Dean Foods Company Annual Report 2010

FY2010 Annual Report · Dean Foods Company
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2010 Annual Report

A Letter from our Chairman and Chief Executive Ofﬁ cer

Dear Fellow Shareholders:

In 2010, we experienced the most difﬁ cult year in Dean Foods history. While we have remained a 

proﬁ table company, the ﬁ nancial pressures that began impacting our core dairy business in late 

2009 continued throughout the year and into 2011. Margins on private label milk declined signiﬁ cantly. 

The entire industry experienced volume softness across dairy categories. 

Our consolidated results reﬂ ect the challenges 

this intensiﬁ ed pressure on processors to lower 

facing our industry and Fresh Dairy Direct-

wholesale prices. Competitors facing volume losses 

Morningstar. Consolidated adjusted operating 

bid aggressively for available business, and this 

income for the year was $472 million, down more 

competitive intensity created broad-based price 

than 30 percent from last year.* Adjusted diluted 

concessions across the processing community. 

earnings per share were $0.80, down from $1.59 in 

Deeply discounted retail prices also widened the 

2009.* In contrast, WhiteWave-Alpro performed 

gaps between our more proﬁ table regional brands 

exceptionally well, resulting in the strongest year 

and private label offerings. Although the year-

ever for our value-added brands. However, its 

over-year impact has lessened recently, consumers 

impact on the overall enterprise’s performance 

looking for value have continued to trade down 

was limited by its relative size. 

to private label options, and our product mix has 

We remain a strong company. Most importantly, 

we continue to make progress in transforming 

Fresh Dairy Direct-Morningstar into the lowest-cost 

processor in our industry while maintaining focus on 

growth in WhiteWave-Alpro. 

THE CHALLENGES OF A CHANGING MARKET

To understand our results, you have to understand 

the environment that created them. Retailers, 

looking to attract shoppers and drive sales 

growth in a tough economy, continued to price 

private label milk at deep discounts. The margin 

between the retail pricing of private label gallons 

of milk and the government-mandated minimum 

price for raw milk dropped 40 to 50 cents a 

gallon below historical levels in 2009 and has 

remained depressed. As private label retailers 

looked to reduce their costs across the category, 

*For a reconciliation of the adjusted ﬁ nancial results contained 
 herein, see the “Additional Information” at the end of this report.

deteriorated as a result. In addition to these ongoing 

price pressures, volume weakness across core dairy 

categories increased throughout the year. These 

dynamics are not only challenging, but enduring. 

We have seen a fundamental reset of consumer 

value expectations — we believe this is the new 

normal. That means our business must learn to 

succeed regardless of market conditions and to 

thrive in a climate of adversity.

A TRANSFORMATION MINDSET

The future for Dean Foods is about doing more 

with less. Fewer but more efﬁ cient facilities, fewer 

trucks, and fewer people, resulting in signiﬁ cantly 

lower cost-per-unit of product produced. At 

the same time, we recognize that we have two 

business segments in vastly different positions in 

the marketplace and in their respective life cycles. 

A Letter from our Chairman and Chief Executive Ofﬁ cer

DEAN FOODS 2010 RESULTS

Operating
Income*

Net Sales

Earnings 
Per Share*

$504

million

$10.2

billion

N/A

$175

million

$1.9

billion

N/A

* Refers to adjusted results for the twelve months ended December 31, 2010

CONSOLIDATED
RESULTS

$472

million

$12.1

billion

$0.80

These differences create a need for management, 

announced in 2010, which we expect will create at 

marketing and capital investment planning tailored 

least $30 million in annualized savings by the end 

to each segment. WhiteWave-Alpro will continue 

of 2011. We are also targeting reductions in milk 

to focus on driving growth and innovation into 

procurement costs. And, we expect to continue 

new plant-based beverage platforms. Within 

to drive substantial costs out of our system by 

Fresh Dairy Direct-Morningstar, we will accelerate 

optimizing our manufacturing network. 

cost reduction efforts to create a fundamentally 

changed cost structure.

In addition to reducing cost, we believe we can 

achieve substantial beneﬁ ts by enhancing the 

In 2009, we launched an ambitious plan to 

way we approach the marketplace. In 2010, we 

permanently reduce our system-wide structural 

began to more closely align our sales organization, 

costs by $300 million. We achieved $75 million 

commercial lines of business and customer 

in cost savings in 2009 and an additional 

relationships across categories in Fresh Dairy 

$100 million in 2010. We reduced stafﬁ ng in 

Direct-Morningstar — an approach that we believe 

Fresh Dairy Direct-Morningstar by nearly 1,400 

will make us more nimble and enhance our go-

positions in 2010. Since the beginning of 2009, 

to-market strategy. We have focused the entire 

better technology and logistics have enabled the 

enterprise on fewer, bigger initiatives that can 

reduction of nearly 500 delivery routes. Over the 

extend our low-cost position in a meaningful way.

same period, fuel usage is also down in connection 

with our network optimization efforts. We have 

also closed six facilities during that time. Improved 

aggregated purchasing has produced more than 

$28 million in annual procurement savings. And, 

consistent with our strategy of exiting non-core 

categories, we have divested all of our U.K.- and 

a substantial portion of our U.S.-based yogurt 

business. We are already on a path to achieve our 

$300 million cost savings target by the end of 

2011 — the third year of our original three-to-ﬁ ve 

year plan. But we must accelerate beyond that 

level to get ahead of the margin squeeze and 

begin improving our proﬁ tability. 

A SOLID FINANCIAL FOUNDATION

In spite of the challenges we faced in recent years, 

we remain ﬁ nancially sound. In 2010, we generated 

$526 million in net cash from continuing operations 

and $224 million of free cash ﬂ ow.* To support the 

generation of free cash ﬂ ow and the reduction 

of debt, we continue to aggressively manage 

working capital as evidenced by our improving 

cash conversion cycle. Total outstanding net debt 

at year end stood at just under $4 billion, down 

approximately $208 million on a full-year basis. 

In 2010, we amended our credit agreements to 

allow for additional ﬂ exibility under our ﬁ nancial 

covenants. In addition, late in 2010, we reduced 

Going forward, we are expanding our cost 

some of our shorter-tenored bank debt by issuing 

reduction efforts in additional areas, such as 

$400 million of eight-year senior unsecured 

the General and Administrative cost initiative 

notes. This new debt structure better aligns our 

A Letter from our Chairman and Chief Executive Ofﬁ cer

debt maturity proﬁ le with the expected returns 

LOOKING FORWARD

on some of our longer-term capital projects. We 

Strong headwinds remain in 2011. The market has 

continue to maintain strong liquidity, and we will 

shown some early signs of stabilization, although 

continue to balance our capital spending plans 

it is doing so at the expense of proﬁ tability. 

for 2011 with our need to maintain appropriate 

Heavy promotional behavior on the part of 

ﬂ exibility and borrowing capacity. 

retailers has abated somewhat, and our branded 

WHITEWAVE-ALPRO — A GROWTH ENGINE
WHITEWAVE-ALPRO — A GROWTH ENGINE

WhiteWave-Alpro produces and sells an array
WhiteWave-Alpro produces and sells an array 

of branded dairy, soy and plant-based beverages
of branded dairy, soy and plant-based beverages 

and foods including Silk® soymilk, almondmilk
and foods including Silk® soymilk, almondmilk 

and coconutmilk, Horizon Organic® milk and dairy 
and coconutmilk, Horizon Organic® milk and dairy 

products, International Delight® coffee creamers, and
products, International Delight® coffee creamers, and 

LAND O LAKES® creamers. In Europe, the Alpro®
LAND O LAKES® creamers. In Europe, the Alpro® 

product line includes a wide range of beverage, 
product line includes a wide range of beverage, 

dessert, yogurt, cream, margarine, and meat
dessert, yogurt, cream, margarine, and meat 

alternative products. 
alternative products. 

conventional milk products are returning to value 

in some areas. Private label wholesale prices 

have not yet begun to increase, although the 

declines have appeared to stop. Overall volumes 

in the industry remain soft. The industry we see 

today differs signiﬁ cantly in proﬁ t levels and 

pricing from prior years. 

In 2011, the business environment will continue 

to be difﬁ cult, but we know what is necessary 

to succeed. We have the right team and the 

right strategies. We will become the lowest-cost 

We started bringing the pieces of this business 
We started bringing the pieces of this business 

processor of conventional dairy products. We 

together in 2004 and have turned three 
together in 2004 and have turned three 

will remain the leading innovator in plant-based 

subscale niche businesses into a $2 billion brand 
subscale niche businesses into a $2 billion brand 

foods and beverages. We will complete our 

powerhouse. Net sales over the past ﬁ ve years
powerhouse. Net sales over the past ﬁ ve years 

transformation.

Thank you for your conﬁ dence and support, 

have increased from $1.1 billion to nearly $2 billion,
have increased from $1.1 billion to nearly $2 billion, 

and operating income has increased by nearly 
and operating income has increased by nearly 

$70 million, or 64 percent. For the full year 2010,
$70 million, or 64 percent. For the full year 2010, 

WhiteWave-Alpro adjusted operating income 
WhiteWave-Alpro adjusted operating income 

increased 23 percent to $175 million from $143
increased 23 percent to $175 million from $143 

million in 2009.
million in 2009.

We believe WhiteWave-Alpro is a best-in-class
We believe WhiteWave-Alpro is a best-in-class 

consumer packaged goods business operating 
consumer packaged goods business operating 

in growing categories with unique, on-trend 
in growing categories with unique, on-trend 

attributes. It is performing exceptionally well, and
attributes. It is performing exceptionally well, and 

we expect strong top and bottom line growth
we expect strong top and bottom line growth 

that will add to our overall earnings recovery
that will add to our overall earnings recovery 

story. We could not be more conﬁ dent or excited 
story. We could not be more conﬁ dent or excited 

about its future.
about its future.

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-K

(Mark One)
Í ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT

OF 1934
For The Fiscal Year Ended December 31, 2010

OR
‘ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934
For the Transition Period from

to

Commission File Number 001-12755

Dean Foods Company

(Exact name of Registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization)

75-2559681
(I.R.S. Employer
Identification No.)

2711 North Haskell Avenue Suite 3400
Dallas, Texas 75204
(214) 303-3400
(Address, including zip code, and telephone number, including
area code, of Registrant’s principal executive offices)
Securities Registered Pursuant to Section 12(b) of the Act:

Title of Each Class

Common Stock, $.01par value

Name of Each Exchange on Which Registered

New York Stock Exchange

Securities Registered Pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned-issuer, as defined in Rule 405 of the Securities Act. Yes Í No ‘
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ‘ No Í
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 Í No ‘

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months
(or for such shorter period that the registrant was required to submit and post such files). Yes Í No ‘

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K ‘

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
(Check one):
Large accelerated filer Í

Smaller reporting company ‘

Accelerated filer ‘

Non-accelerated filer ‘
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ‘ No Í
The aggregate market value of the registrant’s voting and non-voting common stock held by non-affiliates of the registrant at June 30, 2010,
based on the $10.07 per share closing price for the registrant’s common stock on the New York Stock Exchange on June 30, 2010, was
approximately $1.79 billion.

The number of shares of the registrant’s common stock outstanding as of February 18, 2011, was 183,130,138.

Portions of the registrant’s definitive Proxy Statement for its Annual Meeting of Stockholders to be held on or about May 19, 2011, which

will be held within 120 days of the registrants fiscal year end, are incorporated by reference into Part III of this Form 10-K.

DOCUMENTS INCORPORATED BY REFERENCE

Item

TABLE OF CONTENTS

PART I

1

Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Our Reportable Segments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current Business Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Developments Since January 1, 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Government Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Minority Holdings and Other Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Where You Can Get More Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1A Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1B Unresolved Staff Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2
Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3

PART II

5 Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of

Equity Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6
Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7 Management’s Discussion and Analysis of Financial Condition and Results of Operations . . . . . . . . .
Business Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Our Reportable Segments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Results of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Liquidity and Capital Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Known Trends and Uncertainties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Critical Accounting Estimates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Recent Accounting Pronouncements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7A Quantitative and Qualitative Disclosures About Market Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8
9
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure . . . . . . . .
9A Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9B Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

PART III

10 Directors, Executive Officers and Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11 Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
12

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13 Certain Relationships and Related Transactions, and Director Independence . . . . . . . . . . . . . . . . . . . .
Principal Accountant Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14

PART IV

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15 Exhibits and Financial Statement Schedules
Signatures

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

59
S-1

Forward-Looking Statements

This Annual Report on Form 10-K (the “Form 10-K”) contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995, which are subject to risks, uncertainties and
assumptions that are difficult to predict. Forward-looking statements are predictions based on expectations and
projections about future events, and are not statements of historical fact. Forward-looking statements include
statements concerning business strategy, among other things, including anticipated trends and developments in
and management plans for our business and the markets in which we operate. In some cases, you can identify
these statements by forward-looking words, such as “estimate,” “expect,” “anticipate,” “project,” “plan,”
“intend,” “believe,” “forecast,” “foresee,” “likely,” “may,” “should,” “goal,” “target,” “might,” “will,” “could,”
“predict,” and “continue,” the negative or plural of these words and other comparable terminology. All forward-
looking statements included in this Form 10-K were based upon information available to us as of the filing date
of this Form 10-K, and we undertake no obligation to update any of these forward-looking statements for any
reason. You should not place undue reliance on forward-looking statements. The forward-looking statements
involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of
activity, performance, or achievements to differ materially from those expressed or implied by these statements.
These factors include the matters discussed in the section entitled “Part I — Item 1A — Risk Factors” in this
Form 10-K, and elsewhere in this Form 10-K. You should carefully consider the risks and uncertainties described
under these sections.

PART I

Item 1. Business

We are one of the leading food and beverage companies in the United States, as well as a global leader in
branded plant-based beverages, such as soy, almond, and coconut milks, and other soy-based food products. As
we continue to evaluate and seek to maximize the value of our strong brands and product offerings, we have
aligned our leadership teams, operating strategies and supply chain initiatives around our two business segments:
Fresh Dairy Direct-Morningstar and WhiteWave-Alpro. Fresh Dairy Direct-Morningstar is the largest processor
and distributor of milk and other dairy products in the United States, with products sold under more than 50
familiar local and regional brands and a wide array of private labels. WhiteWave-Alpro markets and sells a
variety of nationally branded dairy and dairy-related products, such as Horizon Organic® milk and other dairy
products, The Organic Cow® organic dairy products, as well as other plant-based beverages and soy food
products, International Delight® coffee creamers and LAND O LAKES® creamers and fluid dairy products, and
Silk® plant-based beverages, such as soy, almond and coconut milks, and cultured soy products. WhiteWave-
Alpro also offers branded soy-based beverages and food products in Europe and markets its products under the
Alpro® and Provamel® brands. Additionally, with our Hero/WhiteWave joint venture we have expanded the
WhiteWave product footprint beyond the dairy case to capitalize on the chilled fruit-based beverage opportunity
with the introduction of Fruit2Day.

Our principal executive offices are located at 2711 North Haskell Avenue, Suite 3400, Dallas, Texas 75204.
Our telephone number is (214) 303-3400. We maintain a worldwide web site at www.deanfoods.com. We were
incorporated in Delaware in 1994.

Our Reportable Segments

We have two reportable segments, Fresh Dairy Direct-Morningstar and WhiteWave-Alpro.

In the first quarter of 2010, our Chief Executive Officer, who is our chief operating decision maker, changed
the way he evaluates the performance of our operations, develops strategy and allocates capital resources. As a
result, beginning in the first quarter of 2010, our Morningstar operations were aligned with our Fresh Dairy

1

Direct operations so that our two reporting segments consisted of Fresh Dairy Direct-Morningstar and
WhiteWave-Alpro. This change reflects the divergence between the strategies and objectives of these two
segments. Our value-added branded operations at WhiteWave-Alpro added scale with the acquisition of Alpro in
July 2009 and are focused on driving growth through effective marketing and innovation. Our traditional dairy
operations at Fresh Dairy Direct-Morningstar are driven by a focus on cost and service leadership. We believe
these revised segments have increased internal focus and offered management and investors improved visibility
into the performance of the segments against their specific objectives. All segment results set forth herein have
been recast to present results on a comparable basis. These changes had no impact on consolidated net sales or
operating income.

During the second quarter of 2010, we committed to a plan to sell the business operations of our Rachel’s
Dairy companies (“Rachel’s”), which provide organic branded dairy-based chilled yogurt, milk and related dairy
products primarily in the United Kingdom. The sale of these operations was completed on August 4, 2010. The
decision to sell these operations was part of our strategic growth plan and allows us to target our investments in
growing our core dairy and branded businesses by divesting non-core businesses. All of our Rachel’s operations,
previously reported within the WhiteWave-Alpro segment, have been reclassified as discontinued operations. See
Note 2 to our Consolidated Financial Statements. Unless stated otherwise, any reference to income statement
items in this Annual Report on Form 10-K refers to results from continuing operations.

In the fourth quarter of 2010, we entered into two separate agreements to sell our Mountain High and private
label yogurt operations, which are part of our Fresh Dairy Direct-Morningstar segment. We expect to recognize a
gain related to the sale of both of these operations. On February 1, 2011, we completed the sale of our Mountain
High yogurt operations. We expect our private label operations sale to close in the first half of 2011. These
operations did not meet the requirements to be accounted for as discontinued operations.

Fresh Dairy Direct-Morningstar

Fresh Dairy Direct-Morningstar manufactures, markets and distributes a wide variety of branded and private
label dairy case products, including milk, creamers, ice cream, cultured dairy products, juices and teas to
retailers, distributors, foodservice outlets, educational institutions and governmental entities across the United
States. Fresh Dairy Direct-Morningstar is also one of the leading U.S. manufacturers of private label cultured and
extended shelf life dairy products such as ice cream mix, sour and whipped cream, yogurt and cottage cheese.

Fresh Dairy Direct-Morningstar’s net sales totaled $10.2 billion in 2010, or approximately 84% of our
consolidated net sales. The following charts graphically depict Fresh Dairy Direct-Morningstar’s 2010 net sales
by product and customer and the volume mix of company branded versus private label products.

2

Products

Customers

Brand Mix

Fresh Cream (5)
3%

Other beverages (4)
4%

Cultured (3)
7%

Other (6)
1%

ESL & ESL
creamers (2)
9%

Ice cream (1)
13%

Fresh Milk
63%

Government/
Schools
6%

Other
4%

Distributor
6%

Food
Service (7)
19%

Convenience stores
5%

Retailers
60%

Private label
brands
56%

Company brands
44%

(1)
(2)
(3)
(4)
(5)
(6)
(7)

Includes ice cream, ice cream mix and ice cream novelties.
Includes creamers and other extended shelf life (“ESL”) fluids.
Includes yogurt, cottage cheese, sour cream and dairy-based dips.
Includes fruit juice, fruit-flavored drinks, iced tea and water.
Includes half-and-half and whipping cream.
Includes items for resale such as butter, cheese, eggs and milk shakes.
Includes restaurants, hotels and other foodservice outlets.

Fresh Dairy Direct-Morningstar sells the majority of its products under local and regional proprietary or
licensed brands. Products not sold under these brands are sold as private label. Fresh Dairy Direct-Morningstar
sells its products primarily on a local or regional basis through its local and regional sales forces, although some
national customer relationships are coordinated by a centralized corporate sales department. Fresh Dairy Direct-
Morningstar’s largest customer is Wal-Mart, which includes its subsidiaries such as Sam’s Club, and accounted
for approximately 19% of Fresh Dairy Direct-Morningstar’s net sales in 2010.

3

As of December 31, 2010, Fresh Dairy Direct-Morningstar’s local and regional proprietary and licensed

brands included the following:

Alta Dena®
Arctic Splash®
Atlanta Dairies®
Barbers®
Barbe’s®
Berkeley Farms®
Broughton™
Borden® (licensed brand)
Brown Cow®
Brown’s Dairy®
Bud’s Ice Cream™
Chug®
Country Charm®
Country Churn®
Country Delite™
Country Fresh®
Country Love®
Creamland™
Dairy Fresh®
Dean’s®
Dipzz®
Fieldcrest®
Foremost® (licensed brand)

Friendship™
Gandy’s™
Garelick Farms®
Hershey’s® (licensed brand)
Hygeia®
Jilbert™
Knudsen® (licensed brand)
LAND O LAKES® (licensed brand)
Land-O-Sun & design®
Lehigh Valley Dairy Farms®
Liberty™
Louis Trauth Dairy Inc.®
Maplehurst®
Mayfield®
McArthur®
Meadow Brook®
Meadow Gold®
Mile High Ice Cream™
Model Dairy®
Mountain High®
Nature’s Pride®
Nurture®
Nutty Buddy®

Oak Farms®
Over the Moon®
Pet® (licensed brand)
Pog® (licensed brand)
Price’s™
Purity™
Reiter™
Robinson™
Saunders™
Schenkel’s All*Star™
Schepps®
Shenandoah’s Pride®
Stroh’s®
Swiss Dairy™
Swiss Premium™
Trumoo®
T.G. Lee®
Tuscan®
Turtle Tracks®
Verifine®
Viva®

Fresh Dairy Direct-Morningstar currently operates 95 manufacturing facilities in 35 states located based on
customer needs and other market factors. For more information about facilities in Fresh Dairy Direct-
Morningstar, see “Item 2. Properties.” Due to the perishable nature of its products, Fresh Dairy Direct-
Morningstar delivers the majority of its products directly to its customers’ locations in refrigerated trucks or
trailers that we own or lease. This form of delivery is called a “direct store delivery” or “DSD” system. We
believe that Fresh Dairy Direct-Morningstar has one of the most extensive refrigerated DSD systems in the
United States.

The primary raw material used in Fresh Dairy Direct-Morningstar products is conventional raw milk (which
contains both raw milk and butterfat) that we purchase primarily from farmers’ cooperatives, as well as from
independent farmers. The federal government and certain state governments set minimum prices for raw milk
and butterfat on a monthly basis. Another significant raw material used by Fresh Dairy Direct-Morningstar is
resin, which is a fossil fuel based product used to make plastic bottles. The price of resin is subject to fluctuations
based on changes in crude oil and natural gas prices. Other raw materials and commodities used extensively by
Fresh Dairy Direct-Morningstar include diesel fuel, used to operate our extensive DSD system, and juice
concentrates and sweeteners used in our products. Fresh Dairy Direct-Morningstar generally increases or
decreases the prices of its fluid dairy products on a monthly basis in correlation with fluctuations in the costs of
raw materials, packaging supplies and delivery costs. However,
in some cases, we are competitively or
contractually constrained with respect to the means and/or timing of price increases, particularly for non-dairy
input costs such as diesel and resin.

