP’s three main strategic 2009, delivering growth, improved competitiveness, initiatives. First, we took pricing actions and and better financial results. Importantly, we believe improved productivity to offset cost increases our strategy and structure will drive even stronger and maintain margins. Second, we worked performance going forward, which increases our hard to unleash the potential of our most important confidence in our ability to deliver on our most brands and products by substantially increasing fundamental mission: enhancing stockholder value. our marketing investments. Finally, we accelerated We believe Del Monte Foods is very well positioned our growth — and growth potential — through for profitable growth. new products and growth engines. To support this consumer-centric strategy, we made important organizational changes to improve our ability to achieve our goals. We also made a significant strategic move to further optimize our portfolio by divesting our StarKist seafood business; eliminating the volatile cost structure associated with the tuna business significantly improved the margin profile of our portfolio. Fiscal 2009 Results: To combat these margin pressures, we focused Growth & Profitability on pricing and productivity, the first major component of our Accelerated Growth Plan. We Del Monte Foods turned in very strong financial took several pricing actions across the consumer results for fiscal 2009. Our topline growth and pet product lines during the year to address was excellent: Net sales of $3.6 billion marked increased costs. These moves were largely enabled a substantial 14% increase over the $3.2 billion by the strength of the branded portfolio we have reported in fiscal 2008. Significantly, net sales built. We also continued our commitment to take grew in both of our segments: Consumer Products costs out of our operations and to address rising net sales increased by 11.7% while Pet Products costs as we redoubled our ongoing productivity net sales rose by 16.9%. Given the relatively initiatives to make Del Monte Foods leaner and weak state of the U.S. economy throughout much more efficient. These efforts generated savings of fiscal 2009, this strong topline growth is a of approximately $55 million during fiscal 2009, testament to the quality of our products, which $20 million greater than our original target. Our do a very good job at meeting consumer needs, Transformation Plan, completed in fiscal 2008, and the strength of the equities in our branded generated an additional $15 million in savings in portfolio, which effectively connect our products fiscal 2009 for a total of $50 million in run-rate with consumers and drive the business of our savings. This combined $70 million cost reduction retailer customers. Today, our strong branded was an important contributor to operating portfolio is well-balanced and includes consumer profit in fiscal 2009. Importantly, the investments products, which account for about 55% of net we have made in systems and infrastructure sales and about 45% of operating profit, and pet should translate into improved competitiveness products, which represent approximately 45% in the future. of net sales and 55% of operating profit. Fiscal 2009 was another year of strong cash Another extremely important fiscal 2009 flow for Del Monte Foods, which generated $167 milestone was our progress with regard to margins million in adjusted cash flow ($200 million net and overall profitability. Income from continuing cash provided by operating activities plus $277 operations for the year totaled $147.7 million million net cash provided by investing activities, ($0.74 per share), a substantial increase over the less $310 million to adjust for the impact of the $117.7 million ($0.58 per share, which included StarKist divestiture on the statement of cash flows). $0.08 of transformation expense) reported in fiscal We made a strategic decision early in fiscal 2009 2008. This was especially impressive in light of to prioritize two uses of cash: continuing to pay our the dramatic increase in our marketing investments quarterly dividend to stockholders — a total of (discussed in more detail below). Significantly, $32 million in fiscal 2009 — and further reducing we were able to maintain margins in fiscal 2009 leverage, an ongoing strategic commitment for despite this increased marketing investment Del Monte Foods. and a continuation of the cost pressures — in raw products and commodities — that have eroded margins in recent years. Our focus on debt reduction has been consistent. After successfully realigning our portfolio, we This became particularly important during fiscal have been focused on leveraging the branded 2009 as we acted to significantly reduce leverage. strength of the portfolio and unlocking the We reduced debt, net of cash, by more than $400 potential of our strong brand equities as we work million during the year using a combination of to gain market share and launch new products. cash flow as well as proceeds from the sale of our To support this objective in fiscal 2009, we StarKist seafood business. At year-end, our increased our marketing investment by nearly leverage was reduced to the low end of our fiscal 50%, which results in a total of approximately 2009 target. $140 million invested in our brands, including Del Monte, Milk-Bone, 9Lives, and Pup-Peroni Notably, we delivered these solid financial among several others.