Fresh Dairy Direct-Morningstar has several competitors in each of our major product and geographic
markets. Competition between dairy processors for shelf-space with retailers is based primarily on price, service,
quality and the expected or historical sales performance of the product compared to its competitors. In some
cases Fresh Dairy Direct-Morningstar pays fees to customers for shelf-space. Competition for consumer sales is

4

based on a variety of factors such as brand recognition, price, taste preference and quality. Dairy products also
compete with many other beverages and nutritional products for consumer sales.

The dairy industry is a mature industry that has traditionally been characterized by slow to flat growth, low
profit margins, fragmentation and lack of network optimization. According to the United States Department of
Agriculture (“USDA”), per capita consumption of fluid milk continues to decline. Volume sales growth across
the industry has declined recently. In this environment, price competition is particularly intense, as smaller
processors seek to retain enough volume to cover their fixed costs. In addition, in this increasingly competitive
environment, we have been subject to a number of competitive bidding situations in Fresh Dairy Direct-
Morningstar, which has reduced our profitability on sales to several customers. In bidding situations, we are
subject to the risk of losing certain customers altogether. In addition, supermarkets and food retailers have
utilized competitive pricing on dairy products to drive traffic volume and influence customer loyalty, which has
significantly reduced their profit margins realized on the sale of such products. This margin compression is being
absorbed by both retailers and dairy processors. These industry dynamics have driven private label market share
gains over branded products, which is impacting the growth and profitability of our regionally branded products.
With unusually low pricing on private label gallons, our regionally branded products are exposed to significantly
wider retail price gaps versus private label. Although we expect these trends to continue, we began to see price
stabilization over the latter part of 2010.

In response to this dynamic and significant competitive pressure, many processors, including us, are now
placing an increased emphasis on cost reduction in an effort to increase margins. We made significant progress
against such initiatives in 2009 and 2010 and will continue these efforts for the next 3 to 5 years. Defined
strategies for network optimization and organizational changes are in process to improve performance, and
programs have been launched to reduce our total cost to serve and our selling and general and administrative
costs. We are focusing on sustaining positive cash flow, net debt reduction and are reinvesting for the future in
spite of the current challenging environment.

For more information on factors that could impact Fresh Dairy Direct-Morningstar, see “— Government
Regulation — Milk Industry Regulation”, “Part II — Item 7. Management’s Discussion and Analysis of
Financial Condition and Results of Operations — Known Trends and Uncertainties — Prices of Raw Milk and
Other Inputs,” as well as Note 19 to our Consolidated Financial Statements.

WhiteWave-Alpro

WhiteWave-Alpro manufactures, develops, markets and sells a variety of nationally branded dairy and
dairy-related products, such as Horizon Organic milk and other dairy products, The Organic Cow organic dairy
products, as well as other plant-based beverages, such as soy, almond, and coconut milks, and soy food products,
International Delight coffee creamers and LAND O LAKES creamers and fluid dairy products, and Silk plant-
based beverages, such as soy, almond and coconut milks, and cultured soy products. WhiteWave-Alpro also
offers branded soy-based beverages and food products in Europe and markets its products under the Alpro and
Provamel brands. Additionally, with our Hero/WhiteWave joint venture we have expanded the WhiteWave
product footprint beyond the dairy case to capitalize on the chilled fruit-based beverage opportunity with
Fruit2Day.

WhiteWave-Alpro’s net sales totaled $1.9 billion in 2010, or approximately 16% of our consolidated net
sales. WhiteWave-Alpro sells its products to a variety of customers, including grocery stores, club stores, natural
foods stores, mass merchandisers, convenience stores, drug stores and foodservice outlets. WhiteWave-Alpro
sells its products primarily through its internal sales forces and independent brokers. WhiteWave-Alpro’s largest
customer is Wal-Mart, which includes its subsidiaries such as Sam’s Club, accounting for approximately 16% of
WhiteWave-Alpro’s net sales in 2010. Approximately 82% of WhiteWave-Alpro’s net sales are domestic.

5

The following charts graphically depict WhiteWave-Alpro’s 2010 net sales by the mix of our branded

versus private label products and customer:

Brand Mix

Customers

Fruit2Day*

Alpro (3)
18%

Private Label (2)
3%

Horizon Organic (1)
24%

Land-O-Lakes
12%

Silk
23%

International Delight
20%

Foodservice
1%

C-Stores
7%

Other
8%

Retailers
84%

*Represents less than 1% of our total brand mix.

(1)
(2)
(3)

Includes Horizon Organic and The Organic Cow organic dairy products.
Includes private label organic milk and plant-based products.
Includes both Alpro and Provamel brands in Europe.

WhiteWave-Alpro currently operates five domestic and four international manufacturing facilities. For more
information about facilities in WhiteWave-Alpro, see “Item 2. Properties.” The remaining products are
manufactured by third-party manufacturers under processing agreements. The majority of WhiteWave-Alpro’s
products are delivered through warehouse delivery systems.

The primary raw materials used in our soy-based products include both organic soybeans and
non-genetically modified (“non-GMO”) soybeans. Both organic soybeans and non-GMO soybeans are generally
available from several suppliers and we are not dependent on any single supplier for these raw materials.

The primary raw material used in our organic milk-based products is organic raw milk. We currently
purchase approximately 90% of our organic raw milk from a network of more than 550 family dairy farmers
across the United States. The balance of our organic raw milk is sourced from two farms that we own. We
generally enter into supply agreements with organic dairy farmers with typical terms of two to five years, which
obligate us to purchase certain minimum quantities of organic raw milk.

The primary raw material used in our non-organic dairy products is conventional raw milk. Other raw
materials used in WhiteWave-Alpro’s products include palm oil, flavorings and sweeteners. Certain of these raw
materials are purchased under long-term contracts in order to better manage the supply and costs of our inputs.

WhiteWave-Alpro has several competitors in each of its product markets. Competition to obtain shelf-space
with retailers for a particular product is based primarily on brand recognition and the expected or historical sales
performance of the product compared to its competitors. In some cases, WhiteWave-Alpro pays fees to retailers
to obtain shelf-space for a particular product. Competition for consumer sales is based on many factors, including
brand recognition, price, taste preferences and quality. Consumer demand for plant-based and organic beverages
and foods has grown in recent years due to growing consumer confidence in the health benefits attributable to
these products, and we believe WhiteWave-Alpro has a leading position in these categories.

For more information on factors that could impact the results of WhiteWave-Alpro, see “— Government
Regulation-Milk Industry Regulation,” “Part II — Item 7. Management’s Discussion and Analysis of Financial
Condition and Results of Operations — Known Trends and Uncertainties — Prices of Raw Milk and Other
Inputs,” as well as Note 19 to our Consolidated Financial Statements.

6

Current Business Strategy

The evolution of Dean Foods into a leading dairy processor began in the early nineties with an acquisition-
focused strategy centered on creating scale to align with a consolidating customer base. Since 1993, we have
completed more than 40 acquisitions of high quality dairies, dairy products and soy brands, increasing net sales
from $150 million to more than $12 billion in 2010. We believe our portfolio of manufacturing and distribution
assets enables us to offer regional and national branded and private label products across a variety of product
categories, ranging from short shelf life (less than 20 days) to extended shelf life (45 to 60 days) to shelf stable
products (6 to 12 months), to customers in a cost effective manner. We believe that Fresh Dairy Direct-
Morningstar operates one of the most extensive refrigerated DSD networks in the United States, and WhiteWave-
Alpro maintains significant share positions in soy-based and other plant-based beverages, organic dairy and
creamers in the United States and Europe.

Our two business reporting segments, Fresh Dairy Direct-Morningstar and WhiteWave-Alpro, operate as
two distinct businesses, and we have developed separate strategies to address their respective sets of business
opportunities and challenges. As explained more fully below, our Fresh Dairy Direct-Morningstar strategy
focuses on reducing cost and increasing profitability, while working to optimize our fluid milk production
network. In contrast, we believe WhiteWave-Alpro is well positioned to build on the continuing growth of its
branded businesses, and we have developed a strategy to further expand that growth while continuing to focus on
cost reduction and capability building.

Fresh Dairy Direct-Morningstar

Large format gallons of milk are the core of our dairy business. Fresh Dairy Direct-Morningstar’s strategy is
centered around achieving significantly lower cost per unit of product produced. To build the core business while
meeting current market challenges and customer expectations, the Fresh Dairy Direct-Morningstar strategy
focuses on the following:

•

•

•

•

•

reducing farm-to-store cost for gallons of milk in large format outlets by optimizing the efficiency of
our production network;

getting leaner across the business while improving key functional capabilities by redesigning and
further streamlining certain processes, such as back office functions;

integrating the sales teams of our Fresh Dairy Direct and Morningstar organizations to offer our key
customers the breadth of our dairy portfolio and provide one face to the customer;

driving profitable growth in winning categories by selectively exiting certain non-core categories and
reinvesting in others; and

aligning our organizational structure and mobilizing the employee base to address key initiatives while
sustaining customer and profit focus.

WhiteWave-Alpro

WhiteWave-Alpro competes in categories such as organic milk, creamers and plant-based beverages (such
as soy milk and almond milk) that we believe have strong long-term growth potential due to their relative
immaturity,
low household penetration numbers and strong consumer interest. Within these categories,
WhiteWave-Alpro brands are often category leaders. To build further growth, the WhiteWave-Alpro strategy
encompasses the following:

•

•

•

expanding the plant-based beverage category’s scope by further expansion with products such as
almond and coconut milk, and continuing to innovate behind the Silk brand;

investing in emerging and alternative channels and expanding the geography and platform of our
portfolio;

reducing costs to increase profitability, including creation of a new, centrally-located U.S. production
facility to add needed capacity and further optimize the supply chain for growth;

7

•

•

developing commercial, marketing, innovation, customer logistics, financial management and strategic
sales capabilities to enhance growth within the organization; and

continuing to support our environment, community and employees through sustainability efforts,
the
building organizational diversity and safeguarding the unique culture and reputation of
organization.

Future Direction

Within these strategies, a sense of corporate responsibility remains an integral part of our efforts. As we
work to improve our business, we are committed to do it in a way that is right for our employees, shareholders,
consumers, retail customers and the environment. We will realize savings by reducing waste and duplication
while we continue to support programs that improve our local communities.

Seasonality

Our business is affected by seasonal changes in the demand for dairy products. The demand for dairy is
fairly stable through the first three quarters of the year with a marked increase in the fourth quarter. Fluid milk
volumes tend to decrease in the second and third quarters of the year primarily due to the reduction in dairy
consumption associated with our school business. However, this drop in volumes is offset by the increase in ice
cream and ice cream mix consumption during the summer months. Sales volumes are typically higher in the
fourth quarter associated with increased dairy consumption, especially fresh cream and creamers, during seasonal
holidays. Because certain of our operating expenses are fixed, fluctuations in volumes and revenue from quarter
to quarter may have a material effect on operating income for the respective quarters.

Intellectual Property

We are continually developing new technology and enhancing existing proprietary technology related to our
dairy operations. As of December 31, 2010, 16 United States patents have been issued to us and 20 United States
patent applications are pending. We primarily rely on a combination of trademarks, copyrights, trade secrets,
confidentiality procedures and contractual provisions to protect our technology and other intellectual property
rights. Despite these protections, it may be possible for unauthorized parties to copy, obtain or use certain
portions of our proprietary technology or trademarks.

Research and Development

With our state-of-the-art research and development (“R&D”) facility, we are building our capabilities
through a team of top consumer packaged goods talent across many disciplines such as product development,
dairy and plant-based science, culinary and sensory science, nutrition, packaging design and engineering, and
process engineering. Our R&D activities primarily consist of generating and testing new product concepts, new
flavors and packaging. Our total R&D expense was $25.8 million, $25.5 million and $14.0 million for 2010,
2009 and 2008, respectively.

Developments since January 1, 2010

Amendment and Extension of Senior Secured Credit Facility and Receivables-Backed Facility — On
June 30, 2010, we amended and restated our credit agreement governing our $1.5 billion 5-year senior secured
revolving credit facility, our original $1.5 billion 5-year senior secured term loan A and our original $1.8 billion
7-year senior secured term loan B. The terms of the agreement were modified to extend the maturity date for a
portion of the principal amount of the revolving credit facility and term loan A by two years, a portion of term
loan B by two years and a portion of term loan B by three years (subject to the condition that we meet one of the
required leverage, debt, cash or credit rating tests); amend the maximum permitted leverage ratio; as well as
amend certain other terms, including an increase in the undrawn costs of the extended portion of the revolving

8

credit facility and the drawn costs of the extended portions of the revolving credit facility, term loan A and term
loan B. Additionally, on June 30, 2010, we amended our receivables-backed facility to modify the maximum
permitted leverage ratio to be consistent with the senior secured credit facility. The receivables-backed facility
was also modified to extend the liquidity termination date and to amend certain other terms.

On December 9, 2010, we entered into an amendment to the credit agreement governing our senior secured
credit facility. The terms of the agreement were modified to amend our maximum permitted leverage ratio and
minimum permitted interest coverage ratio and to add a senior secured leverage ratio to the existing credit
facility. Additionally, on December 9, 2010, we amended our receivables-backed facility to modify the
maximum permitted leverage ratio and minimum interest coverage ratio and to add a senior secured leverage
ratio to be consistent with the amended ratios discussed above with respect to the senior secured credit facility.
The terms of our receivables purchase agreement were also modified to extend the liquidity termination date and
to amend certain other terms.

Senior Notes Offering — On December 9, 2010, we agreed to sell in a private placement $400 million in
aggregate principal amount of 9.75% senior notes due 2018. These notes are our senior unsecured obligations
and mature on December 15, 2018 with interest payable on June 15 and December 15 of each year, commencing
June 15, 2011.

On December 16, 2010, the date the senior notes were issued, we used the net proceeds of the offering to
pay fees and expenses related to the December 2010 amendment to the senior secured credit facility described
above and to repay a portion of our outstanding 2014 tranche A term loan borrowings.

See “Part II — Item 7. Management’s Discussion and Analysis of Financial Condition and Results of
Operations — Liquidity and Capital Resources — Current Debt Obligations” below regarding our outstanding
indebtedness and Note 9 to our Consolidated Financial Statements for a more complete description of the credit
facility amendments, receivables-backed facility amendments and the $400 million senior notes offering.

Competitive Pressures and Consumer Environment — As a result of the intensely competitive dairy
environment, we have been subject to a number of competitive bidding situations in Fresh Dairy Direct-
Morningstar, which has reduced our profitability on sales to several customers. The dairy industry has
experienced widespread price renegotiations. In bidding situations, we are subject to the risk of losing certain
customers altogether. In addition, supermarkets and food retailers have utilized competitive pricing on dairy
products to drive traffic volume and influence customer loyalty, which has significantly reduced their profit
margins realized on the sale of such products. This margin compression is being absorbed by both retailers and
dairy processors, which negatively impacts our margins. Also, these industry dynamics continue to drive private
label market share gains over branded products, which is impacting the growth and profitability of our regionally
branded products. With unusually low pricing on private label gallons of fresh fluid milk, our regionally branded
products are exposed to significantly wider retail price gaps versus private label products. Although we expect
these trends to continue, we began to see price stabilization over the latter part of 2010. These margin pressures
underscore the importance of our low cost strategy.

In response to this dynamic and significant competitive pressure, many processors, including us, are now
placing an increased emphasis on cost reduction in an effort to increase margins. We made significant progress
against such initiatives in 2009 and 2010 and intend to continue these efforts over the next three to five years.
Defined strategies for network optimization and organizational changes are in process to improve performance
and programs have been launched to reduce our total cost to serve and our selling and general and administrative
costs. We remain focused on sustaining positive cash flow, and net debt reduction, and we are reinvesting for the
future in spite of the current challenging environment for our core dairy business.

In addition to these ongoing pressures, additional challenges became more pronounced as 2010 progressed.
The continued recessionary environment has resulted in a significant segment of consumers who are cutting back
on purchases of even the most essential items, which has had a pronounced impact on the fluid milk category.

9

We have experienced a reduction in volumes in the industry and in our Fresh Dairy Direct-Morningstar segment.
In addition, our customer base has underperformed their historical growth rates versus their peers which has
negatively impacted our total volume growth. We expect this trend to continue in the near term.

Conventional Milk Environment — Conventional milk prices continued to increase throughout 2010
compared to historic lows in 2009. We expect the Class I and Class II price to increase fairly dramatically
through mid-second quarter of 2011 and level off in the back half of the year. This significant increase in
conventional milk prices is a result of limited supply due to production challenges coupled with strong global
demand for both Class I and Class II inputs.

Divestiture of Non-core Dairy Operations — During the second quarter of 2010, we committed to a plan to
sell the business operations of Rachel’s, which provides organic branded dairy-based chilled yogurt, milk and
related dairy products primarily in the United Kingdom. The sale of these operations was completed on August 4,
2010. The decision to sell these operations was part of our strategic growth plan and allows us to target our
investments in growing our core dairy and branded businesses by divesting non-core businesses. All of our
Rachel’s operations, previously reported within the WhiteWave-Alpro segment, have been reclassified as
discontinued operations. See Note 2 to our Consolidated Financial Statements.

In the fourth quarter of 2010, we entered into two separate agreements to sell our Mountain High and private
label yogurt operations, which are part of our Fresh Dairy Direct-Morningstar segment. We expect to recognize a
gain related to the sale of both of these operations. On February 1, 2011, we completed the sale of our Mountain
High yogurt operations. We expect our private label operations sale to close in the first half of 2011. These
operations did not meet the requirements to be accounted for as discontinued operations.

Management Changes — On October 8, 2010, we announced that Harrald F. Kroeker would no longer serve
as President of our Fresh Dairy Direct division, effective October 6, 2010. Mr. Kroeker received benefits in
accordance with our Executive Severance Pay Plan, filed as Exhibit 10.1 to our Current Report on Form 8-K
filed on November 19, 2010. We also announced that Christopher Sliva was promoted to Chief Commercial
Officer effective October 6, 2010. In this new role, Mr. Sliva has responsibility for directing the commercial
strategy of both the Fresh Dairy Direct and Morningstar divisions’ sales and lines of business. These
management changes are consistent with the recent realignment of our segments to focus on cost and service
leadership within the Fresh Dairy Direct-Morningstar segment.

On November 9, 2010, we announced that Jack Callahan would resign his role as Executive Vice President
and Chief Financial Officer to accept a similar position as Chief Financial Officer of another publicly traded
company. We also announced that Shaun P. Mara would succeed Mr. Callahan as our Chief Financial Officer
effective December 1, 2010. Mr. Mara began his employment as our Senior Vice President and Chief Accounting
Officer on June 28, 2010.

On November 30, 2010, we terminated the employment of Paul T. Moskowitz, Executive Vice President,
Human Resources. Mr. Moskowitz received benefits in accordance with our Executive Severance Pay Plan, filed
as Exhibit 10.1 to our Current Report on Form 8-K filed on November 19, 2010.

On December 9, 2010, we announced the appointment of Scott K. Vopni as our Vice President and Chief
Accounting Officer, effective December 15, 2010. Mr. Vopni had previously served as our Vice President and
Corporate Controller since joining us in May of 2008.

Facility Closing and Reorganization Activities — In an effort to continue to optimize our distribution
network, we closed one facility and announced the closure of another facility within Fresh Dairy Direct-
Morningstar during 2010. Additionally during 2010, we incurred charges related to work force reductions under
management and department realignments, and a broad-based reduction of facility and distribution personnel and
peer benchmarking plans. We recorded facility closing and reorganization costs of $30.8 million in 2010. We

10

will continue to look for areas of opportunity and will likely incur additional costs related to this effort and other
initiatives in the near term as we look to transform our business.

Vermont Litigation Settlement — We have reached an agreement with the plaintiffs in our previously
disclosed purported class action antitrust lawsuit filed in the United States District Court for the District of
Vermont to settle all claims against us in such action. Pursuant to the agreement, which is subject to court
approval, we would be obligated to pay $30 million and would agree to other terms and conditions with respect
to our raw milk procurement activities at certain of our processing plants located in the Northeast. These other
terms and conditions are not expected to have a material impact to our results of operations. We recorded a
pre-tax charge in the fourth quarter of 2010 of approximately $30 million with respect to the proposed settlement.
See “Item 3. Legal Proceedings.”

Employees

As of December 31, 2010, we had the following employees:

Fresh Dairy Direct-Morningstar . . . . . . . . . . . . . . . . . . . . . . .
WhiteWave-Alpro . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Corporate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

No. of
Employees

% of
Total

22,711
2,311
758

25,780

88%
9
3

100%

Approximately 37% of Fresh Dairy Direct-Morningstar’s and 27% of WhiteWave-Alpro’s employees
participate in collective bargaining agreements. We believe our relationship with our employees and these
organizations is satisfactory.

Government Regulation

Food Related Regulations

As a manufacturer and distributor of food products, we are subject to a number of food-related regulations,
including the Federal Food, Drug and Cosmetic Act and regulations promulgated thereunder by the U.S. Food
and Drug Administration (“FDA”). This comprehensive regulatory framework governs the manufacture
(including composition and ingredients), labeling, packaging and safety of food in the United States. The FDA:

•

•

•

regulates manufacturing practices for
regulations;

foods through its current good manufacturing practices

specifies the standards of identity for certain foods, including many of the products we sell; and

prescribes the format and content of certain information required to appear on food product labels.

In addition, the FDA enforces the Public Health Service Act and regulations issued thereunder, which
authorizes regulatory activity necessary to prevent the introduction, transmission or spread of communicable
diseases. These regulations require, for example, pasteurization of milk and milk products. We are subject to
numerous other federal, state and local regulations involving such matters as the licensing and registration of
manufacturing facilities, enforcement by government health agencies of standards for our products, inspection of
our facilities and regulation of our trade practices in connection with the sale of food products.

We use quality control laboratories in our manufacturing facilities to test raw ingredients. Product quality
and freshness are essential to the successful distribution of our products. To monitor product quality at our
facilities, we maintain quality control programs to test products during various processing stages. We believe our
facilities and manufacturing practices are in material compliance with all government regulations applicable to
our business.

11

Employee Safety Regulations

We are subject to certain safety regulations, including regulations issued pursuant to the U.S. Occupational
Safety and Health Act. These regulations require us to comply with certain manufacturing safety standards to
protect our employees from accidents. We believe that we are in material compliance with all employee safety
regulations applicable to our business.

Environmental Regulations

We are subject to various environmental regulations. Our plants use a number of chemicals that are
considered to be “extremely” hazardous substances pursuant to applicable environmental laws due to their
toxicity, including ammonia, which is used extensively in our operations as a refrigerant. Such chemicals must be
handled in accordance with such environmental laws. Also, on occasion, certain of our facilities discharge
biodegradable wastewater into municipal waste treatment facilities in excess of levels allowed under local
regulations. As a result, certain of our facilities are required to pay wastewater surcharges or to construct
wastewater pretreatment facilities. To date, such wastewater surcharges have not had a material effect on our
financial condition or results of operations.

We maintain above-ground and under-ground petroleum storage tanks at many of our facilities. We
periodically inspect these tanks to determine whether they are in compliance with applicable regulations and, as a
result of such inspections are required to make expenditures from time to time in order to ensure that these tanks
remain in compliance. In addition, upon removal of the tanks, we are sometimes required to make expenditures
to restore the site in accordance with applicable environmental laws. To date, such expenditures have not had a
material effect on our financial condition or results of operations.

We believe that we are in material compliance with the environmental regulations applicable to our
business. We do not expect the cost of our continued compliance to have a material impact on our capital
expenditures, earnings, cash flows or competitive position in the foreseeable future. In addition, any asset
retirement obligations are not material.

Milk Industry Regulation

The federal government establishes minimum prices that we must pay to producers in federally regulated
areas for raw milk. Raw milk primarily contains raw skim milk, in addition to a small percentage of butterfat.
Raw milk delivered to our facilities is tested to determine the percentage of butterfat and other milk components,
and we pay our suppliers for the raw milk based on the results of these tests.

The federal government’s minimum prices vary depending on the processor’s geographic location or sales
area and the type of product manufactured. Federal minimum prices change monthly. Class I butterfat and raw
skim milk prices (which are the minimum prices we are required to pay for raw milk that is processed into
Class I products such as fluid milk) and Class II raw milk prices (which are the prices we are required to pay for
raw milk that is processed into Class II products such as cottage cheese, creams, creamers, ice cream and sour
cream) for each month are announced by the federal government the immediately preceding month.

Some states have established their own rules for determining minimum prices for raw milk. In addition to
the federal or state minimum prices, we also may pay producer premiums, procurement costs and other related
charges that vary by location and supplier.

Organic Regulations

Our organic products are required to meet the standards set forth in the Organic Foods Production Act and
the regulations adopted thereunder by the National Organic Standards Board. These regulations require strict
methods of production for organic food products and limit the ability of food processors to use non-organic or

12

synthetic materials in the production of organic foods or in the raising of organic livestock. We believe that we
are in material compliance with the organic regulations applicable to our business.

Minority Holdings and Other Interests

Consolidated Container Company

We own an approximately 25% non-controlling interest, on a fully diluted basis, in Consolidated Container
Company (“CCC”), one of the nation’s largest manufacturers of rigid plastic containers and our largest supplier
of plastic bottles and bottle components. We have owned a minority interest in CCC since July 1999 when we
sold our U.S. plastic packaging operations to CCC. Vestar Capital Partners, an unaffiliated entity, controls CCC
through a majority ownership interest. Pursuant to our agreements with Vestar, we control two of the eight seats
on CCC’s Management Committee. We also have entered into various supply agreements with CCC through
December 31, 2011, pursuant to which we have agreed to purchase certain of our requirements for plastic bottles
and bottle components from CCC. We spent $314.9 million, $268.2 million and $330.3 million on products
purchased from CCC during the years ended December 31, 2010, 2009 and 2008, respectively. See Note 3 to our
Consolidated Financial Statements for more information on our relationship with CCC.

Hero/WhiteWave Joint Venture

In January 2008, we entered into and formed a 50/50 strategic joint venture with Hero Group (“Hero”), a
producer of international fruit and infant nutrition brands, as a strategic growth platform for both companies to
extend their global reach by leveraging their established innovation, technology, manufacturing and distribution
capabilities over time. The joint venture, Hero/WhiteWave, LLC, which is based in Broomfield, Colorado,
combines Hero’s expertise in fruit, innovation and process engineering with WhiteWave’s deep understanding of
the American consumer and distribution network, as well as the go-to-market system of WhiteWave. In the
second quarter of 2009, the joint venture introduced Fruit2Day to grocery and club store channels in North
America.

Beginning January 1, 2009, several new agreements, including a capital lease for plant assets constructed
within WhiteWave’s existing facilities and operating agreements that include the assignment of day to day
management responsibilities to WhiteWave, were entered into between WhiteWave and the joint venture. We
determined that this, along with the increased risk created by the capital expenditures and favorable lease terms
to the joint venture, as well as the benefit the new product line brings to WhiteWave’s existing customer
relationships, resulted in the decision that WhiteWave was the primary beneficiary of the variable interests. As
such, the financial position and the results of operations for the joint venture should be consolidated for financial
reporting purposes. Accordingly, the joint venture has been consolidated as of January 1, 2009. The resulting
non-controlling interest’s share in the equity of the joint venture is presented as a separate component of
stockholders’ equity in the Consolidated Balance Sheets and Consolidated Statements of Stockholders’ Equity
and the net loss attributable to the non-controlling interest is presented in the Consolidated Statements of Income.

During 2010 and 2009, our joint venture partner made cash contributions of $8.0 million and $12.7 million,
respectively, and non-cash contributions of $0.5 million in 2009 to the joint venture. Our joint venture partner did
not make any non-cash contributions in 2010. During 2010 and 2009, we made cash contributions of $8.8 million
and $10.5 million, respectively, and continued non-cash contributions in the form of the capital lease for the
manufacturing facility constructed at one of our existing WhiteWave plants. The joint venture has assets of
$26.6 million, primarily property, plant and equipment, and liabilities of $3.5 million, which are included within
the WhiteWave-Alpro segment.

Where You Can Get More Information

Our fiscal year ends on December 31. We file annual, quarterly and current reports, proxy statements and

other information with the Securities and Exchange Commission.

13

You may read and copy any reports, statements or other information that we file with the Securities and
Exchange Commission at the Securities and Exchange Commission’s Public Reference Room at 100 F Street,
N.E., Washington D.C. 20549. You can request copies of these documents, upon payment of a duplicating fee, by
writing to the Securities and Exchange Commission. Please call the Securities and Exchange Commission at
1-800-SEC-0330 for further information on the operation of the Public Reference Room.

We file our reports with the Securities and Exchange Commission electronically through the Securities and
Exchange Commission’s Electronic Data Gathering, Analysis and Retrieval (“EDGAR”) system. The Securities
and Exchange Commission maintains an Internet site that contains reports, proxy and information statements and
other information regarding companies that file electronically with the Securities and Exchange Commission
through EDGAR. The address of this Internet site is http://www.sec.gov.

We also make available free of charge through our website at www.deanfoods.com our annual report on
Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed
or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 as soon as reasonably
practicable after we electronically file such material with, or furnish it
the Securities and Exchange
Commission.

to,

Our Code of Ethics is applicable to all of our employees and directors, with the exception of our Alpro
employees, who are subject to a comparable code of ethics. Our Code of Ethics is available on our corporate
website at www.deanfoods.com, together with the Corporate Governance Principles of our Board of Directors and
the charters of all of the Committees of our Board of Directors. Any waivers that we may grant to our executive
officers or directors under the Code of Ethics, and any amendments to our Code of Ethics, will be posted on our
corporate website. If you would like hard copies of any of these documents, or of any of our filings with the
Securities and Exchange Commission, write or call us at:

Dean Foods Company
2711 North Haskell Avenue, Suite 3400
Dallas, Texas 75204
(214) 303-3400
Attention: Investor Relations

Item 1A. Risk Factors

Competitive Risks

Continued Discounting of Fluid Milk by Large Format Retailers, and the Continued Shift to Private

Label, Has Decreased Our Operating Margins and Profitability.

Many of our customers, such as supermarkets, warehouse clubs and food distributors, have experienced
industry consolidation in recent years and this consolidation is expected to continue. These consolidations have
produced large, sophisticated customers with increased buying power, and have increased the significance of
large-format retailers and discounters. As a result, we are increasingly dependent on key retailers, which have
significant bargaining power. In addition, some of these customers are vertically integrated and have re-dedicated
key shelf-space currently occupied by our regionally branded products for their private label products. Higher
levels of price competition and higher resistance to price increases have had a significant impact on our business.
During 2010, retailers continued the trend of discounting their prices on milk to drive value for the end consumer
and to increase traffic flow, resulting in lower margins for the retailers. Retailers in turn pushed suppliers for
lower prices, which has decreased our margins. In addition, the fluid milk category experienced unusually low
pricing on private label milk during 2010, which widened the price gaps between private label and our regional
brands. As a result, we are experiencing a continued shift from branded to private label products, which further
impacts our profitability. If we are unable to structure our business to appropriately respond to the pricing
demands of our customers, we may lose these customers to other processors that are willing to sell product at a

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lower cost. Additionally, if we are not able to lower our cost structure adequately, our profitability could continue
to be adversely affected by the decrease in margin.

Volume Softness in the Dairy Category Has Had a Negative Impact on Our Sales and Profits.

Industry wide volume softness across dairy product categories during much of 2010, as compared to 2009,
has increased the impact of declining margins on our business. Periods of declining volumes limit the amount of
price increases that we can seek to recapture. If these trends continue or accelerate, our business could be further
negatively impacted. In addition, during 2010, we experienced a decline in historical volumes from some of our
largest customers, which negatively impacted our sales and profitability and which will continue to have a
negative impact in the future if we are not able to attract and retain a profitable customer mix.

Increased Competition With Our Nationally Branded Products and Economic Conditions Could Impede

Our Growth Rate and Profit Margin.

Our national brands such as Silk soymilk, Horizon Organic, Land O Lakes and International Delight have
benefited in many cases from being the first to introduce products in their categories. As plant-based, organic and
coffee-enhancing products have gained in popularity with consumers, our products in these categories have
attracted competitors, including private label competitors who sell their products at a lower price. In addition, our
nationally branded products typically have higher marketing costs than our regionally branded or private label
products, which could negatively impact the profitability of this segment of our business. In periods of economic
decline, consumers tend to purchase lower-priced products, including conventional milk, coffee creamers and
other private label products, which could reduce sales of our nationally branded products. The willingness of
consumers to purchase our products will depend upon our ability to offer products providing the right consumer
benefits at the right price. Further trade down to lower priced products could adversely affect our sales and profit
margin for our nationally branded products.

Many large food and beverage companies have substantially more resources than we do, and they may be
able to market their products more successfully than we can, which could cause our growth rate in certain
categories to be slower than our forecast and could cause us to lose sales. Some of our nationally branded
products compete intensely for consumer spend. If our nationally branded products fail to compete successfully
with other branded offerings in the marketplace, our sales and profitability could be negatively impacted.

The Loss of Any of Our Largest Customers Could Negatively Impact Our Sales and Profits.

Our largest customer, Wal-Mart Stores, Inc. and its subsidiaries, including Sam’s Club, accounted for
approximately 19% of consolidated net sales during 2010. During 2010, our top five customers, collectively,
accounted for approximately 30% of our consolidated net sales. We do not generally enter into sales agreements
with our customers, and where such agreements exist, they are generally terminable at will by the customer. The
loss of any large customer for an extended length of time could negatively impact our sales and profits.

We are Subject to Competitive Bidding Situations, the Outcome of Which Could Negatively Impact Our

Sales and Profits.

Many of our retail customers have become increasingly price sensitive in the current economic climate,
which has intensified the competitive environment in which we operate. As a result of the intensely competitive
dairy environment, we have been subject to a number of competitive bidding situations, particularly within Fresh
Dairy Direct-Morningstar, which reduced our profitability on sales to several customers. We expect this trend of
competitive bidding to continue. In bidding situations, we are subject to the risk of losing certain customers
altogether, which could negatively impact our sales and profits.

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Commodity Risks

Availability of and Changes in Raw Material and Other Input Costs Can Adversely Affect Us.

Our business is heavily dependent on raw materials such as conventional and organic raw milk, butterfat,
diesel fuel, resin and soybeans and other commodities. In addition to our dependence on conventional and
organic raw milk, Fresh Dairy Direct-Morningstar is a large consumer of diesel fuel and WhiteWave-Alpro is
affected by the costs of petroleum-based products through the use of common carriers and packaging. The prices
of these materials increase and decrease based on market conditions, and in some cases, governmental regulation.
Weather,
including the heightened impact of weather events related to climate change, also affects the
availability and pricing of these inputs. Sometimes supplies of raw materials, such as resin, have been
insufficient to meet demand. Volatility in the cost of our raw materials, particularly diesel fuel and other
non-dairy inputs, has adversely affected our profitability as upward price changes often lag changes in costs we
charge our customers. In some cases the price increases of these non-dairy inputs may exceed the price increases
we are able to pass along to our customers due to contractual and other limitations. In periods of rapid
movements in dairy commodities, our ability to pass-through costs is impaired due to the timing of passing
through the price increases. These lags and limitations have periodically decreased our profit margins in
inflationary markets. In addition, raw material cost fluctuations from year to year can cause our revenues to
increase or decrease significantly compared to prior periods.

The organic dairy industry is continuing to develop in terms of consumer acceptance and market
penetration, and, as a result, continues to experience significant swings in supply and demand. Industry
regulation, and the costs of organic farming compared to prices paid for conventional farming can impact the
supply of organic raw milk in the market. An oversupply of organic raw milk can cause significant discounting in
the sale of organic packaged milk, which increases competitive pressure on our branded products and could cause
our profitability to suffer. An undersupply or higher input costs can increase the costs of organic raw milk, which
can cause retail price gaps between private label and branded products to expand, potentially decreasing our
volumes and adversely affecting our results. The impact of retail price gaps may be compounded by the current
economic environment as consumers become increasingly focused on product pricing. In addition, consumers
may choose to purchase conventional milk instead of organic milk due to differences in cost, which could further
decrease our volumes and results.

Capital Markets and General Economic Risks

We Have Substantial Debt and Other Financial Obligations and We May Incur Even More Debt.

We have substantial debt and other financial obligations and significant unused borrowing capacity. At
December 31, 2010, we had outstanding borrowings of approximately $3.0 billion under our senior secured
credit facility, of which $2.6 billion were in term loan borrowings with an additional $453.0 million in
outstanding borrowings under our $1.5 billion senior secured revolving line of credit. In addition, we had
$1.0 billion of face value of senior unsecured notes outstanding and nothing outstanding under our receivables-
backed facility at December 31, 2010.

We have pledged substantially all of our assets (including the assets of our subsidiaries) to secure our

indebtedness. Our debt level and related debt service obligations:

•

•

•

•

•

require us to dedicate significant cash flow to the payment of principal and interest on our debt which
reduces the funds we have available for other purposes;

may limit our flexibility in planning for or reacting to changes in our business and market conditions or
funding our strategic growth plan;

impose on us additional financial and operational restrictions;

expose us to interest rate risk since a portion of our debt obligations are at variable rates; and

restrict our ability to fund acquisitions.

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In addition, in the current economic climate, investors may be apprehensive about investing in companies
such as ours that carry a substantial amount of leverage on their balance sheets, and this apprehension may
adversely affect the price of our common stock.

Under our senior secured credit facility, we are required to maintain certain financial covenants, including,
but not limited to, maximum senior secured leverage, maximum leverage and minimum interest coverage ratios,
each as defined under and calculated in accordance with the terms of our senior credit facility and receivables-
backed facility. As of December 31, 2010, our maximum permitted leverage ratio was 5.75 times consolidated
funded indebtedness to consolidated EBITDA for the prior four consecutive quarters. As of December 31, 2010,
our leverage ratio was 5.13 times. The maximum permitted leverage ratio under both the senior secured credit
facility and the receivables facility will decline to 5.50 times as of March 31, 2012. Failure to comply with the
financial covenants (as defined in our credit agreements), or any other non-financial or restrictive covenant,
could create a default under our senior secured credit facility and under our receivables-backed facility. Upon a
default, our lenders could accelerate the indebtedness under the facilities, foreclose against their collateral or seek
other remedies, which would jeopardize our ability to continue our current operations. We may be required to
amend our credit facility, refinance all or part of our existing debt, sell assets, incur additional indebtedness or
raise equity. Further, based upon our actual performance levels, our senior secured leverage ratio, leverage ratio
and minimum interest coverage ratio requirements or other financial covenants could limit our ability to incur
additional debt, which could hinder our ability to execute our current business strategy.

Throughout 2010, significant pricing pressures from our retailer customers, as well as volume declines,
decreased our operating profitability. Our ability to make scheduled payments on our debt and other financial
obligations and comply with financial covenants depends on our financial and operating performance. Our
financial and operating performance will continue to be subject to prevailing economic conditions and to
financial, business and other factors, some of which are beyond our control.

Our ability to maintain an adequate level of liquidity in the future is dependent on our ability to renew our
receivables-backed facility annually and refinance our senior secured credit facility, portions of which mature
beginning in 2012. See “Part II — Item 7. Management’s Discussion and Analysis of Financial Condition and
Results of Operations — Liquidity and Capital Resources — Current Obligations” below for more information.
The timing, approach, and terms of any such refinancing would depend upon market conditions and
management’s judgment, among other factors.

An Impairment in the Carrying Value of Goodwill Could Negatively Impact Our Consolidated Results of

Operations and Net Worth.

As of December 31, 2010, we had $3.2 billion of goodwill representing approximately 40% of our total
assets, of which $2.5 billion was associated with our Fresh Dairy Direct-Morningstar segment, and $0.7 billion
was associated with our WhiteWave-Alpro segment. We record goodwill initially at fair value and review its fair
value for impairment at least annually, as of December 1, or more frequently if impairment indicators, such as
disruptions to the business, unexpected significant declines in operating performance or sustained market
capitalization declines, are present. Goodwill impairment is determined using a two-step process. The first step is
to identify if a potential impairment exists by comparing the fair value of a reporting unit with its carrying
amount, including goodwill. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the
reporting unit is not considered to have a potential impairment and the second step of the impairment test is not
necessary. However, if the carrying amount of a reporting unit exceeds its fair value, the second step is
performed to determine if goodwill is impaired and to measure the amount of impairment loss to recognize, if
any. The second step compares the implied fair value of goodwill with the carrying amount of goodwill. If the
implied fair value of goodwill exceeds the carrying amount, then goodwill is not considered impaired. However,
if the carrying amount of goodwill exceeds the implied fair value, an impairment loss is recognized in an amount
equal to that excess.

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In performing the first step analysis, we calculate the value of goodwill using an income approach based on
the present value of future cash flows of each reporting unit, as well as a market approach that reflects market
participant views we believe would exist in an exit transaction. For fiscal 2010, our analysis indicates that each of
our reporting units has a fair value in excess of its carrying value and no impairment charge will be required;
however, the excess of the reporting unit fair values over carrying values, specifically with respect to our Fresh
Dairy Direct reporting unit, is significantly less than in prior years. We can provide no assurance that we will not
have an impairment charge in future periods as a result of changes in our operating results.

In assessing the fair value of our reporting units, we make estimates and assumptions about sales, growth
rates, our cost of capital and discount rates based on budgets, business plans, economic projections, anticipated
future cash flows and marketplace data. There are inherent uncertainties related to these factors and
management’s judgment in applying these factors and different assumptions could result in goodwill impairment
charges in the future, which could be substantial. Any such impairment would result in our recognizing a
non-cash charge, which may adversely affect our results of operations.

The Costs of Providing Employee Benefits Have Escalated, and Liabilities Under Certain Plans May be
Triggered due to Our Actions or the Actions of Others, Which May Adversely Affect Our Profitability and
Liquidity.

We sponsor various defined benefit and defined contribution retirement plans, as well as contribute to
various multi-employer plans on behalf of our employees. Changes in interest rates or in the market value of plan
assets could affect the funded status of our pension plans. This could cause volatility in our benefits costs and
increase future funding requirements of our plans. Pension and post-retirement costs also may be significantly
affected by changes in key actuarial assumptions including anticipated rates of return on plan assets and the
discount rates used in determining the projected benefit obligation and annual periodic pension costs. Recent
changes in federal laws require plan sponsors to eliminate, over defined time periods, the underfunded status of
plans that are subject to ERISA rules and regulations. In addition, turmoil in the financial markets in 2008
brought significant declines in the fair market value of the equity and debt instruments that we hold within our
to settle future defined benefit plan obligations. Our funded status as of
defined benefit master trust
December 31, 2010 decreased by $4.5 million from the prior year end and is still $55.6 million lower than our
funded status at December 31, 2007. A significant increase in future funding requirements could have a negative
impact on our results of operations, financial condition and cash flows.

Certain of our defined benefit retirement plans, as well as many of the multi-employer plans in which we
participate, are less than fully funded. Network optimization activities, including facility closings, may trigger
cash payments or previously unrecognized obligations under our defined benefit retirement plans or multi-
employer plans in which we participate. In addition, certain actions or the financial condition of other companies
which participate in multi-employer plans may create financial obligations for us, which circumstances are
entirely out of our control. Future funding requirements, and related charges, associated with multi-employer
plans in which we participate could have a negative impact on our results of operations, financial condition and
cash flows.

The Continued Recessionary Economy May Adversely Impact Our Business and Results of Operations.

The dairy industry is sensitive to changes in general economic conditions, both nationally and locally. The
continued recessionary economy has had an adverse effect on consumer spending patterns. Higher levels of
unemployment, higher consumer debt levels, or other unfavorable economic factors could further adversely
affect consumer demand for products we sell or distribute, which in turn adversely affects our results of
operations. There can be no assurances that government responses to the economic downturn will restore
consumer confidence.

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Changes in Our Credit Ratings May Have a Negative Impact on Our Future Financing Costs or the

Availability of Capital.

Some of our debt is rated by Standard & Poor’s, Moody’s, and Fitch Ratings, and there are a number of
factors beyond our control with respect to these ratings. During 2010, in response to the decline in our operating
results and the difficult dairy operating environment, both Standard & Poor’s and Fitch Ratings downgraded our
credit ratings by one level each. Following these actions, our credit ratings continue to be considered below
“investment grade” by the ratings agencies. Although the interest rate on our existing credit facilities is not
affected by changes in our credit ratings, these recent ratings changes or further downgrades in our credit ratings
may impair our ability to raise additional capital in the future on terms that are acceptable to us, may cause the
value of our securities to decline and may have other negative implications with respect to our business. Ratings
reflect only the views of the ratings agency issuing the rating, are not recommendations to buy, sell or hold our
securities and may be subject to revision or withdrawal at any time by the ratings agency issuing the rating. Each
rating should be evaluated independently of any other rating.

Strategic Growth Plan Risks

We May Not Realize Anticipated Benefits from Our Strategic Growth Plan or Reduce Costs as Expected.

We are implementing a strategic growth plan, which includes a number of transformational initiatives, that
we believe are necessary in order to position our business for future success and growth. Our future success
depends upon our ability to achieve a lower cost structure and operate efficiently in the highly competitive food
and beverage industry, particularly in an environment of increased competitive activity. In order to capitalize on
our cost reduction efforts, it will be necessary to make certain investments in our business, which may be limited
due to capital constraints. In addition, it is critical that we have the appropriate personnel in place to continue to
lead and execute our plan. Currently, operating conditions have had negative implications for overall employee
compensation, which has increased the risk that we may not be able to retain qualified personnel to carry out our
strategies. We continue to implement profit-enhancing initiatives that impact our supply chain and related
functions. These initiatives are focused on cost-saving opportunities in procurement, distribution, conversion and
network optimization. Over the next several years, these initiatives will require investments in people, systems,
tools and facilities. Our future success and earnings growth depends in large part on our ability to reduce costs,
improve efficiencies and better serve our customers. If we are unable to successfully implement these initiatives
or fail to implement them as timely as we anticipate, we could become cost disadvantaged in the marketplace,
and our competitiveness and our profitability could decrease. In addition, our failure to achieve anticipated cost
savings could lead to an impairment of our goodwill.

Product, Supply Chain and Systems Risks

We Must Identify Changing Consumer Preferences and Develop and Offer Products to Meet Their

Preferences.

Consumer preferences evolve over time and the success of our products depends on our ability to identify
the tastes, dietary preferences and purchasing habits of consumers and to offer products that appeal to their
preferences. Introduction of new products and product extensions requires significant development and
marketing investment, and we may fail to realize anticipated returns on such investments due to lack of consumer
acceptance of such products. Currently, we believe consumers are trending toward health and wellness
beverages. Although we continue to invest in research and development in order to capitalize on this trend, there
are currently several global companies with greater resources which compete with us in the health and wellness
space. In addition, as consumers become increasingly aware of the environmental and social impacts of the
products they purchase their preferences and purchasing decisions may change. If our products fail to meet
changing consumer preferences, the return on our investment in those areas will be less than anticipated and our
product strategy may not succeed.

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We May Experience Liabilities or Harm to Our Reputation as a Result of Product Issues, Such as

Product Recalls.

We sell products for human consumption, which involves a number of risks. Product contamination,
spoilage or other adulteration, product misbranding or product tampering could require us to recall products. We
also may be subject to liability if our products or operations violate applicable laws or regulations or in the event
our products cause injury, illness or death. In addition, we advertise our products and could be the target of
claims relating to false or deceptive advertising under U.S. federal and state laws, including consumer protection
statutes of some states. A significant product liability or other legal judgment against us or a widespread product
recall may negatively impact our profitability. Even if a product liability or consumer fraud claim is unsuccessful
or is not merited, the negative publicity surrounding such assertions regarding our products or processes could
materially and adversely affect our reputation and brand image, particularly in categories such as fluid milk that
have strong health and wellness credentials.

Disruption of Our Supply Chain or Transportation Systems Could Adversely Affect Our Business.

the financial and/or operational

Damage or disruption to our manufacturing or distribution capabilities due to weather, natural disaster, fire,
terrorism, pandemic, strikes,
instability of key suppliers, distributors,
warehousing and transportation providers, or other reasons could impair our ability to manufacture or distribute
our products. To the extent that we are unable, or it is not financially feasible, to mitigate the likelihood or
potential impact of such events, or to effectively manage such events if they occur, there could be an adverse
effect on our business and results of operations, and additional resources could be required to restore our supply
chain. In addition, we are subject to federal motor carrier regulations, such as the Federal Motor Carrier Safety
Act, with which our extensive DSD system must comply. Failure to comply with such regulations could result in
our inability to deliver product to our customers in a timely manner, which could adversely affect our reputation
and our results.

Our Business Operations Could be Disrupted if Our Information Technology Systems Fail to Perform

Adequately.

The efficient operation of our business depends on our information technology systems. We rely on our
information technology systems to effectively manage our business data, communications, supply chain,
logistics, accounting and other business processes. If we do not allocate and effectively manage the resources
necessary to build and sustain an appropriate technology infrastructure, our business or financial results could be
negatively impacted. In addition, our information technology systems may be vulnerable to damage or
interruption from circumstances beyond our control, including systems failures, security breaches, and viruses.
Any such damage or interruption could have a material adverse effect on our business.

Legal and Regulatory Risks

Pending Antitrust Lawsuits May have a Material Adverse Impact on Our Business.

We are the subject of several antitrust lawsuits, the outcome of which we are unable to predict. Increased
scrutiny of the dairy industry has resulted, and may continue to result, in an increase in litigation against us. Such
lawsuits are expensive to defend and could cause a diversion of management’s attention. In some cases, pursuant
to statute, damages recoverable by private plaintiffs may be trebled, which could result in a large judgment
against us in the event we do not prevail in a trial situation. In addition to increased litigation costs, these actions
could expose us to negative publicity, which might adversely affect our brands, reputation and/or customer
preference for our products. In addition, mergers and acquisitions activities are subject to these antitrust and
competition laws, which have impacted, and may continue to impact, our ability to pursue strategic transactions.

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The Dairy Industry in Which We Operate Has Been Subject to Increased Government Scrutiny Which

Could Have an Adverse Impact on Our Business.

We are subject to antitrust and other competition laws in the United States and in the other countries in
which we operate. We cannot predict how these laws or their interpretation, administration and enforcement will
impact us. Throughout 2010, the dairy industry was the subject of increased government scrutiny. In 2010, the
current administration initiated a review of existing dairy policies in order to consider potential changes to those
policies. This review process may result in changes to the dairy industry that we cannot anticipate and that may
have a material adverse impact on our business.

Litigation or Legal Proceedings Could Expose Us to Significant Liabilities and Have a Negative Impact

on Our Reputation.

We are party to various litigation claims and legal proceedings. We evaluate these litigation claims and legal
proceedings to assess the likelihood of unfavorable outcomes and to estimate, if possible, the amount of potential
losses. Based on these assessments and estimates, we establish reserves and/or disclose the relevant litigation
claims or legal proceedings, as appropriate. These assessments and estimates are based on the information
available to management at the time and involve a significant amount of management judgment. Actual
outcomes or losses may differ materially from our current assessments and estimates.

Labor Disputes Could Adversely Affect Us.

As of December 31, 2010, approximately 37% of Fresh Dairy Direct-Morningstar’s and 27% of
WhiteWave-Alpro’s employees participated in collective bargaining agreements. At any given time, we may face
a number of union organizing drives. When we face union organizing drives, we and the union may disagree on
important issues which, in turn, could possibly lead to a strike, work slowdown or other job actions at one or
more of our locations. A strike, work slowdown or other labor unrest could in some cases impair our ability to
supply our products to customers, which could result in reduced revenue and customer claims.

Our Business is Subject to Various Environmental Laws, Which May Increase Our Compliance Costs.

Our business operations are subject to numerous environmental and other air pollution control laws,
including the federal Clean Air Act, the federal Clean Water Act, and the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, as well as state and local statutes. These laws
and regulations cover the discharge of pollutants, wastewater, and hazardous materials into the environment. In
addition, various laws and regulations addressing climate change are being considered or implemented at the
federal and state levels. New legislation, as well as current federal and other state regulatory initiatives relating to
these environmental matters, could require us to replace equipment, install additional pollution controls, purchase
various emission allowances or curtail operations. These costs could adversely affect our results of operations
and financial condition.

Changes in Laws, Regulations and Accounting Standards, Including Those of Non-US Jurisdictions,

Could Have an Adverse Effect on Our Financial Results.

We are subject to federal, state, local and foreign governmental laws and regulations, including those
promulgated by the United States Food and Drug Administration, the United States Department of Agriculture,
the Sarbanes-Oxley Act of 2002 and numerous related regulations promulgated by the Securities and Exchange
Commission and the Financial Accounting Standards Board. Changes in federal, state or local laws, or the
interpretations of such laws and regulations, may negatively impact our financial results or our ability to market
our products. In addition, we have operations outside of the United States which may present unique challenges
and increase our exposure to the risks associated with foreign operations, including foreign currency risks and
compliance with foreign rules and regulations. Any or all of these risks could adversely impact our financial
results.

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Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

Our corporate headquarters are located in leased premises at 2711 North Haskell Avenue, Suite 3400,
Dallas, TX 75204. In addition, we operate more than 100 manufacturing facilities. Management believes that
Dean Foods’ facilities are well maintained and are generally suitable and of sufficient capacity to support our
current business operations and that the loss of any single facility would not have a material adverse effect on our
operations or financial results. The following tables set forth, by business segment, our principal manufacturing
facilities.

Fresh Dairy Direct-Morningstar

Fresh Dairy Direct-Morningstar currently conducts its manufacturing operations within the following 95

facilities, most of which are owned:

Homewood, Alabama(2)
Decatur, Alabama
Buena Park, California
City of Industry, California(2)
Fullerton, California
Gustine, California
Hayward, California
Riverside, California
Tulare, California
Delta, Colorado
Denver, Colorado
Englewood, Colorado
Greeley, Colorado
Newington, Connecticut
Deland, Florida
Miami, Florida
Orlando, Florida
Baxley, Georgia
Braselton, Georgia
Hilo, Hawaii
Honolulu, Hawaii
Boise, Idaho
Belvidere, Illinois
Harvard, Illinois
Huntley, Illinois
O’Fallon, Illinois
Rockford, Illinois
Decatur, Indiana
Huntington, Indiana
Rochester, Indiana

LeMars, Iowa
Louisville, Kentucky
Murray, Kentucky
Newport, Kentucky(2)
New Orleans, Louisiana
Shreveport, Louisiana
Bangor, Maine
Frederick, Maryland
Franklin, Massachusetts
Lynn, Massachusetts
Mendon, Massachusetts
Evart, Michigan
Grand Rapids, Michigan
Livonia, Michigan
Marquette, Michigan
Thief River Falls, Minnesota
White Bear Lake, Minnesota
Woodbury, Minnesota
Billings, Montana
Great Falls, Montana
North Las Vegas, Nevada
Reno, Nevada
Florence, New Jersey
Albuquerque, New Mexico
Delhi, New York
Friendship, New York
Rensselaer, New York
High Point, North Carolina
Winston-Salem, North Carolina
Bismarck, North Dakota

Tulsa, Oklahoma
Marietta, Ohio
Springfield, Ohio
Toledo, Ohio
Erie, Pennsylvania
Lansdale, Pennsylvania
Lebanon, Pennsylvania
Schuylkill Haven, Pennsylvania
Sharpsville, Pennsylvania
Spartanburg, South Carolina
Sioux Falls, South Dakota
Athens, Tennessee
Nashville, Tennessee(2)
Dallas, Texas(2)
El Paso, Texas
Houston, Texas
Lubbock, Texas
McKinney, Texas
San Antonio, Texas
Sulphur Springs, Texas(2)
Waco, Texas
Orem, Utah
Salt Lake City, Utah
Richmond, Virginia
Springfield, Virginia
Ashwaubenon, Wisconsin
Richland Center, Wisconsin
Sheboygan, Wisconsin
Waukesha, Wisconsin

The majority of Fresh Dairy Direct-Morningstar’s manufacturing facilities also serve as distribution
facilities. In addition, Fresh Dairy Direct-Morningstar has numerous distribution branches located across the
country, some of which are owned but most of which are leased. Fresh Dairy Direct-Morningstar’s headquarters
are located within our corporate headquarters.

22

WhiteWave-Alpro

WhiteWave-Alpro currently conducts its manufacturing operations from the following 9 facilities, most of

which are owned:

City of Industry, California
Jacksonville, Florida
Bridgeton, New Jersey

Cedar City, Utah
Mt. Crawford, Virginia
Wevelgem, Belgium

Issenheim, France
Landgraaf, Netherlands
Northamptonshire, United Kingdom

WhiteWave also owns two organic dairy farms located in Paul, Idaho and Kennedyville, Maryland.
WhiteWave’s headquarters and our research and development facility are located in leased premises in
Broomfield, Colorado. Alpro’s headquarters are located in leased premises in Gent, Belgium.

Item 3. Legal Proceedings

We are not party to, nor are our properties the subject of, any material pending legal proceedings, other than

as set forth below:

We were named, among several defendants, in two purported class action antitrust complaints filed on
July 5, 2007. The complaints were filed in the United States District Court for the Middle District of Tennessee,
Columbia Division, and allege generally that we and others in the milk industry worked together to limit the
price Southeastern dairy farmers are paid for their raw milk and to deny these farmers access to fluid Grade A
milk processing facilities (“dairy farmer actions”). A third purported class action antitrust complaint (“retailer
action”) was filed on August 9, 2007 in the United States District Court for the Eastern District of Tennessee,
Greeneville Division. The complaint in the retailer action was amended on March 28, 2008. The amended
complaint alleges generally that we, either acting alone or in conjunction with others in the milk industry,
lessened competition in the Southeastern United States for the sale of processed fluid Grade A milk to retail
outlets and other customers, and that the defendants’ conduct also artificially inflated wholesale prices for direct
milk purchasers. Plaintiffs in both the dairy farmer actions and the retailer action are seeking damages for the
alleged violations. If plaintiffs are successful and we are judged to have violated the antitrust laws, plaintiffs are
entitled to three times the damages caused by the violations found. Four additional purported class action
complaints were filed on August 27, 2007, October 3, 2007, November 15, 2007 and February 13, 2008 in the
United States District Court for the Eastern District of Tennessee, Greeneville Division. The allegations in these
complaints are similar to those in the dairy farmer actions.

On January 7, 2008, a United States Judicial Panel on Multidistrict Litigation transferred all of the pending
cases to the Eastern District of Tennessee, Greeneville Division. On April 1, 2008, the Eastern District Court
ordered the consolidation of the six dairy farmer actions, and ordered the retailer action to be administratively
coordinated with the consolidated dairy farmer actions. A motion to dismiss the dairy farmer actions was denied
on May 20, 2008, and an amended consolidated complaint was filed by the dairy farmer plaintiffs on June 20,
2008. A motion to dismiss the retailer action was denied on July 27, 2009. Motions for class certification were
filed in both actions on May 1, 2009. The motion for class certification in the dairy farmer action was granted on
September 7, 2010. A petition seeking leave to appeal that decision was filed with the Sixth Circuit on
September 21, 2010 and is currently pending. The motion for class certification in the retailer action is still
pending. A motion for summary judgment in the retailer action was granted in part and denied in part on
August 4, 2010. Defendants filed a motion for reconsideration on September 10, 2010, and filed a supplemental
motion for summary judgment as to the remaining claims on September 27, 2010. Those motions are currently
pending before the court. A motion for summary judgment in the dairy farmer action was filed on July 27, 2010
and remains pending. Fact discovery and expert discovery are complete in these matters, and expert reports have
been submitted. Presently, trial in the dairy farmer action is scheduled to begin in June 2011. If the Sixth Circuit
grants the petition to appeal the class certification motion, we expect that the trial will be postponed. We intend
to continue to vigorously defend against these lawsuits.

23

On June 29, 2009, another purported class action lawsuit was filed in the Eastern District of Tennessee,
Greeneville Division, on behalf of indirect purchasers of processed fluid Grade A milk (“indirect purchaser
action”). The allegations in this complaint are similar to those in the retailer action, but primarily involve state
law claims. Because the allegations in this complaint substantially overlap with the allegations in the retailer
action, on September 1, 2009, the Court granted the parties’ joint motion to stay all proceedings in the indirect
purchaser action pending the outcome of the summary judgment motions in the retailer action.

On October 8, 2009, we were named, among several defendants, in a purported class action antitrust
complaint filed in the United States District Court for the District of Vermont. The original complaint was
amended on January 21, 2010, and contained allegations similar in nature to that of the dairy farmer actions
(noted above), and alleges generally that we and others in the milk industry worked together to limit the price
dairy farmers in the Northeastern United States are paid for their raw milk and to deny these farmers access to
fluid Grade A milk processing facilities. A second similar complaint was filed by a different plaintiff on
January 14, 2010. The Company has reached an agreement with the plaintiffs to settle all claims against the
Company in this action. The settlement agreement is subject to court approval, and multiple motions related to
the settlement agreement are currently pending before the court. There can be no assurance that the court will
approve the agreement as proposed by the parties. Pursuant to the agreement the Company would be obligated to
pay $30 million, and would agree to other terms and conditions with respect to its raw milk procurement
activities at certain of its processing plants located in the Northeast.

On January 22, 2010, the United States Department of Justice (“DOJ”) and the States of Wisconsin, Illinois
and Michigan (“Plaintiff States”) filed a civil action in the Eastern District of Wisconsin (“DOJ lawsuit”)
alleging that the Company violated Section 7 of the Clayton Act when it acquired the Consumer Products
Division of Foremost Farms USA on April 1, 2009 (the “acquisition”) for an aggregate purchase price of
approximately $35 million. The DOJ and the Plaintiff States seek a declaration that the acquisition violates
Section 7 of the Clayton Act, divestiture by the Company of all assets and interests it acquired as part of the
acquisition, an order permanently enjoining the Company from further ownership and operation of the assets that
were part of the acquisition, and to compel the Company to provide certain advance notification of future
acquisitions involving school milk or fluid milk processing operations. A motion to partially dismiss the DOJ
lawsuit was denied on April 7, 2010. This matter is currently in the fact discovery stage. The Company intends to
vigorously defend against this action.

On April 28, 2009, a stockholder derivative complaint was filed purportedly on behalf of Dean Foods
Company (the “Company”) in the United States District Court for the Eastern District of Tennessee, Greeneville
division. The complaint names the Company’s then current directors, as well an officer of the Company, and a
former director among the defendants. The complaint alleges that the officers and directors breached their
fiduciary duties to the Company under Delaware law by approving the 2001 merger between the former Dean
Foods Company and Suiza Foods Corporation, and allegedly participating in, or failing to prevent, a purported
conspiracy to fix the price of Grade A milk. The complaint also names others in the milk industry as defendants
for allegedly aiding and abetting the officers’ and directors’ breach of their fiduciary duties and names the
Company as a nominal defendant. The plaintiffs are seeking, on behalf of the Company, an undisclosed amount
of damages and equitable relief. On August 7, 2009, the Company and other defendants filed a motion to dismiss
the complaint and a motion to transfer the case to the United States District Court for the Northern District of
Texas. The defendants’ motion to transfer the case was granted on March 31, 2010. On September 14, 2010, the
Court granted the motion to dismiss this matter. The plaintiffs subsequently filed an amended complaint, and the
Company and the other defendants have filed a motion to dismiss the amended complaint. On January 26, 2011,
the Court granted a motion to dismiss the amended complaint and entered a judgment dismissing the case with
predjudice.

On January 18, 2008, our subsidiary, Kohler Mix Specialties, LLC (“Kohler”), was named as a defendant in
a civil complaint filed in the Superior Court, Judicial District of Hartford. The plaintiff in the case is the
Commissioner of Environmental Protection of the State of Connecticut. The complaint alleges generally that

24

Kohler improperly discharged wastewater in to the waters of the State of Connecticut, and bypassed certain
wastewater treatment equipment in violation of certain Connecticut environmental regulations and Kohler’s
wastewater discharge permit. The plaintiff is seeking injunctive relief and civil penalties with respect to the
claims. On December 14, 2009, Kohler filed its answer to the complaint. This matter is currently in the fact
discovery stage.

At this time, it is not possible for us to predict the ultimate outcome of the matters set forth above.

Other than the matters set forth above, we are party from time to time to certain claims, litigations, audits
and investigations. Potential liabilities associated with the other matters referred to in this paragraph are not
expected to have a material adverse impact on our financial position, results of operations or cash flows.

Other — We are in discussions with numerous states, most but not all of whom have appointed an agent to
conduct an examination of our books and records to determine whether we have complied with state unclaimed
property laws. In addition to seeking remittance of unclaimed property, some states may also seek interest and
penalties. At this time, it is not possible for us to predict the ultimate outcome of these potential examinations.

25

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of

Equity Securities.

Our common stock trades on the New York Stock Exchange under the symbol “DF.” The following table
sets forth the high and low closing sales prices of our common stock as quoted on the New York Stock Exchange
for the last two fiscal years. At February 18, 2011, there were 4,241 record holders of our common stock.

2009:

First Quarter
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Second Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Third Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fourth Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2010:

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
First Quarter
Second Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Third Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fourth Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

High

Low

$21.13
20.70
21.92
19.65

18.53
16.89
12.00
10.80

$17.83
17.61
17.60
15.90

14.46
9.57
9.49
7.26

We have not historically declared or paid a regular cash dividend on our common stock. We have no current

plans to pay a cash dividend in the future.

See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations —
Liquidity and Capital Resources — Current Debt Obligations” and Note 9 to our Consolidated Financial
Statements for further information regarding the terms of our senior secured credit facility, including terms
restricting the payment of dividends.

Stock Repurchases — Since 1998, our Board of Directors has from time to time authorized the repurchase
of our common stock up to an aggregate of $2.3 billion, excluding fees and expenses. We made no share
repurchases in 2010 or 2009 and do not intend to make any repurchases for the foreseeable future. As of
December 31, 2010, $218.7 million was available for repurchases under this program (excluding fees and
commissions). Shares, when repurchased, are retired.

26

Item 6. Selected Financial Data

The following selected financial data as of and for each of the five years in the period ended December 31,
2010 has been derived from our audited Consolidated Financial Statements. The selected financial data do not
purport to indicate results of operations as of any future date or for any future period. The selected financial data
should be read in conjunction with our Consolidated Financial Statements and related Notes.

Operating data:

Year Ended December 31

2010

2009

2008

2007

2006

(Dollars in thousands except share data)

Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 12,122,887 $ 11,113,782 $ 12,361,311 $ 11,731,870 $ 10,011,018
7,290,290
Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9,116,965

9,438,593

9,015,216

8,008,561

Gross profit(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating costs and expenses:

Selling and distribution . . . . . . . . . . . . . . . . . . . .
General and administrative . . . . . . . . . . . . . . . . .
Amortization of intangibles . . . . . . . . . . . . . . . . .
Facility closing and reorganization costs . . . . . . .
Other expense(2) . . . . . . . . . . . . . . . . . . . . . . . . .

Total operating costs and expenses . . . . . . . . .

Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other (income) expense:

Interest expense(3)(6) . . . . . . . . . . . . . . . . . . . . . . .
Other (income) expense, net(8) . . . . . . . . . . . . . . . .

Total other expense . . . . . . . . . . . . . . . . . . . . .

Income from continuing operations before income

taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Income from continuing operations . . . . . . . . . . . . . . .
Gain (loss) on sale of discontinued operations, net of

tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Income (loss) from discontinued operations, net of

tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . .
Net loss attributable to non-controlling interest

Net income attributable to Dean Foods

3,005,922

3,105,221

2,922,718

2,716,654

2,720,728

1,904,526
629,656
11,295
30,761
30,000

2,606,238

399,684

248,301
161

248,462

151,222
73,482

77,740

7,521

(2,505)

82,756
8,735

1,818,833
623,835
9,637
30,162
—

2,482,467

622,754

246,510
(4,221)

242,289

380,465
151,845

228,620

89

(862)

227,847
12,461

1,802,214
482,392
9,836
22,758
—

2,317,200

605,518

308,178
1,123

309,301

296,217
114,330

181,887

1,708,594
415,694
6,744
34,421
1,688

2,167,141

549,513

333,328
5,956

339,284

210,229
82,862

127,367

1,636,825
405,985
5,983
25,116
—

2,073,909

646,819

194,630
429

195,059

451,760
174,376

277,384

(1,275)

608

(1,978)

3,158

183,770

3,378

131,353
—

(49,992)

225,414
—

Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

91,491 $

240,308 $

183,770 $

131,353 $

225,414

Cash dividend paid per share . . . . . . . . . . . . . . . . . . . . $

— $

— $

— $

15.00 $

—

Basic earnings per common share:

Net income attributable to Dean Foods

Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

0.50 $

1.41 $

1.23 $

1.01 $

1.68

Diluted earnings per common share:

Net income attributable to Dean Foods

Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

0.50 $

1.38 $

1.20 $

0.96 $

1.61

Average common shares:

Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

181,799,306

170,986,886

149,266,519

130,310,811

133,938,777

Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

182,861,802

173,858,303

153,395,746

137,291,998

139,762,104

Other data:

Ratio of earnings to fixed charges(4)

. . . . . . . . . . .

1.50x

2.26x

1.81x

1.55x

2.85x

Balance sheet data (at end of period):

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Long-term debt(5)(6) . . . . . . . . . . . . . . . . . . . . . . . .
Other long-term liabilities . . . . . . . . . . . . . . . . . . . .
Non-controlling interest . . . . . . . . . . . . . . . . . . . . . .
Dean Foods Company stockholders’

7,956,667 $
4,067,525
351,645
14,543

7,843,941 $
4,228,979
393,575
15,286

7,040,192 $
4,489,251
411,991
—

7,033,356 $
5,272,351
320,181
—

6,770,173
3,355,851
238,682
—

equity(6)(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,499,525

1,351,946

558,234

51,267

1,809,399

27

(1) As disclosed in Note 1 to our Consolidated Financial Statements, we include certain shipping and handling
costs within selling and distribution expense. As a result, our gross profit may not be comparable to other
entities that present all shipping and handling costs as a component of cost of sales.

(2) Results for 2010 include a charge of $30.0 million related to a class action antitrust complaint settlement
(see “Part I — Item 3. Legal Proceedings” for more information regarding this charge) and 2007 includes a
loss of $1.7 million relating to the sale of our tofu business.

(3) Results for 2010 include charges totaling $12.3 million in financing costs associated with the amendments
of our senior secured credit facility on June 30, 2010 and December 9, 2010. Additionally, results for 2007
include a charge of $13.5 million to write-off financing costs related to the refinancing of our senior secured
credit facility.

(4) For purposes of calculating the ratio of earnings to fixed charges, “earnings” represents income before
income taxes plus fixed charges. “Fixed charges” consist of interest on all debt, amortization of deferred
financing costs and the portion of rental expense that we believe is representative of the interest component
of rent expense.
Includes the current portion of long-term debt.
In May 2009, we issued and sold 25.4 million shares of our common stock in a public offering. We received
net proceeds of $444.7 million from the offering. The net proceeds from the offering were used to repay the
$122.8 million aggregate principal amount of our subsidiary’s 6.625% senior notes due May 15, 2009, and
indebtedness under our receivables-backed facility.

(5)
(6)

On March 5, 2008, we issued and sold 18.7 million shares of our common stock in a public offering. We
received net proceeds of approximately $400 million from the offering which were used to reduce debt
outstanding under the revolving portion of our senior secured credit facility.

On April 2, 2007, we recapitalized our balance sheet with the completion of a new $4.8 billion senior
secured credit facility and the return of $1.94 billion to shareholders of record as of March 27, 2007, through
a $15 per share special cash dividend.

(7) Effective January 1, 2007, we adopted Financial Accounting Standards related to “Accounting for
Uncertainty in Income Taxes”. As a result, we recognized a $25.9 million increase in our liability for
uncertain tax positions, a $20.1 million increase in deferred income tax assets, a $0.3 million decrease to
additional paid-in capital, a $0.2 million decrease to goodwill and a $5.7 million decrease to retained
earnings.

The balance at December 31, 2006 reflects a $14.8 million reduction related to the adoption of Financial
Accounting Standards related to “Employers’ Accounting for Defined Benefit Pension and Other
Postretirement Plans — an Amendment of FASB Statements No. 87, 88, 106, and 132(R)”. The reduction
had no impact on net income.

(8) Results for 2009 include a gain of $4.2 million related to a Euro-based forward currency contract related to
the Alpro acquisition. Results for 2007 include charges of $4.5 million for professional fees and other costs
related to the second quarter special cash dividend.

28

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Business Overview

We are one of the leading food and beverage companies in the United States. Fresh Dairy Direct-
Morningstar is the largest processor and distributor of milk and other dairy products in the country, with products
sold under more than 50 familiar local and regional brands and a wide array of private labels. WhiteWave-Alpro
markets and sells a variety of nationally branded dairy and dairy-related products, such as Horizon Organic milk
and other dairy products, The Organic Cow organic dairy products, as well as other plant-based beverages and
soy food products, International Delight coffee creamers and LAND O LAKES creamers and fluid dairy products,
and Silk plant-based beverages such as soy, almond and coconut milks and cultured soy products. WhiteWave-
Alpro also offers branded soy-based beverages and food products in Europe and markets its products under the
Alpro and Provamel brands. Additionally, with our Hero/WhiteWave joint venture we have expanded the
WhiteWave product footprint beyond the dairy case to capitalize on the chilled fruit-based beverage opportunity
with the introduction of Fruit2Day.

Our Reportable Segments

We have two reportable segments, Fresh Dairy Direct-Morningstar and WhiteWave-Alpro.

In the first quarter of 2010, our Chief Executive Officer, who is our chief operating decision maker, changed
the way he evaluates the performance of our operations, develops strategy and allocates capital resources. As a
result, beginning in the first quarter of 2010, our Morningstar operations were aligned with our Fresh Dairy
Direct operations, so that our two reporting segments consisted of Fresh Dairy Direct-Morningstar and
WhiteWave-Alpro. This change reflects the divergence between the strategies and objectives of these two
segments. Our value-added branded operations at WhiteWave-Alpro added scale with the acquisition of Alpro in
July 2009 and are focused on driving growth through effective marketing and innovation. Our traditional dairy
operations at Fresh Dairy Direct-Morningstar are driven by a focus on cost and service leadership. We believe
these revised segments have increased internal focus and offered management and investors improved visibility
into the performance of the segments against their specific objectives. All segment results set forth herein have
been recast to present results on a comparable basis. These changes had no impact on consolidated net sales or
operating income.

During the second quarter of 2010, we committed to a plan to sell the business operations of Rachel’s,
which provides organic branded dairy-based chilled yogurt, milk and related dairy products primarily in the
United Kingdom. The sale of these operations was completed on August 4, 2010. The decision to sell these
operations was part of our strategic growth plan and allows us to target our investments in growing our core dairy
and branded businesses by divesting non-core operations. All Rachel’s operations, previously reported within the
WhiteWave-Alpro segment, have been reclassified as discontinued operations. See Note 2 to our Consolidated
Financial Statements. Unless stated otherwise, any reference to income statement items in these financial
statements refers to results from continuing operations.

In the fourth quarter of 2010, we entered into two separate agreements to sell our Mountain High and private
label yogurt operations, which are part of our Fresh Dairy Direct-Morningstar segment. We expect to recognize a
gain related to the sale of both of these operations. On February 1, 2011, we completed the sale of our Mountain
High yogurt operations. We expect our private label operations sale to close in the first half of 2011. These
operations did not meet the requirements to be accounted for as discontinued operations.

Fresh Dairy Direct-Morningstar — Fresh Dairy Direct-Morningstar

largest segment, with
approximately 84% of our consolidated net sales in 2010. Fresh Dairy Direct-Morningstar manufactures, markets
and distributes a wide variety of branded and private label dairy case products, including milk, ice cream,
cultured dairy products, creamers, ice cream mix and other dairy products, to retailers, distributors, foodservice
outlets, educational institutions and governmental entities across the United States. Due to the perishable nature

is our

29

of its products, Fresh Dairy Direct-Morningstar delivers the majority of its products directly to its customers’
locations in refrigerated trucks or trailers that we own or lease. We believe that Fresh Dairy Direct-Morningstar
has one of the most extensive refrigerated DSD systems in the United States. Fresh Dairy Direct-Morningstar
sells its products primarily on a local or regional basis through its local and regional sales forces, although some
national customer relationships are coordinated by a centralized corporate sales department.

The dairy industry is a mature industry that has traditionally been characterized by slow to flat growth, low
profit margins fragmentation and lack of network optimization. According to the USDA, per capita consumption
of fluid milk continues to decline. Volume sales growth across the industry has declined recently. The continued
recessionary environment has resulted in a significant segment of consumers who are cutting back on purchases
of even the most essential items, which has had a pronounced impact on the fluid milk category. We have
experienced a reduction in volumes in the industry and in our Fresh Dairy Direct-Morningstar business. We
expect this trend to continue in the near term.

As a result of the intensely competitive dairy environment, we have been subject to a number of competitive
bidding situations in Fresh Dairy Direct-Morningstar, which has reduced our profitability on sales to several
customers. In bidding situations, we are subject to the risk of losing certain customers altogether. In addition,
supermarkets and food retailers have utilized competitive pricing on dairy products to drive traffic volume and
influence customer loyalty, which has significantly reduced their profit margins realized on the sale of such
products. This margin compression is being absorbed by both retailers and dairy processors. These industry
dynamics have driven private label market share gains over branded products, which is impacting the growth and
profitability of our regionally branded products. With unusually low pricing on private label gallons, our
regionally branded products are exposed to significantly wider retail price gaps versus private label. Although we
expect these trends to continue, we began to see price stabilization over the latter part of 2010.

In addition to these industry dynamics, we have faced challenges with our conventional milk costs as well.
Conventional milk prices continued to increase throughout 2010 compared to historic lows in 2009. We expect
the Class I and Class II price to increase fairly dramatically through mid-second quarter of 2011 and level off in
the back half of the year. This significant increase in conventional milk prices is a result of limited supply due to
production challenges coupled with strong global demand for both Class I and Class II inputs.

In response to this dynamic and significant competitive pressure, many processors, including us, are now
placing an increased emphasis on cost reduction in an effort to increase margins. We made significant progress
against such initiatives in 2009 and 2010 and intend to continue these efforts over the next three to five years.
Defined strategies for network optimization and organizational changes are in process to improve performance
and programs have been launched to reduce our total selling, general, and administrative costs. We remain
focused on sustaining positive cash flow, net debt reduction and are reinvesting for the future in spite of the
current challenging environment.

Fresh Dairy Direct-Morningstar has several competitors in each of our major product and geographic
markets. Competition between dairy processors for shelf-space with retailers is based primarily on price, service,
quality and the expected or historical sales performance of the product compared to its competitors. In some
cases Fresh Dairy Direct-Morningstar pays fees to customers for shelf-space. Competition for consumer sales is
based on a variety of factors such as brand recognition, price, taste preference and quality. Dairy products also
compete with many other beverages and nutritional products for consumer sales.

WhiteWave-Alpro — WhiteWave-Alpro’s net sales were approximately 16% of our consolidated net sales in
2010. WhiteWave-Alpro manufactures, develops, markets and sells a variety of nationally branded dairy and
dairy-related products, such as Horizon Organic milk and other dairy products, The Organic Cow organic dairy
milk, International Delight coffee creamers and LAND O LAKES creamers and fluid dairy products, and Silk
plant based beverages including soy, almond and coconut milks and cultured soy products. WhiteWave-Alpro
also offers branded soy-based beverages and food products in Europe and markets its products under the Alpro
and

30

Provamel brands. Additionally, with our Hero/WhiteWave joint venture we have expanded the WhiteWave
product footprint beyond the dairy case to capitalize on the chilled fruit-based beverage opportunity with the
introduction of Fruit2Day. WhiteWave-Alpro sells its products to a variety of customers, including grocery
stores, club stores, natural food stores, mass merchandisers, convenience stores, drug stores and foodservice
outlets. WhiteWave-Alpro sells its products primarily through its internal sales force and independent brokers.
The majority of the WhiteWave-Alpro products are delivered through warehouse delivery systems.

WhiteWave-Alpro has several competitors in each of its product markets. Competition to obtain shelf-space
with retailers for a particular product is based primarily on brand recognition and the expected or historical sales
performance of the product compared to its competitors. In some cases, WhiteWave-Alpro pays fees to retailers
to obtain shelf-space for a particular product. Competition for consumer sales is based on many factors, including
brand recognition, price, taste preferences and quality. Consumer demand for soy, other plant-based and organic
beverages and foods has grown in recent years due to growing consumer confidence in the health benefits
attributable to these products, and we believe WhiteWave-Alpro has a leading position in the these category.

Recent Developments

See “Part I — Item 1. Business — Developments Since January 1, 2010” for recent developments that have

impacted our financial condition and results of operations.

Results of Operations

The following table presents certain information concerning our financial results, including information

presented as a percentage of net sales.

Year Ended December 31

2010

2009

2008

Dollars

Percent

Dollars

Percent

Dollars

Percent

(Dollars in millions)

Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$12,122.9
9,117.0

100.0% $11,113.8
8,008.6
75.2

100.0% $12,361.3
9,438.6
72.1

100.0%
76.4

Gross profit(1) . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating costs and expenses:

3,005.9

24.8

3,105.2

27.9

2,922.7

23.6

Selling and distribution . . . . . . . . . . . . . . . .
General and administrative . . . . . . . . . . . . .
Amortization of intangibles . . . . . . . . . . . . .
Facility closing and reorganization costs . . .
Other expense . . . . . . . . . . . . . . . . . . . . . . .

Total operating costs and expenses . . .

1,904.5
629.6
11.3
30.8
30.0

2,606.2

15.7
5.2
0.1
0.3
0.2

21.5

1,818.8
623.8
9.6
30.2
—

2,482.4

16.4
5.6
0.1
0.3
—

22.4

1,802.2
482.4
9.8
22.8
—

2,317.2

14.6
3.9
0.1
0.2
—

18.8

Operating income . . . . . . . . . . . . . . . . . . . . . . . . .

$

399.7

3.3% $

622.8

5.5% $

605.5

4.8%

(1) As disclosed in Note 1 to our Consolidated Financial Statements, we include certain shipping and handling
costs within selling and distribution expense. As a result, our gross profit may not be comparable to other
entities that present all shipping and handling costs as a component of cost of sales.

31

Year Ended December 31, 2010 Compared to Year Ended December 31, 2009 — Consolidated Results

Net Sales — Net sales by segment are shown in the table below.

Net Sales

2010

2009

$
Increase/
(Decrease)

%
Increase/
(Decrease)

(Dollars in millions)

Fresh Dairy Direct-Morningstar . . . . . . . . . . . . . . . . . . . . . . . . . .
WhiteWave-Alpro . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$10,184.9
1,938.0

$ 9,480.8
1,633.0

$ 704.1
305.0

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$12,122.9

$11,113.8

$1,009.1

7.4%

18.7

9.1

The change in net sales was due to the following:

Fresh Dairy Direct-Morningstar
. . . . . . . . . . . . . . . . . . . . . . . . .
WhiteWave-Alpro . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Change in Net Sales 2010 vs. 2009

Acquisitions

Volume

Pricing
and Product
Mix Changes

Total
Increase/
(Decrease)

$157.7
172.7

$330.4

(Dollars in millions)
$912.1
25.4

$(365.7)
106.9

$(258.8)

$937.5

$ 704.1
305.0

$1,009.1

Net sales — Consolidated net sales increased $1.0 billion during 2010 compared to 2009 primarily due to
the pass-through of higher commodity costs, acquisitions and an increase in sales volumes of our branded
products, particularly International Delight, Horizon Organic and Silk. These increases were partially offset by
highly promotional retail pricing and wholesale pricing pressures, as well as lower sales volumes across all
categories in our Fresh Dairy Direct-Morningstar segment.

Cost of Sales — All expenses incurred to bring a product to completion are included in cost of sales, such as
raw material, ingredient and packaging costs; labor costs; and plant and equipment costs. Cost of sales increased
$1.1 billion, or 13.8%, in 2010 as compared to the prior year, primarily due to higher commodity prices,
particularly raw milk and Class II butterfat costs, offset by lower overall volumes in Fresh Dairy Direct-
Morningstar. Conventional milk prices were at historically low levels for most of 2009, with a fairly sharp
increase in the fourth quarter of 2009 that continued throughout 2010. We expect the Class I and Class II price to
increase fairly dramatically through mid-second quarter of 2011 and level off in the back half of the year. This
significant increase in conventional milk prices is a result of limited supply due to production challenges coupled
with strong global demand for both Class I and Class II inputs.

Operating Costs and Expenses — Our operating expenses increased $123.8 million, or 5.0%, during the

year compared to prior year. Significant changes to operating costs and expenses include the following:

•

•

Selling and distribution costs increased $85.7 million driven by the impact of acquisitions, including
$36.0 million related to Alpro, higher freight and fuel costs. In addition, WhiteWave experienced
increased outside storage facility costs and related distribution costs due to capacity constraints. We
expect such outside storage costs to decrease in 2011 as we realize additional capacity as a result of our
capital expenditures at WhiteWave. These increases were partly offset by a decrease in our self-
insurance reserve due to changes in loss development factors as a result of a continuous decline in
claims and better claims management. We expect 2011 expenses related to self-insurance to increase
next year.

General and administrative costs increased $5.8 million primarily driven by the impact of acquisitions,
including $24.5 million for Alpro, and higher consulting fees, offset by lower employee-related costs,
largely due to decreased short term incentive compensation. We expect 2011 expenses related to short
term incentive compensation to increase next year.

32

•

•

Net facility closing and reorganization costs increased $0.6 million. See Note 16 to our Consolidated
Financial Statements for further information on our facility closing and reorganization activities.

Other expense represents a $30.0 million charge related to a pending class action antitrust settlement
(see “Part I — Item 3. Legal Proceedings” for more information regarding this charge).

Other (Income) Expense — Excluding $12.3 million in financing costs associated with the amendments of
our senior secured credit facility on June 30, 2010 and December 9, 2010,
interest expense decreased
$10.5 million from the prior year, primarily due to lower average debt balances, lower interest rates during the
first six months of 2010 and the expiration of $800 million notional amounts of fixed interest rate swap
agreements in the first quarter of 2010. In 2009 we recorded a $4.2 million gain related to a Euro-based forward
currency contract related to the Alpro acquisition.

We expect to see an increase in interest expense in 2011 as a result of higher average interest rates, due to
the June 30, 2010 credit facility amendment and the December 16, 2010 senior notes issuance. This higher
interest expense will be slightly offset by expected lower average debt balances resulting from free cash flow
generation and the net proceeds from the sale of our Mountain High and private label yogurt businesses, as well
as the expiration of certain of our fixed interest rate swap agreements. The sale of our Mountain High business
closed February 1, 2011, and we expect to close the sale of our private label yogurt business in the first half of
2011.

Income Taxes — Income tax expense was recorded at an effective rate of 48.6% for 2010 compared to
39.9% in 2009. Our effective tax rate varies primarily based on the relative earnings of our business units.
Additionally, in 2010, we identified unrecoverable deferred tax asset balances associated with errors primarily
related to periods prior to 2007. Since the effects of the errors are not material to the financial results for the year
ending December 31, 2010 and were not material to any individual year prior to 2010, we adjusted our deferred
tax assets and recorded a non-cash income tax charge of $10.8 million in the fourth quarter of 2010. Excluding
the impact of this correction, the effective tax rate for 2010 was 41.4%, which was higher than 2009 primarily as
a result of lower net earnings. Our 2010 and 2009 effective tax rates were both negatively impacted by the
exclusion of the tax benefit attributable to our non-controlling interest in the Hero/WhiteWave joint venture.

Year Ended December 31, 2010 Compared to Year Ended December 31, 2009 — Results by Segment

Fresh Dairy Direct-Morningstar

The key performance indicators of Fresh Dairy Direct-Morningstar are sales volumes, gross profit and

operating income.

Year Ended December 31

2010

2009

Dollars

Percent

Dollars

Percent

Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$10,184.9
7,873.3

(Dollars in millions)
100.0% $9,480.8
6,961.4
77.3

Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating costs and expenses . . . . . . . . . . . . . . . . . . . . . .

2,311.6
1,807.1

22.7
17.7

2,519.4
1,762.7

100.0%
73.4

26.6
18.6

Total operating income . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

504.5

5.0% $ 756.7

8.0%

Net Sales — Fresh Dairy Direct-Morningstar’s net sales increased $704.1 million, or 7.4%, during 2010
compared to the prior year, primarily due to the pass-through of higher commodity costs and the impact of
acquisitions. These increases were partially offset by the impact of highly promotional retail pricing and
wholesale pricing pressures, as well as overall volume declines across all product categories. Changing consumer
behavior with increased pricing sensitivity and focus on value in the challenging domestic economy has driven
material shifts across the retail grocery industry. Retailers began lowering their margins on milk to hit key price

33

points and demonstrate strong value to customers in an effort to keep or win market share in the challenging
environment. Beginning in 2009 and throughout 2010, we experienced an increasing demand to absorb pricing
concessions, which were originally absorbed by retailers. Although we expect these trends to continue, we began
to see price stabilization over the latter part of 2010.

Fresh Dairy Direct-Morningstar generally increases or decreases the prices of its fluid dairy products on a
monthly basis in correlation to fluctuations in the costs of raw materials, packaging supplies and delivery costs.
However, in some cases, we are competitively or contractually constrained with respect to the means and/or
timing of price increases. This can have a negative impact on Fresh Dairy Direct-Morningstar’s profitability. The
following table sets forth the average monthly Class I “mover” and its components, as well as the average
monthly Class II minimum prices for raw skim milk and butterfat for 2010 compared to 2009:

Year Ended December 31*

2010

2009

% Change

Class I mover(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Class I raw skim milk mover(1)(2) . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . .
Class I butterfat mover(2)(3)
Class II raw skim milk minimum(1)(4) . . . . . . . . . . . . . . . .
Class II butterfat minimum(3)(4) . . . . . . . . . . . . . . . . . . . . .

$15.35
9.26
1.83
9.85
1.86

$11.48
7.40
1.24
7.09
1.26

33.7%
25.1
47.6
38.9
47.6

*

The prices noted in this table are not the prices that we actually pay. The federal order minimum prices
applicable at any given location for Class I raw skim milk or Class I butterfat are based on the Class I mover
prices plus a location differential. Class II prices noted in the table are federal minimum prices, applicable at
all locations. Our actual cost also includes producer premiums, procurement costs and other related charges
that vary by location and supplier. Please see “Part I — Item 1. Business — Government Regulation —
Milk Industry Regulation” and “— Known Trends and Uncertainties — Prices of Raw Milk and Other
Inputs” below for a more complete description of raw milk pricing.

(1) Prices are per hundredweight.
(2) We process Class I raw skim milk and butterfat into fluid milk products.
(3) Prices are per pound.
(4) We process Class II raw skim milk and butterfat into products such as cottage cheese, creams and creamers,

ice cream and sour cream.

Cost of Sales — All expenses incurred to bring a product to completion are included in cost of sales, such as
raw material, ingredient and packaging costs; labor costs; and plant and equipment costs. Fresh Dairy Direct-
Morningstar’s cost of sales increased $911.9 million, or 13.1%, in 2010 compared to 2009 primarily due to
higher commodity prices experienced throughout the year, particularly raw milk and Class II butterfat costs,
slightly offset by lower personnel costs.

Conventional milk prices continued to increase throughout 2010 compared to historic lows in 2009. We
expect the Class I and Class II price to increase fairly dramatically through mid-second quarter of 2011 and level
off in the back half of the year. This significant increase in conventional milk prices is a result of limited supply
due to production challenges coupled with strong global demand for both Class I and Class II inputs.

Gross Profit — Fresh Dairy Direct-Morningstar’s gross margin decreased to 22.7% in 2010 from 26.6% in
2009. Gross margins trended downward due to the increasingly intense competitive environment we have
experienced. In addition to the increasing demands to absorb pricing concessions, we experienced a continued
shift from branded to private label products, exacerbated by weak volumes across dairy and non-dairy product
offerings, further impacting profitability. Although we began to see price stabilization over the latter part of
2010, we expect these trends to continue. These margin pressures underscore the importance of our low cost
strategy. We continue to focus on cost control and supply chain efficiency through cost-cutting initiatives,
improved effectiveness in the pass-through of costs to our customers as well as our continued focus to drive
productivity and efficiency within our operations.

34

Operating Costs and Expenses — Fresh Dairy Direct-Morningstar’s operating costs and expenses increased
$44.4 million, or 2.5%, during the year compared to prior year. Significant changes to operating costs and
expenses include the following:

•

•

Selling and distribution costs increased $28.2 million, primarily driven by increased fuel and freight
costs. These costs were offset by a decrease in our self-insurance reserve due to changes in loss
development factors as a result of a continuous decline in claims and better claims management, as
well as benefits from efficiencies gained in our distribution network with route reductions and lower
fuel usage. We expect 2011 expenses related to self-insurance to increase next year.

General and administrative costs increased $15.2 million due to an increase in supply chain
management and higher consulting fees, offset by lower personnel-related costs, largely due to
decreased short term incentive compensation. We expect 2011 expenses related to short term incentive
compensation to increase next year.

WhiteWave-Alpro

The key performance indicators of WhiteWave-Alpro are sales volumes, net sales dollars, gross profit and

operating income.

Year Ended December 31

2010

2009

Dollars

Percent

Dollars

Percent

Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$1,938.0
1,242.7

(Dollars in millions)
100.0% $1,633.0
1,058.2
64.1

Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating costs and expenses . . . . . . . . . . . . . . . . . . . . . . .

695.3
529.1

35.9
27.3

574.8
444.5

100.0%
64.8

35.2
27.2

Total operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 166.2

8.6% $ 130.3

8.0%

Net Sales — Net sales of the WhiteWave-Alpro segment increased $305.0 million, or 18.7%, driven by the
impact of our Alpro acquisition and strong volume growth in our branded products. Excluding the impact of our
Alpro acquisition, net sales increased $132.3 million, or 8.1%. Sales for the creamers business, which includes
both International Delight and LAND O LAKES, grew low double digits compared to 2009. Horizon Organic
brand sales also grew low double digits while Silk brand sales grew high single digits compared to the prior year.

Cost of Sales — WhiteWave-Alpro’s cost of sales increased $184.5 million, or 17.4%, in 2010 compared to
the prior year. This increase was primarily driven by a $92.9 million increase due to our Alpro acquisition higher
sales volumes and higher input costs.

Gross Profit — WhiteWave-Alpro’s gross profit increased to 35.9% in 2010 from 35.2% in 2009, driven by
the impact of our Alpro acquisition, strong volume growth, a favorable brand mix, as well as benefits from
productivity initiatives.

Operating Costs and Expenses — WhiteWave-Alpro’s operating costs and expenses increased $84.6 million,
or 19.0%, during 2010 compared to 2009. Significant changes to operating costs and expenses are summarized
below:

•

•

Selling and distribution costs increased $50.1 million, driven by a $36.0 million increase due to the
Alpro acquisition, volume growth and higher fuel costs. In addition, WhiteWave experienced increased
outside storage facility costs due to capacity constraints. We expect such costs to remain at higher
levels as we work to add additional production and storage capacity.

General and administrative costs increased $33.8 million, primarily driven by a $24.5 million increase
due to our Alpro acquisition.

35

Year Ended December 31, 2009 Compared to Year Ended December 31, 2008 — Consolidated Results

Net Sales — Net sales by segment are shown in the table below.

Net Sales

$
Increase/
(Decrease)

%
Increase/
(Decrease)

2009

2008

Fresh Dairy Direct-Morningstar . . . . . . . .
WhiteWave-Alpro . . . . . . . . . . . . . . . . . .

Total . . . . . . . . . . . . . . . . . . . . . . . . .

$

$

9,480.8
1,633.0

11,113.8

$

$

The change in net sales was due to the following:

(Dollars in millions)
10,924.4
1,436.9

$

(1,443.6)
196.1

(13.2)%
13.6

12,361.3

$

(1,247.5)

(10.1)

Change in Net Sales 2009 vs. 2008

Acquisitions

Volume

Pricing
and Product
Mix Changes

Total
Increase/
(Decrease)

(Dollars in millions)

Fresh Dairy Direct-Morningstar . . . . . . . . . . . . . .
WhiteWave-Alpro . . . . . . . . . . . . . . . . . . . . . . . . .

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$159.0
176.4

$335.4

$(61.2)
(31.2)

$(1,541.4)
50.9

$(1,443.6)
196.1

$(92.4)

$(1,490.5)

$(1,247.5)

Net sales decreased $1.2 billion during 2009 compared to 2008 primarily due to lower pricing in our Fresh
Dairy Direct-Morningstar segment, as significantly lower commodity costs were passed through to customers.
Net sales in our WhiteWave-Alpro segment increased as the Alpro acquisition more than offset the impact of the
pass-through of lower commodity costs to customers and slightly lower sales volume, coupled with the exit of
several business relationships.

Cost of Sales — All expenses incurred to bring a product to completion are included in cost of sales, such as
raw material, ingredient and packaging costs; labor costs; and plant and equipment costs. Cost of sales decreased
$1.4 billion, or 15.2%, in 2009 as compared to the prior year, primarily due to continued favorable commodity
prices, particularly raw milk costs, as well as benefits from our strategic initiatives across our manufacturing
network. Overall, commodity prices remained low compared to 2008 levels. Conventional milk prices were at
historically low levels for most of 2009, with a fairly sharp increase in the fourth quarter of the year.

Operating Costs and Expenses — Our operating expenses increased $165.2 million, or 7.1%, during the

year compared to the prior year. Significant changes to operating costs and expenses include the following:

•

•

•

General and administrative costs increased $141.4 million primarily driven by the impact of
acquisitions and investments in the capability build-out of our supply chain, information technology
and research and development functions that are foundational to our strategies; higher personnel-
related costs including incentive-based compensation, share-based compensation expense and
additional headcount; higher professional fees and other outside services primarily related to our
strategic initiatives, as well as higher transaction-related costs.

Selling and distribution costs increased $16.6 million driven by an increase in marketing spend,
especially in the fourth quarter, on our nationally branded products at WhiteWave, higher expenses
attributable to our Hero/WhiteWave joint venture and the impact of our recent Alpro acquisition,
partially offset by lower fuel costs and benefits from our strategic initiatives across our distribution
network.

Net facility closing and reorganization costs increased $7.4 million. See Note 16 to our Consolidated
Financial Statements for further information on our facility closing and reorganization activities.

36

Other (Income) Expense — Interest expense decreased to $246.5 million in 2009 from $308.2 million in
2008, primarily due to lower average debt balances and lower interest rates during 2009 compared to the prior
year. Additionally, in 2009, a $4.2 million gain was recognized related to a Euro-based forward currency contract
related to the Alpro acquisition.

Income Taxes — Income tax expense was recorded at an effective rate of 39.9% for 2009 compared to
38.6% in 2008. Our effective tax rate varies primarily based on the relative earnings of our business units. In
2009, our effective tax rate was negatively impacted by the exclusion of the tax benefit attributable to our
non-controlling interest in the Hero/WhiteWave joint venture. In 2008, our effective tax rate was positively
impacted by the settlement of taxing authority examinations and the effects of state tax law changes.

Year Ended December 31, 2009 Compared to Year Ended December 31, 2008 — Results by Segment

Fresh Dairy Direct-Morningstar

The key performance indicators of Fresh Dairy Direct-Morningstar are sales volumes, gross profit and

operating income.

Year Ended December 31

2009

2008

Dollars

Percent

Dollars

Percent

Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating costs and expenses . . . . . . . . . . . . . . . . . . . . . .

$9,480.8
6,961.4

2,519.4
1,762.7

(Dollars in millions)
100.0% $10,924.4
8,480.7
73.4

26.6
18.6

2,443.7
1,762.7

100.0%
77.6

22.4
16.2

Total operating income . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 756.7

8.0% $

681.0

6.2%

Net Sales — Fresh Dairy Direct-Morningstar’s net sales decreased 13.2% during 2009 compared to the prior
year, primarily due to lower pricing as significantly lower commodity costs were passed through to customers.
Recent acquisitions and solid execution drove higher fluid milk sales volumes of approximately 2.7%, which
were more than offset by lower sales volumes in other products for an overall volume decline of 0.6%.

Fresh Dairy Direct-Morningstar generally increases or decreases the prices of its fluid dairy products on a
monthly basis in correlation to fluctuations in the costs of raw materials, packaging supplies and delivery costs.
However, in some cases, we are competitively or contractually constrained with respect to the means and/or
timing of price increases. This can have a negative impact on Fresh Dairy Direct-Morningstar’s profitability. The
following table sets forth the average monthly Class I “mover” and its components, as well as the average
monthly Class II minimum prices for raw skim milk and butterfat for 2009 compared to 2008:

Year Ended December 31*

2009

2008

% Change

Class I mover(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Class I raw skim milk mover(1)(2) . . . . . . . . . . . . . . . . . . . .
Class I butterfat mover(2)(3)
. . . . . . . . . . . . . . . . . . . . . . . .
Class II raw skim milk minimum(1)(4) . . . . . . . . . . . . . . . .
Class II butterfat minimum(3)(4) . . . . . . . . . . . . . . . . . . . . .

$11.48
7.40
1.24
7.09
1.26

$18.00
12.94
1.57
11.13
1.57

(36.2)%
(42.8)
(21.0)
(36.3)
(19.7)

*

The prices noted in this table are not the prices that we actually pay. The federal order minimum prices
applicable at any given location for Class I raw skim milk or Class I butterfat are based on the Class I mover
prices plus a location differential. Class II prices noted in the table are federal minimum prices, applicable at
all locations. Our actual cost also includes producer premiums, procurement costs and other related charges

37

that vary by location and supplier. Please see “Part I — Item 1. Business — Government Regulation —
Milk Industry Regulation” and “— Known Trends and Uncertainties — Prices of Raw Milk and Other
Inputs” below for a more complete description of raw milk pricing.

(1) Prices are per hundredweight.
(2) We process Class I raw skim milk and butterfat into fluid milk products.
(3) Prices are per pound.
(4) We process Class II raw skim milk and butterfat into products such as cottage cheese, creams and creamers,

ice cream and sour cream.

Cost of Sales — All expenses incurred to bring a product to completion are included in cost of sales, such as
raw material, ingredient and packaging costs; labor costs; and plant and equipment costs. Fresh Dairy Direct-
Morningstar’s cost of sales decreased $1.5 billion, or 17.9%, in 2009 compared to 2008 primarily due to
favorable commodity prices experienced throughout the year, particularly raw milk costs, as well as benefits
from our strategic initiatives across our manufacturing network, slightly offset by higher personnel-related costs.

Gross Profit — Fresh Dairy Direct-Morningstar’s gross margin increased to 26.6% in 2009 from 22.4% in
2008. Despite an overall increase on a year-over-year basis, the gross margin trended downward as 2009
progressed driven by the increasing intense competitive environment we experienced. Changing consumer
behavior with increased pricing sensitivity and focus on value in the challenging domestic economy drove
material shifts across the retail grocery industry. Retailers began lowering their margins on milk to hit key price
points and demonstrate strong value to customers in an effort to keep or win market share in the challenging
environment. Initially, this margin compression was absorbed by retailers, but as the year progressed, we
experienced an increasing demand to absorb pricing concessions. In addition, we experienced a continued shift
from branded to private label products, further impacting profitability. These margin pressures underscore the
importance of our low cost strategy.

Operating Costs and Expenses — Fresh Dairy Direct-Morningstar’s operating costs and expenses were
relatively flat during the year compared to prior year. Distribution costs declined due to relatively lower fuel
costs and strategic initiatives across our distribution network which was offset by higher professional fees
primarily related to strategic initiatives, particularly supply chain and information technology,
increased
advertising expenses as well as higher personnel-related costs.

WhiteWave-Alpro

The key performance indicators of WhiteWave-Alpro are sales volumes, net sales dollars, gross profit and

operating income.

Year Ended December 31

2009

2008

Dollars

Percent

Dollars

Percent

Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$1,633.0
1,058.2

(Dollars in millions)
100.0% $1,436.9
961.1
64.8

Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating costs and expenses . . . . . . . . . . . . . . . . . . . . . . .

574.8
444.5

35.2
27.2

475.8
363.3

100.0%
66.9

33.1
25.3

Total operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 130.3

8.0% $ 112.5

7.8%

Net Sales — Net sales of the WhiteWave-Alpro segment increased $196.1 million, or 13.6%, driven by the
impact of our Alpro acquisition and strong sales growth in our creamers business, partially offset by the impact
of certain businesses exited during 2009.

38

Throughout 2009, we experienced continued softness in the organic milk category. We believe milk
consumers were price sensitive to premium priced categories, including organic products due to the recessionary
environment. We continue to monitor our position in the organic milk category including taking proactive steps
to manage our supply in the short-term and we remain focused on maintaining our leading banded position as we
balance market share considerations against profitability.

Cost of Sales — WhiteWave-Alpro’s cost of sales increased $97.1 million in 2009 compared to the prior
year. This increase was primarily driven by the impact of our Alpro acquisition and continued lower commodity
costs, partially offset by the impact of lower sales volumes, driven by the exited businesses, and the impact of our
productivity initiatives.

Operating Costs and Expenses — WhiteWave-Alpro’s operating costs and expenses increased $81.2 million
during 2009 compared to 2008, driven by the Alpro acquisition and higher marketing spending driven principally
by the launch-year marketing investments related to the Hero/WhiteWave joint venture. These increases were
partially offset by productivity initiatives which impacted distribution costs.

Liquidity and Capital Resources

General

We believe that our cash on hand, coupled with future cash flows from operations and other available
sources of liquidity, including our amended and restated $1.5 billion 5-year senior secured revolving credit
facility and our $600 million receivables-backed facility, which we expect to renew under similar 364-day terms
at the end of the current term, will provide sufficient liquidity to allow us to meet our future cash requirements.
Our anticipated uses of cash include capital expenditures, working capital needs, pension contributions and
financial obligations. On an ongoing basis, we will evaluate and consider strategic acquisitions, divestitures, joint
ventures, repurchasing shares of our common stock, as well as other transactions to create shareholder value and
enhance financial performance. Such transactions may require cash expenditures or generate proceeds.

At December 31, 2010, we had $4.1 billion of outstanding debt obligations, cash-on-hand of $92.0 million
and an additional $1.4 billion of combined available future borrowing capacity under our existing senior secured
revolving credit facility and receivables-backed facility. Of this combined amount, based on our outstanding
indebtedness and the maximum permitted leverage ratio in effect at December 31, 2010, and assuming additional
borrowings were not utilized to acquire incremental EBITDA, $484.1 million was then available to finance
working capital and other general corporate purposes. Based on our current expectations, we believe our liquidity
and capital resources will be sufficient to operate our business. However, we may, from time to time, raise
additional funds through borrowings or public or private sales of debt or equity securities. The amount, nature
and timing of any borrowings or sales of debt or equity securities will depend on our operating performance and
other circumstances, our then-current commitments and obligations; the amount, nature and timing of our capital
requirements; any limitations imposed by our current credit arrangements; and overall market conditions.

39

Historical Cash Flow

The following table summarizes our cash flows from operating, investing and financing activities:

Year Ended December 31

2010

2009
(In thousands)

Change

Net cash flows from:

Operating activities . . . . . . . . . . . . . . . . . . . . .
Investing activities . . . . . . . . . . . . . . . . . . . . . .
Financing activities . . . . . . . . . . . . . . . . . . . . .
Discontinued operations (operating and

$ 525,700
(293,575)
(217,692)

$ 658,079
(840,068)
192,765

$(132,379)
546,493
(410,457)

investing) . . . . . . . . . . . . . . . . . . . . . . . . . . .

32,886

1,950

30,936

Effect of exchange rate changes on cash and

cash equivalents . . . . . . . . . . . . . . . . . . . . . .

(502)

808

(1,310)

Net increase in cash and cash equivalents . . . . . . . .

$ 46,817

$ 13,534

$ 33,283

Operating Activities

Net cash provided by operating activities from continuing operations decreased in 2010 compared to 2009
mainly due to the impact of lower net earnings. In addition, fluctuations in our working capital resulted in an
overall decrease in cash driven by a decrease in the source of cash from accounts receivable, which was partially
offset by a reduction in the use of cash for accounts payable. During 2009, accounts receivable balances declined
significantly due to the pass-through of declining commodity prices. During 2010, accounts receivable balances
remained relatively stable. Additionally, income tax payments were $150.7 million lower in 2010 compared to
2009 due to accelerated tax deductions and lower earnings.

Investing Activities

Net cash used in investing activities decreased in 2010 primarily due to a decrease in cash paid for
acquisitions, which was partially offset by higher payments for capital expenditures. During 2010, no cash was
used for acquisitions compared to $581.2 million used in 2009, primarily for the acquisition of Alpro, as well as
other smaller acquisitions. In 2010, we funded $302.0 million in capital expenditures compared to $267.7 million
in 2009 primarily in connection with the capital investments under our strategy to optimize the fluid milk
production network to increase profitability by reducing costs.

Financing Activities

Net cash used in financing activities increased in 2010 primarily due to debt repayments and deferred
financing costs as a result of costs associated with the amendments of our senior secured credit facility. In 2009
we issued 25.4 million shares of our common stock resulting in net proceeds of $444.7 million.

40

Current Debt Obligations

Senior Secured Credit Facility — Our senior secured credit facility consists of an original combination of a
$1.5 billion 5-year senior secured revolving credit facility, a $1.5 billion 5-year senior secured term loan A and a
$1.8 billion 7-year senior secured term loan B. As described more fully in Note 9 to our Consolidated Financial
Statements, we amended and restated the credit agreement governing our senior secured credit facility on
June 30, 2010 and further amended this agreement on December 9, 2010. The terms of the agreement were
modified in the aggregate as follows:

•

•

•

•

Extension of the maturity dates for certain principal amounts as summarized in the key terms table
below;

Amendment of the maximum permitted leverage ratio and minimum interest coverage ratio, and the
addition of a senior secured leverage ratio (each as defined in our credit agreement) to permit minimum
and maximum ratios of:

For Quarters Ending During the Period

Amendment effective date –

December 31, 2011 . . . . . . . . .

March 31, 2012 – December 31,

2012 . . . . . . . . . . . . . . . . . . . . .

March 31, 2013 – June 30,

2013 . . . . . . . . . . . . . . . . . . . . .

September 30, 2013 and

thereafter

. . . . . . . . . . . . . . . . .

Minimum Interest
Coverage Ratio

Maximum Leverage
Ratio

Maximum Senior
Secured Leverage
Ratio

2.50

2.75

3.00

3.00

5.75

5.50

5.25

4.50

4.25

3.75

3.50

3.50

Amendment of certain other terms, including, but not limited to, leverage-based limitations on the
payment of dividends and other restricted payments, acquisitions and prepayments of senior notes; and

Increase in the undrawn costs of the extended portion of the revolving credit facility and the drawn
costs of the extended portions of the revolving credit facility, term loan A and term loan B.

The following table summarizes the key terms of the senior secured credit facility as of December 31, 2010:

Principal(2)

Maturity
Date

Applicable Base
Rate Margin(3)

Applicable
LIBOR Rate
Margin(3)

Quarterly
Commitment Fee
on Undrawn
Amounts

0.00% – 0.75% 0.625% –1.75% 0.125% –0.375%
Revolving Credit Facility . . . . $225 million April 2, 2012
1.00% – 2.25% 2.00% – 3.25% 0.375% –0.500%
$1.28 billion April 2, 2014
0.00% – 0.75% 0.625% –1.75%
Term Loan A . . . . . . . . . . . . . . $150 million April 2, 2012
1.00% – 2.25% 2.00% – 3.25%
$695 million April 2, 2014
0.375% –0.75% 1.375% –1.75%
Term Loan B . . . . . . . . . . . . . . $687 million April 2, 2014
$490 million April 2, 2016
2.00% – 2.25% 3.00% – 3.25%
$558 million April 2, 2017(1) 2.25% – 2.50% 3.25% – 3.50%

—
—
—
—
—

(1) Subject

to the condition that we meet certain leverage, debt, cash or credit rating tests following
December 31, 2015. However, if at least one of these tests is not met, the maturity date will be April 2,
2016.

(2) Amounts for term loan A and term loan B represent outstanding principal balances as of December 31,
2010. The revolving credit facility principal amount represents the total original borrowings available to us
under the facility.

(3) The senior secured credit facility bears interest, at our election, at the Alternative Base Rate (as defined in
our credit agreement) plus a margin depending on our leverage ratio or LIBOR plus a margin depending on
our leverage ratio. Interest is payable quarterly or after the end of the applicable interest period.

41

Our credit agreement permits us to complete acquisitions that meet all of the following conditions without
obtaining prior approval: (1) the acquired company is involved in the manufacture, processing and distribution of
food or packaging products or any other line of business in which we were engaged as of April 2007, (2) the net
cash purchase price for any single acquisition is not greater than $500 million and not greater than $100 million
if our leverage ratio is greater than 4.50 times, (3) we acquire at least 51% of the acquired entity, (4) the
transaction is approved by the board of directors or shareholders, as appropriate, of the target and (5) after giving
effect to such acquisition on a pro-forma basis, we would have been in compliance with all financial covenants.
All other acquisitions must be approved in advance by the required lenders.

The senior secured credit facility contains limitations on liens, investments and the incurrence of additional
indebtedness, prohibits certain dispositions of property and restricts certain payments, including dividends. There
are no restrictions on these certain payments, including dividends, when our leverage ratio is below 4.50 times.
The senior secured credit facility is secured by liens on substantially all of our domestic assets including the
assets of our subsidiaries, but excluding the capital stock of subsidiaries of the former Dean Foods Company
(“Legacy Dean”), and the real property owned by Legacy Dean and its subsidiaries.

Under the senior secured credit facility, we are required to comply with certain financial covenants,
including, but not limited to, maximum senior secured leverage, maximum leverage and minimum interest
coverage ratios, each as defined under and calculated in accordance with the terms of our senior secured credit
facility and our receivables-backed facility. Our leverage ratio at December 31, 2010 was 5.13 times consolidated
funded indebtedness to consolidated EBITDA for the prior four consecutive quarters. The maximum permitted
leverage ratio of consolidated funded indebtedness to consolidated EBITDA for the prior four consecutive
quarters was 5.75 times as of December 31, 2010 and decreases periodically as summarized in the ratio table
above. As described in more detail in the Amended and Restated Credit Agreement, the leverage ratio is
calculated as the ratio of consolidated funded indebtedness, less restricted subsidiary cash up to $100 million, to
consolidated EBITDA for the period of four consecutive fiscal quarters ended on the measurement date.
Consolidated funded indebtedness is comprised of the outstanding indebtedness of the Company and certain of
its subsidiaries. Consolidated EBITDA is comprised of net income plus interest expense, taxes, depreciation,
amortization expense and other non-cash expenses, and add-backs resulting from acquisition related
non-recurring charges of the Company and certain of its subsidiaries. In addition, the leverage ratio may include
adjustments related to other charges reasonably acceptable to the administrative agent and is calculated on a
pro-forma basis to give effect to any acquisitions, divestitures or relevant changes in the composition of the
Company or certain of its subsidiaries.

Our interest coverage ratio at December 31, 2010 was 3.45 times consolidated EBITDA to consolidated
interest expense for the prior four consecutive quarters. The minimum permitted interest coverage ratio of
consolidated EBITDA to consolidated interest expense for the prior four consecutive quarters was 2.50 times as
of December 31, 2010 and increases periodically as summarized in the ratio table above. This ratio is calculated
as the ratio of consolidated EBITDA to consolidated interest expense for the period of four consecutive fiscal
quarters ended on the measurement date. Consolidated EBITDA is comprised of net income plus interest
expense, taxes, depreciation, amortization expense and other non-cash expenses, and add-backs resulting from
acquisition-related non-recurring charges of the Company and certain of its subsidiaries. Consolidated EBITDA
may include adjustments related to other charges reasonably acceptable to the administrative agent and is
calculated on a pro-forma basis to give effect to any acquisitions, divestitures or relevant changes in the
composition of the Company or certain of its subsidiaries. Consolidated interest expense is comprised of
consolidated interest expense paid or payable in cash, as calculated in accordance with generally accepted
accounting principles, but excluding non-cash losses from foreign exchange translations or swap agreements and
third party fees and expenses related to acquisitions, investments, dispositions and the incurrence or early
extinguishment of indebtedness.

Additionally, the December 9, 2010 amendment of our credit agreement resulted in the addition of a senior
secured leverage ratio, as defined under and calculated in accordance with the terms of our senior secured credit
facility. Our senior secured leverage ratio at December 31, 2010 was 3.80 times consolidated funded senior
secured indebtedness to consolidated EBITDA for the prior four consecutive quarters. The maximum permitted

42

senior secured leverage ratio of consolidated funded senior secured indebtedness to consolidated EBITDA for the
prior four consecutive quarters allowed was 4.25 times as of December 31, 2010 and decreases periodically as
summarized in the leverage ratio table above. This ratio is calculated as the ratio of consolidated funded senior
secured indebtedness, less restricted subsidiary cash up to $100 million, to consolidated EBITDA for the period
of four consecutive fiscal quarters ended on the measurement date. Consolidated funded senior secured
indebtedness is comprised of the outstanding senior secured indebtedness of the Company and certain of its
subsidiaries. Consolidated EBITDA is comprised of net income plus interest expense, taxes, depreciation,
amortization expense and other non-cash expenses, and add-backs resulting from acquisition related
non-recurring charges of the Company and certain of its subsidiaries. In addition, the senior secured leverage
ratio may include adjustments related to other charges reasonably acceptable to the administrative agent and is
calculated on a pro-forma basis to give effect to any acquisitions, divestitures or relevant changes in the
composition of the Company or certain of its subsidiaries.

We are currently in compliance with all financial covenants, and based on our internal projections we expect

to maintain such compliance for the foreseeable future.

The credit agreement contains standard default triggers, including without limitation: failure to maintain
compliance with the financial and other covenants contained in the credit agreement, default on certain of our
other debt, a change in control and certain other material adverse changes in our business. The credit agreement
does not contain any requirements to maintain specific credit rating levels, except as described above with
respect to determining the maturity date of the 2017 tranche of term loan B.

At December 31, 2010, there were outstanding borrowings of $3.0 billion under our senior secured credit
facility (compared to $3.6 billion at December 31, 2009), which consisted of $2.6 billion in term loan borrowings
and $453 million under the revolver. The decrease of $563 million in our senior secured credit facility
outstanding borrowings was primarily due to the prepayment of approximately $384 million in outstanding 2014
Term Loan A borrowings as a result of the Senior Notes Offering discussed in Note 9 to our Consolidated
Financial Statements, quarterly payments on our term loan A and term loan B, and a lower outstanding balance
on our revolver borrowings at December 31, 2010 in comparison to December 31, 2009. At December 31, 2010,
there were $171.3 million of letters of credit under the revolving line that were issued but undrawn. As of
February 24, 2011, $106.2 million was borrowed under our senior secured revolving credit facility.

Receivables-backed Facility — In addition to our senior secured credit facility, we also have a $600 million
364-day receivables-backed facility in which current availability is subject to a monthly borrowing base formula.
This facility is scheduled to mature September 30, 2011, and we intend and expect to renew the facility at the end
of the current term under similar terms currently established.

As of December 31, 2010, the receivables-backed facility had $496.5 million available, of which zero was
drawn. Our average daily balance under this facility during 2010 was $175.3 million. At February 24, 2011,
$339.0 million was outstanding under this facility.

Senior Notes & Capital Leases — Other indebtedness outstanding at December 31, 2010 also included
$500 million face value of outstanding indebtedness under Dean Foods Company’s senior notes due 2016,
$400 million face value of outstanding indebtedness under Dean Foods Company’s senior notes due 2018,
$142 million face value of outstanding indebtedness under Legacy Dean’s senior notes due 2017 and $7.7 million
of capital lease and other obligations.

Alpro Revolving Credit Facility — On July 2, 2009, our newly acquired subsidiary, Alpro N.V. entered into
a two year multi-currency revolving credit facility for borrowings in an amount not to exceed €20 million (or its
currency equivalent). In December, 2009, we reduced the facility to an amount not to exceed €10 million (or its
currency equivalent) and in December 2010, we further reduced the facility to an amount not to exceed
€1 million (or its currency equivalent). The facility is unsecured and is guaranteed by Dean Foods Company and

43

various Alpro N.V. subsidiaries. Use of proceeds under the facility is for working capital and other general
corporate purposes of Alpro N.V. The subsidiary revolving credit facility will be available for the issuance of up
to €1 million of letters of credit. No principal payments are due under the subsidiary revolving credit facility until
maturity on July 2, 2011. At December 31, 2010, there were no outstanding borrowings under the facility.

Contractual Obligations and Other Long-Term Liabilities

In the normal course of business, we enter into contracts and commitments that obligate us to make
payments in the future. The table below summarizes our obligations for indebtedness, purchase, lease and other
contractual obligations at December 31, 2010. See Note 18 to our Consolidated Financial Statements for more
detail about our lease obligations.

Senior secured credit facility . . . . . . . . .
Dean Foods Company senior

notes(1) . . . . . . . . . . . . . . . . . . . . . . .
Subsidiary senior notes(1) . . . . . . . . . . .
Capital lease obligations and other . . . .
Purchase obligations(2) . . . . . . . . . . . . .
Operating leases . . . . . . . . . . . . . . . . . . .
Interest payments(3) . . . . . . . . . . . . . . .
Benefit payments(4)
. . . . . . . . . . . . . . .
Litigation settlement(5) . . . . . . . . . . . . .

Payments Due by Period

Total

2011

2012

2013

2014

2015

Thereafter

$3,033.5

$ 167.5

$290.5

(In millions)
$231.7

$1,337.7

$ 10.5

$ 995.6

900.0
142.0
7.7
1,007.3
502.1
1,032.9
325.1
30.0

—
—
6.7
635.4
123.0
242.1
22.3
30.0

—
—
0.6
175.4
98.2
194.2
21.0
—

—
—
0.4
112.0
78.2
170.9
21.5
—

—
—
—
14.8
62.0
130.2
22.1
—

—
—
—
14.3
46.5
118.5
21.3
—

900.0
142.0
—
55.4
94.2
177.0
216.9
—

Total(6) . . . . . . . . . . . . . . . . . . . . .

$6,980.6

$1,227.0

$779.9

$614.7

$1,566.8

$211.1

$2,581.1

(3)

(1) Represents face value.
(2) Primarily represents commitments to purchase minimum quantities of raw materials used in our production
processes, including diesel fuel, soybeans and organic raw milk. We enter into these contracts from time to
time to ensure a sufficient supply of raw ingredients. In addition, we have contractual obligations to
purchase various services that are part of our production process.
Includes fixed rate interest obligations, expected cash payments on our interest rate swaps based on the
notional amounts of the swaps and the LIBOR forward curve at December 31, 2010 and interest on our
variable rate debt based on the rates and balances in effect at December 31, 2010. Interest that may be due in
the future on the variable rate portion of our senior secured credit facility and receivables-backed facility
will vary based on the interest rate in effect at the time and the borrowings outstanding at the time. Future
interest payments on our interest rate swaps will vary based on the interest rates in effect at each respective
settlement date. Excluded from the table above are expected cash receipts related to the interest rate swaps.

(4) Represents expected future benefit obligations of $307.5 million and $17.6 million related to our pension

plans and postretirement healthcare plans, respectively.

(5) Represents the agreement to settle all claims in a class action antitrust complaint reached in the fourth
quarter of 2010. See Note 18 to our Consolidated Financial Statements for a summary of the agreement.
(6) The table above excludes our liability for uncertain tax positions of $58.2 million because the timing of any

related cash payments cannot be reasonably estimated.

Pension and Other Postretirement Benefit Obligations

We offer pension benefits through various defined benefit pension plans and also offer certain health care
and life insurance benefits to eligible employees and their eligible dependents upon the retirement of such
employees. Reported costs of providing non-contributory defined pension benefits and other postretirement
benefits are dependent upon numerous factors, assumptions and estimates. For example, these costs are impacted

44

by actual employee demographics (including age, compensation levels and employment periods), the level of
contributions made to the plan and earnings on plan assets. Pension and postretirement costs also may be
significantly affected by changes in key actuarial assumptions, including anticipated rates of return on plan assets
and the discount rates used in determining the projected benefit obligation and annual periodic pension costs. In
2010 and 2009, we made contributions of $10.3 million and $24.5 million, respectively, to our defined benefit
pension plans.

Our pension plan assets are primarily made up of equity and fixed income investments. Changes made to the
provisions of the plan may impact current and future pension costs. Fluctuations in actual equity market returns,
as well as changes in general interest rates may result in increased or decreased pension costs in future periods. In
accordance with Accounting Standards related to “Employers’ Accounting for Pensions,” changes in obligations
associated with these factors may not be immediately recognized as pension costs on the income statement, but
generally are recognized in future years over the remaining average service period of plan participants. As such,
significant portions of pension costs recorded in any period may not reflect the actual level of cash benefits
provided to plan participants. In 2010, we recorded non-cash pension expense of $13.0 million, of which
$11.3 million was attributable to periodic expense and $1.7 million was attributable to settlements compared to a
total of $21.1 million in 2009, of which $20.2 million was attributable to periodic expense and $0.9 million was
attributable to settlements.

Almost 90% of our defined benefit plan obligations are frozen as to future participants or increases in
accumulated benefits. Many of these obligations were acquired in prior strategic transactions. As an alternative to
defined benefit plans, we offer defined contribution plans for eligible employees.

The weighted average discount rate reflects the rate at which our defined benefit plan obligations could be
effectively settled. The rate, which is updated annually with the assistance of an independent actuary, uses a
model that reflects rates of a hypothetical portfolio of zero-coupon, high quality corporate bonds that mirror our
forecasted benefit plan payments in the future. The weighted average discount rate was decreased from 6.00% at
December 31, 2009 to 5.28% at December 31, 2010, which will increase the net periodic benefit cost in 2011.

Substantially all of our qualified pension plans are consolidated into one master trust. The investments held
in the master trust are managed by an established Investment Committee with assistance from independent
investment advisors. In July 2009, the Investment Committee adopted a new long-term investment policy for the
master trust that decreases the expected relative holdings of equity securities that targets investments in equity
securities at 59% of the portfolio, fixed income at 37%, cash equivalents at 3% and other investments of 1%. At
December 31, 2010, our master trust was invested as follows: investments in equity securities were at 62%;
investments in fixed income were at 34%; cash equivalents were at less than 1% and other investments were at
4%. Given meaningful equity returns in the fourth quarter of 2010, these investment percentages were slightly
different from the Investment Committee targets noted above, and we rebalanced our master trust investments
accordingly during the first quarter of 2011 in order to be consistent with those targets.

See Notes 14 and 15 to our Consolidated Financial Statements for information regarding retirement plans

and other postretirement benefits.

Other Commitments and Contingencies

On December 21, 2001, in connection with our acquisition of Legacy Dean, we purchased Dairy Farmers of
America’s (“DFA”) 33.8% interest in our operations. In connection with that transaction, we issued a contingent,
subordinated promissory note to DFA in the original principal amount of $40 million. DFA is a primary supplier
of raw milk, and the promissory note is designed to ensure that DFA has the opportunity to continue to supply
raw milk to certain of our facilities until 2021, or be paid for the loss of that business. The promissory note has a
20-year term and bears interest based on the consumer price index. Interest will not be paid in cash, but will be
added to the principal amount of the note annually, up to a maximum principal amount of $96 million. We may

45

prepay the note in whole or in part at any time, without penalty. The note will only become payable if we
materially breach or terminate one of our related milk supply agreements with DFA without renewal or
replacement. Otherwise, the note will expire at the end of 20 years, without any obligation to pay any portion of
the principal or interest. Payments we make under this note, if any, will be expensed as incurred. We have not
terminated, and we have not materially breached, any of our related milk supply agreements with DFA related to
the promissory note. We have previously terminated unrelated supply agreements with respect to several plants
that were supplied by DFA. In connection with our goals of accelerated cost control and increased supply chain
efficiency, we continue to evaluate our sources of raw milk supply.

We also have the following commitments and contingent liabilities, in addition to contingent liabilities

related to ordinary course litigation, investigations and audits:

•

•

•

certain indemnification obligations related to businesses that we have divested;

certain lease obligations, which require us to guarantee the minimum value of the leased asset at the
end of the lease; and

selected levels of property and casualty risks, primarily related to employee health care, workers’
compensation claims and other casualty losses.

See Note 18 to our Consolidated Financial Statements for more information about our commitments and

contingent obligations.

Future Capital Requirements

During 2011, we intend to invest a total of approximately $325 to $350 million in capital expenditures
primarily for our existing manufacturing facilities and distribution capabilities under our strategy to optimize our
fluid milk production network to increase profitability by reducing costs and to increase production capacity at
WhiteWave-Alpro to meet demand. We expect cash interest to be approximately $246 million to $254 million
based upon current debt levels and projected forward interest rates under our senior secured credit facility. Cash
interest excludes amortization of deferred financing fees and bond discounts of approximately $15 million. The
portion of our long-term debt due within the next 12 months totals $174.3 million. From time to time, we may
repurchase our outstanding debt obligations in the open market or in privately negotiated transactions, subject to
meeting certain terms and conditions as outlined in our credit agreements. We expect that cash flow from
operations and borrowings under our senior secured credit facility and receivables-backed facility will be
sufficient to meet our future capital requirements for the foreseeable future.

We currently have a maximum permitted senior secured leverage ratio of 4.25 times and maximum leverage
ratio of 5.75 times consolidated funded indebtedness to consolidated EBITDA for the prior four consecutive
quarters, each as defined under and calculated in accordance with the terms of our senior secured credit facility
and our receivables-backed facility. As of December 31, 2010, the senior secured leverage ratio was 3.80 times
and the leverage ratio was 5.13 times. The maximum permitted senior secured leverage ratio and leverage ratio
under both the senior secured credit facility and the receivables-backed facility will decline to 3.75 times and
5.50 times, respectively, as of March 31, 2012. These reduced leverage ratio requirements could limit our ability
to incur additional debt.

At December 31, 2010, $496.5 million was available under

the receivables-backed facility, with
$875.7 million also available under the senior secured revolving credit facility, subject to the limitations of our
credit agreements. Availability under the receivables-backed facility is calculated using the current receivables
balance for the seller entities, less adjustments for vendor concentration limits, reserve requirements, and other
adjustments as described in the Amended and Restated Receivables Purchase Agreement. Availability under the
senior secured revolving credit facility is calculated using the total commitment amount less current borrowings
and issued and outstanding letters of credit. Assuming additional borrowings were not utilized to acquire
incremental EBITDA, of this combined amount, $484.1 million was then available to finance working capital
and other general corporate purposes. At February 24, 2011, approximately $1.3 billion was available under the

46

receivables-backed and revolving credit facilities, subject to the limitations of our credit agreement. Of this
combined amount, assuming additional borrowings were not utilized to acquire incremental EBITDA,
approximately $492 million was available to finance working capital and other general corporate purposes.

Known Trends and Uncertainties

Prices of Raw Milk and Other Inputs

Conventional Raw Milk and Butterfat — The primary raw material used in Fresh Dairy Direct-
Morningstar’s products is conventional milk (which contains both raw milk and butterfat). The federal
government and certain state governments set minimum prices for raw milk and those prices are set on a monthly
basis. The regulated minimum prices differ based on how the raw milk is utilized. Raw milk processed into fluid
milk is priced at the Class I price and raw milk processed into products such as cottage cheese, creams and
creamers, ice cream and sour cream is priced at the Class II price. Generally, we pay the federal minimum prices
for raw milk, plus certain producer premiums (or “over-order” premiums) and location differentials. We also
incur other raw milk procurement costs in some locations (such as hauling, field personnel, etc.). A change in the
federal minimum price does not necessarily mean an identical change in our total raw milk costs as over-order
premiums may increase or decrease. This relationship is different in every region of the country and sometimes
within a region based on supplier arrangements. However, in general, the overall change in our raw milk costs
can be linked to the change in federal minimum prices. Because our Class II products typically have a higher fat
content than that contained in raw milk, we also purchase bulk cream for use in some of our Class II products.
Bulk cream is typically purchased based on a multiple of the AA butter price on the Chicago Mercantile
Exchange (“CME”).

In general, Fresh Dairy Direct-Morningstar changes the prices charged for Class I dairy products on a
monthly basis, as the costs of raw milk, packaging, fuel and other materials fluctuate. Prices for some Class II
products are also changed monthly while others are changed from time to time as circumstances warrant.
However, there can be a lag between the timing of a raw material cost increase or decrease and a corresponding
price change to our customers, especially in the case of Class II butterfat because Class II butterfat prices for
each month are not announced by the government until after the end of that month. Also, in some cases,
primarily with respect to diesel fuel and other non-dairy inputs, we are competitively or contractually constrained
with respect to the implementation of price changes. This can have a negative impact on our profitability and can
cause volatility in our earnings. Our sales and operating profit margin fluctuate with the price of our raw
materials and other inputs.

Conventional milk prices continued to increase throughout 2010 compared to historic lows in 2009. We
expect the Class I and Class II price to increase fairly dramatically through mid-second quarter of 2011 and level
off in the back half of the year. This significant increase in conventional milk prices is a result of limited supply
due to production challenges coupled with strong global demand for both Class I and Class II inputs.

Organic Raw Milk — The primary raw material used in our organic milk-based products is organic raw
milk. We currently purchase approximately 90% of our organic raw milk from a network of more than 550
family dairy farmers across the United States. The balance of our organic raw milk is sourced from two farms
that we own. We generally enter into supply agreements with organic dairy farmers with typical terms of two to
five years, which obligate us to purchase certain minimum quantities of organic raw milk. The organic dairy
industry regularly experiences significant swings in supply and demand based on consumer economic factors.
Retail price increases on private label products generally lag that of branded products, causing retail price gaps to
expand. Such gaps can create challenges where increasing costs of food and energy drive up the cost of organic
milk faster than retail prices can be increased. During 2010, we experienced increased demand for our organic
products particularly our Horizon Organic brand, and we have taken actions to meet the rising demand. We
continue to monitor our position in the organic milk category including taking proactive steps to manage our
supply, and we remain focused on maintaining our leading branded position as we balance market share
considerations against profitability.

47

in 2009, we began augmenting our current product

Soybeans — Historically, the primary raw material used in our soy-based products has been organic
soybeans. However,
line by offering customers and
consumers soy-based products manufactured with non–Genetically Modified Organism (“non-GMO”) soybeans.
The launch of these new products has shifted a substantial portion of our raw material requirements from organic
to non-GMO soybeans. Both organic soybeans and non-GMO soybeans are generally available from several
suppliers and we are not dependent on any single supplier for these raw materials.

Fuel and Resin Costs — Fresh Dairy Direct-Morningstar purchases diesel fuel to operate its extensive DSD
system and incurs fuel surcharge expense related to the products it delivers through third-party carriers.
WhiteWave-Alpro primarily relies on third-party carriers for product distribution and the transportation
agreements typically adjust for movement in diesel prices. Although we may utilize forward purchase contracts
and other instruments to mitigate the risks related to commodity price fluctuations, such strategies do not fully
mitigate commodity price risk. Adverse movements in commodity prices over the terms of the contracts or
instruments could decrease the economic benefits we derive from these strategies.

Another significant raw material we use is resin, which is a fossil fuel based product used to make plastic
bottles. Fresh Dairy Direct-Morningstar purchases approximately 28 million pounds of resin and bottles per
month. In 2010, we have experienced a sharp increase in the price of resin, particularly during the fourth quarter
of 2010. The prices of diesel and resin are subject to fluctuations based on changes in crude oil and natural gas
prices. We expect that fuel and resin costs will continue to fluctuate throughout 2011.

Competitive Environment

Supermarkets and food retailers have utilized competitive pricing on dairy products to drive traffic volume
and influence customer loyalty, which has significantly reduced their profit margins realized on the sale of such
products. During 2010, this margin compression was increasingly absorbed by dairy processors. Also, these
industry dynamics continue to drive private label market share gains over branded products, which impacted the
growth and profitability of our regionally branded products. These pressures have been exacerbated by volume
declines across dairy and non-dairy product categories. Although we began to see price stabilization over the
latter part of 2010, we expect these trends to continue. Margin pressures underscore the importance of our low
cost strategy. We continue to focus on cost control and supply chain efficiency through cost-cutting initiatives,
improved effectiveness in the pass-through of costs to our customers and our continued focus to drive
productivity and efficiency within our operations.

Additionally, there has been significant consolidation in the retail grocery industry in recent years, and this
trend is continuing. As our customer base consolidates, competition has intensified as we compete for the
business of fewer customers. In addition, there are several large regional grocery chains that have captive dairy
operations.

As a result of the intensely competitive dairy environment, we have been subject to a number of competitive
bidding situations in Fresh Dairy Direct-Morningstar, which has reduced our profitability on sales to several
customers. Currently, the dairy industry has experienced widespread price renegotiations. In bidding situations,
we are subject to the risk of losing certain customers altogether. The loss of any of our largest customers could
have a material adverse impact on our financial results. We do not generally enter into sales agreements with our
customers, and where such agreements exist, they are generally terminable at will by the customer.

48

Critical Accounting Estimates

In certain circumstances, the preparation of our Consolidated Financial Statements in conformity with
generally accepted accounting principles requires us to use our judgment
to make certain estimates and
assumptions. These estimates affect the reported amounts of assets and liabilities and disclosures of contingent
assets and liabilities at the date of the Consolidated Financial Statements and the reported amounts of net sales
and expenses during the reporting period. Our senior management has discussed the development and selection
of these critical accounting estimates, as well as our critical accounting policies (see Note 1 to our Consolidated
Financial Statements), with the Audit Committee of our Board of Directors. The following accounting estimates
are the most critical to aid in fully understanding and evaluating our reported financial results, and they require
our most difficult, subjective or complex judgments.

Estimate Description

Judgment and/or Uncertainty

Potential Impact if Results Differ

Goodwill and Intangible Assets

Our goodwill and intangible assets
result primarily from acquisitions
and primarily include trademarks
with finite lives and indefinite lives
and
intangible
assets.

customer-related

Perpetual trademarks and goodwill
impairment at
are evaluated for
least annually to ensure that
the
carrying value is recoverable.

exceeds

its book value

A perpetual trademark is impaired
its
if
is
estimated fair value. Goodwill
evaluated for
the
book value of its reporting unit
exceeds its estimated fair value.

impairment

if

Amortizable intangible assets are
only evaluated for impairment upon
a significant change in the operating
environment. If an evaluation of the
undiscounted cash flows indicates
impairment,
is written
the asset
down to its estimated fair value,
which
on
generally
discounted future cash flows.

based

is

In the fourth quarter of 2010, we
completed our annual impairment
testing using the methods described
above
record an
impairment charge.

and did not

Our goodwill and intangible assets
of
totaled
December 31, 2010.

billion

$3.9

as

for

initially

necessary

impairment

Considerable management judgment
is
value
to
intangible assets upon acquisition
and to evaluate those assets and
goodwill
going
forward. We determine fair value
using widely acceptable valuation
discounted
including
techniques
flows, market multiples
cash
analyses and relief
from royalty
analyses. Assumptions used in our
forecasted
valuations,
growth rates and our cost of capital,
are consistent with our
internal
projections and operating plans.

such

as

cash

sales

We believe that a trademark has an
indefinite life if it has a history of
flow
strong
and
performance that we expect
to
continue for the foreseeable future.
If these perpetual trademark criteria
are not met,
the trademarks are
amortized over their expected useful
lives. Determining the expected life
of a trademark requires considerable
management judgment and is based
on an evaluation of a number of
factors including the competitive
environment, trademark history and
anticipated future trademark support.

We believe that
the assumptions
used in valuing our intangible assets
and in our impairment analysis are
reasonable, but variations in any of
the assumptions may result
in
different calculations of fair values
that could result
in a material
impairment charge.

our

Direct,

discount

The fair value of each of our
reporting units exceeds its related
carrying value by approximately
$229 million or 6.4%, $367 million
or 65.1%, $856 million or 80.4%
and $33 million or 7.8% for Fresh
Dairy
Morningstar,
WhiteWave and Alpro, respectively.
Increasing
rates
assumed in these analyses by 0.25%
would not have resulted in an
impairment charge. The terminal
growth rates utilized in calculating
the fair value of our reporting units
(ranging from 1.8% to 3.5%) is
dependent upon meeting our internal
projections and operating plans, as
well
and
assumptions. A 0.25% reduction in
the terminal growth rate assumptions
used could result
in a material
impairment charge.

factors

other

as

While the results of our
testing
indicate that each of our reporting
units has a fair value in excess of its
carrying value and no impairment
charge was required, the excess of
the reporting unit fair values over
carrying values, specifically with

49

Estimate Description

Judgment and/or Uncertainty

Potential Impact if Results Differ

respect to our Fresh Dairy Direct
reporting unit, is significantly less
than in prior years. While testing
results do not indicate an impairment
charge, we can provide no assurance
that we will not have an impairment
charge in future periods as a result of
changes in our operating results or
our assumptions.

If actual results are not consistent
with our estimates and assumptions
used to calculate estimated future
cash flows, we may be exposed to
impairment
losses that could be
material.

Considerable management judgment
is necessary to evaluate the impact of
operating changes and to estimate
future cash flows.

Property, Plant and Equipment

that
not

We perform impairment tests when
the
indicate
circumstances
carrying
be
value may
recoverable. Indicators of impairment
could include significant changes in
business environment or planned
closure of a facility.

Our property, plant and equipment
totaled
of
December 31, 2010.

billion

$2.1

as

Accrued liabilities related to these
retained risks are calculated based
upon loss development
factors,
which contemplate a number of
variables including claims history
and expected trends. These loss
development factors are developed
by us in consultation with external
insurance brokers and actuaries.

If actual results differ from our
assumptions, we could be exposed
to material gains or losses.

A 10% change in our self-insured
liabilities could affect net earnings
by approximately $11.2 million.

Self Insurance Accruals

We retain selected levels of property
and casualty risks, primarily related
to employee health care, workers’
and other
compensation claims
casualty losses. Many of
these
potential losses are covered under
insurance programs
conventional
with third-party carriers with high
deductible limits. In other areas, we
are
stop-loss
coverages.

self-insured with

At December 31, 2010 we recorded
accrued liabilities related to these
retained risks of $187.3 million,
including both current and long-term
liabilities. During 2010, we reduced
our property and casualty insurance
reserves by $20 million, primarily
due to a continuous decline in claims
and better claims management.

50

Different assumptions could result
in the recognition of different
amounts of expense over different
periods of time.

A 0.25% reduction in the assumed
rate of return on plan assets or a
0.25% reduction in the discount
rate would increase our annual
pension expense by $0.5 million
and $0.6 million, respectively.

in

assumed
A 1% increase
trends would
healthcare
increase
post
retirement medical obligation by
approximately $1.1 million.

costs
the

aggregate

If actual results are not consistent
with our estimates or assumptions
we may be exposed to changes in
stock-based compensation expense
that could be material.

A 10% change in our stock-based
compensation expense for the year
ended December 31, 2010 would
have affected net earnings by
approximately $2.2 million.

Additionally,
remeasurements of
the fair value of our CPUs as a
result of fluctuations in our stock
price as compared to our peers can
cause variability in our results of
operations.

Employee Benefit Plans

We provide a range of benefits
including pension and postretirement
benefits to our eligible employees
and retirees.

Stock Based Compensation Plans

Options and RSUs

We provide a number of option and
other
stock based compensation
plans to our eligible employees.

We determine the fair value of our
stock option and other stock based
awards at the date of grant using
the Black-Scholes option pricing
model.

Cash Awards Linked
Stock Price

to

our

of

period.

three-year

compensation

Our Cash
Performance Unit
(“CPU”) awards are designed to
link
certain
executive officers and other key
employees to our performance over
a
The
performance metric, as defined in
the award, is the performance of our
stock price relative to that of a peer
group of companies. The range of
payout under the award is between
0% and 200% and is payable in
cash at the end of the performance
period, which is generally three
years. Due to our relative stock
performance during 2010, we have
no liability associated with our
2010 CPU awards.

of

such

return,

We record annual amounts relating
to these plans, which include various
actuarial
as
assumptions,
discount rates, assumed investment
rates
compensation
increases, employee turnover rates
and health care cost trend rates. We
review our actuarial assumptions on
an
and make
basis
modifications to the assumptions
based on current rates and trends
when it is deemed appropriate. The
effect
is
generally recorded and amortized
over future periods.

the modifications

annual

of

our

models

and
Option-pricing
generally
valuation
accepted
techniques require management to
make assumptions and to apply
to determine the fair
judgment
awards. These
value
of
judgments
assumptions
future
the
include
price,
volatility
stock
of
expected dividend yield,
future
employee turnover rates and future
employee stock option exercise
behaviors. Changes
these
assumptions can materially affect
the fair value estimate.

and
estimating
our

in

51

Income Taxes

for

uncertain

A liability
tax
positions is recorded to the extent a
tax position taken or expected to be
taken in a tax return does not meet
certain recognition or measurement
criteria. A valuation allowance is
recorded against a deferred tax asset
if it is not more likely than not that
the asset will be realized.

uncertain

At December 31, 2010, our liability
for
positions,
including accrued interest, was
$58.2 million, and our valuation
allowance was $7.7 million.

tax

to

related

Considerable management judgment
is necessary to assess the inherent
uncertainties
the
interpretations of complex tax laws,
regulations, and taxing authority
rulings as well as to the expiration of
statutes
the
jurisdictions in which we operate.

limitations

of

in

evaluating

including the

several
in

factors are
Additionally,
considered
the
realizability of our deferred tax
assets,
remaining
years available for carryforward,
the tax laws for
the applicable
jurisdictions, the future profitability
of the specific business units, and
tax planning strategies.

a

and

result

change

judgments

Our
estimates
concerning uncertain tax positions
may
of
as
evaluation of new information,
such as the outcome of tax audits
further
or
to
changes
tax laws and
interpretations of
judgments and
regulations. Our
estimates concerning realizability
of deferred tax assets could change
if any of the evaluation factors
change.

or

If such changes take place, there is
a risk that our effective tax rate
could increase or decrease in any
period, impacting our net earnings.

Recent Accounting Pronouncements

Recently Adopted Accounting Pronouncements — Effective January 1, 2010, we adopted the Accounting
Standards related to “Improving Disclosures about Fair Value Measurements” for the portion of this standard that
is effective for interim and annual reporting periods beginning after December 15, 2009. The amendments in this
standard are intended to improve the disclosures around fair value measurements. This standard requires
disclosure of significant transfers in or out of Level 1 and Level 2 fair value measurements, as well as the reasons
for the transfers. It also clarifies existing disclosures related to the level of disaggregation in the disclosures, as
well as the required disclosures about inputs and valuation techniques. The adoption of this portion of the
standard has not had a material
impact on our Consolidated Financial Statements. See Note 10 to our
Consolidated Financial Statements. Additionally, a portion of the standard is effective for interim and annual
reporting periods beginning after December 15, 2010. This portion requires disclosure of purchases, sales,
issuances and settlements in the reconciliation of Level 3 fair value measurements. This portion of the standard is
not anticipated to have a material impact on our Consolidated Financial Statements.

Effective January 1, 2010, we adopted the Accounting Standards related to “Amendments to FASB
Interpretation No. 46(R)”. This standard changes how a company determines when an entity that is insufficiently
capitalized or is not controlled through voting (or similar rights) should be consolidated. The determination of
whether a company is required to consolidate an entity is based on, among other things, an entity’s purpose and
design and a company’s ability to direct the activities of the entity that most significantly impact the entity’s
economic performance. The adoption of this Accounting Standard did not change our accounting for our
investment in our Hero/WhiteWave joint venture. See Note 3 to our Consolidated Financial Statements.

Effective January 1, 2010, we adopted the Accounting Standards related to “Accounting for Transfer of
Financial Assets”. This standard requires more disclosure of information about transfers of financial assets,
including securitization transactions, and where companies have continuing exposure to the risk related to
transferred financial assets. It eliminates the concept of a “qualifying special-purpose entity”, changes the
requirements for derecognizing financial assets and requires special disclosures. The adoption of this Accounting
Standard did not have a material impact on our Consolidated Financial Statements.

Impact of New Federal Legislation — The Patient Protection and Affordable Care Act became law on
March 23, 2010, and on March 30, 2010 the Health Care and Education Reconciliation Act of 2010 became law

52

(together the “Act”). The enactment of this legislation has not had, nor is it expected to have, a material impact
on our Consolidated Financial Statements.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to market risk due to commodity price, interest rate and foreign currency fluctuations. From

time to time we enter into arrangements with other parties to hedge our exposure to these fluctuations.

Commodity Price Fluctuations

We are exposed to commodity price fluctuations, including milk, organic and non-GMO soybeans, butterfat,
sweeteners and other commodity costs used in the manufacturing, packaging and distribution of our products,
including utilities, natural gas, resin and diesel fuel. In order to secure adequate supplies of materials and bring
greater stability to the cost of ingredients and their related manufacturing, packaging and distribution, we
routinely enter into forward purchase contracts and other purchase arrangements with suppliers. Under the
forward purchase contracts, we commit to purchasing agreed-upon quantities of ingredients and commodities at
agreed-upon prices at specified future dates. The outstanding purchase commitment for these commodities at any
point in time typically ranges from one month’s to one year’s anticipated requirements, depending on the
ingredient or commodity. These contracts are considered normal purchases and sales. In addition to entering into
forward purchase contracts, from time to time we may purchase over-the-counter contracts with our qualified
banking partners or exchange-traded commodity futures contracts for raw materials that are ingredients of our
products or components of such ingredients.

Our open commodity derivative contracts that qualify for hedge accounting had a notional value of
$34.3 million as of December 31, 2010. These contracts resulted in net unrealized gains of $2.7 million as of
December 31, 2010. At the end of 2010, the potential change in fair value of commodity derivative instruments,
assuming a 10% adverse movement in the underlying commodity price, would have resulted in an unrealized net
loss of $1.1 million.

Although we may utilize forward purchase contracts and other instruments to mitigate the risks related to
commodity price fluctuation, such strategies do not fully mitigate commodity price risk. Adverse movements in
commodity prices over the terms of the contracts or instruments could decrease the economic benefits we derive
from these strategies. See Note 10 of our Consolidated Financial Statements for a description of our commodity
related hedges.

Interest Rate Fluctuations

In order to reduce the volatility of earnings and cash flows that arise from changes in interest rates, we
manage interest rate risk through the use of interest rate swap agreements. These swap agreements, including our
forward starting swap agreements that have an effective date of March 31, 2012, provide hedges for loans under
our senior secured credit facility by limiting or fixing the LIBOR interest rates specified in the senior secured
credit facility until the indicated expiration dates.

We are exposed to market risk under these arrangements due to the possibility of interest rates on our senior
secured credit facility falling below the rates on our interest rate derivative agreements. We believe the credit risk
under these arrangements is remote since the counterparties to our interest rate derivative agreements are major
financial institutions. However, if any of the counterparties to our hedging arrangements become unable to fulfill
their obligation to us, we may lose the financial benefits of these arrangements.

A majority of our debt obligations are hedged at fixed rates and the remaining debt obligations are currently
at variable rates. We have performed a sensitivity analysis assuming a hypothetical 10% adverse movement in

53

interest rates. As of December 31, 2010, the analysis indicated that such interest rate movement would not have a
material effect on our financial position, results of operations or cash flows. However, actual gains and losses in
the future may differ materially from that analysis based on changes in the timing and amount of interest rate
movement and our actual exposure and hedges.

Foreign Currency Fluctuations

Historically, our international operations represented less than 1% of our sales and long-lived assets. With
our acquisition of Alpro in July 2009, the relative percentage of our international sales increased slightly. Sales in
foreign countries, as well as certain expenses related to those sales, are transacted in currencies other than our
reporting currency, the U.S. dollar. Our foreign currency exchange rate risk is primarily limited to the Euro and
the British Pound. We may, from time to time, employ derivative financial instruments to manage our exposure
to fluctuations in foreign currency rates or enter into forward currency exchange contracts to hedge our net
investment and intercompany payable or receivable balances in foreign operations. During 2010, we did not enter
into any foreign currency related contracts.

54

Item 8. Consolidated Financial Statements

Our Consolidated Financial Statements for 2010 are included in this report on the following pages.

Consolidated Balance Sheets as of December 31, 2010 and 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Consolidated Statements of Income for the years ended December 31, 2010, 2009 and 2008 . . . . . . . . . . .

Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2010, 2009 and

2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Consolidated Statements of Cash Flows for the years ended December 31, 2010, 2009 and 2008 . . . . . . . .

Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1.

Summary of Significant Accounting Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Page

F-1

F-2

F-3

F-5

F-6

F-6

2. Discontinued Operations, Divestitures and Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-10

3.

4.
5.

Investment in Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-12

Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-13
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-14
Property, Plant and Equipment

6. Goodwill and Intangible Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-14

7. Accounts Payable and Accrued Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-16

8.

Income Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-17

9. Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-20

10. Derivative Financial Instruments and Fair Value Measurement . . . . . . . . . . . . . . . . . . . . . . . . . . . F-33

11. Common Stock and Share-Based Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-36

12. Earnings per Share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-40

13. Other Comprehensive Income (Loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-41

14. Employee Retirement and Profit Sharing Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-41

15. Postretirement Benefits Other Than Pensions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-47

16. Facility Closing and Reorganization Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-49

17. Supplemental Cash Flow Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-51

18. Commitments and Contingencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-51

19. Segment, Geographic and Customer Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-55

20. Quarterly Results of Operations (unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-58

Report of Independent Registered Public Accounting Firm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-59

55

DEAN FOODS COMPANY

CONSOLIDATED BALANCE SHEETS

December 31

2010

2009

(Dollars in thousands,
except share data)

Current assets:

ASSETS

Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Receivables, net of allowance of $15,347 and $16,888 . . . . . . . . . . . . . . . . . . . . .
Income tax receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventories, net
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid expenses and other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Assets held for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

92,007
891,019
71,337
425,576
141,653
77,510
117,114

$

45,190
871,833
19,434
436,061
154,927
90,061
30,088

Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property, plant and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Identifiable intangible and other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,816,216
2,113,391
3,179,192
847,868

1,647,594
2,102,253
3,272,814
821,280

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$7,956,667

$7,843,941

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable and accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current portion of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Liabilities of disposal groups held for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$1,262,876
174,250
3,839

$1,225,017
248,352
9,045

Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other long-term liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commitments and contingencies (Note 18)
Stockholders’ equity:

1,440,965
3,893,275
756,714
351,645

1,482,414
3,980,627
620,093
393,575

Dean Foods Company stockholders’ equity:
Preferred stock, none issued . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Common stock 182,255,334 and 180,854,163 shares issued and

outstanding, with a par value of $0.01 per share . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additional paid-in capital
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated other comprehensive loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—

—

1,823
1,061,253
583,102
(146,653)

1,809
1,025,502
491,611
(166,976)

Total Dean Foods Company stockholders’ equity . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Non-controlling Interest

1,499,525
14,543

1,351,946
15,286

Total stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,514,068

1,367,232

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$7,956,667

$7,843,941

See Notes to Consolidated Financial Statements.

F-1

DEAN FOODS COMPANY

CONSOLIDATED STATEMENTS OF INCOME

Year Ended December 31

Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating costs and expenses:

Selling and distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
General and administrative . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of intangibles . . . . . . . . . . . . . . . . . . . . . . . . . .
Facility closing and reorganization costs . . . . . . . . . . . . . . .
Other expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total operating costs and expenses . . . . . . . . . . . . . . . .

Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other (income) expense:

Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other (income) expense, net . . . . . . . . . . . . . . . . . . . . . . . . .

Total other expense . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Income from continuing operations before income taxes . . . . . . .
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Income from continuing operations . . . . . . . . . . . . . . . . . . . . . . .
Gain (loss) on sale of discontinued operations, net of tax . . . . . .
Income (loss) from discontinued operations, net of tax . . . . . . . .

Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . .

Net loss attributable to non-controlling interest

2010
2008
2009
(Dollars in thousands, except share data)
$ 11,113,782
8,008,561

$ 12,122,887
9,116,965

$ 12,361,311
9,438,593

3,005,922

3,105,221

2,922,718

1,904,526
629,656
11,295
30,761
30,000

2,606,238

399,684

248,301
161

248,462

151,222
73,482

77,740
7,521
(2,505)

82,756
8,735

1,818,833
623,835
9,637
30,162
—

2,482,467

622,754

246,510
(4,221)

242,289

380,465
151,845

228,620
89
(862)

227,847
12,461

1,802,214
482,392
9,836
22,758
—

2,317,200

605,518

308,178
1,123

309,301

296,217
114,330

181,887
(1,275)
3,158

183,770
—

Net income attributable to Dean Foods Company . . . . . . . . . . . .

$

91,491

$

240,308

$

183,770

Average common shares:

Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

181,799,306
182,861,802

170,986,886
173,858,303

149,266,519
153,395,746

Basic earnings per common share:

Income from continuing operations attributable to Dean

Foods Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

0.48

$

1.41

$

Income from discontinued operations attributable to Dean

Foods Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

0.02

—

Net income attributable to Dean Foods Company . . . . . . . .

$

0.50

$

1.41

$

Diluted earnings per common share:

Income from continuing operations attributable to Dean

Foods Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

0.47

$

1.39

$

Income (loss) from discontinued operations attributable to

Dean Foods Company . . . . . . . . . . . . . . . . . . . . . . . . . . . .

0.03

(0.01)

Net income attributable to Dean Foods Company . . . . . . . .

$

0.50

$

1.38

$

1.22

0.01

1.23

1.19

0.01

1.20

See Notes to Consolidated Financial Statements.

F-2

DEAN FOODS COMPANY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Dean Foods Company Stockholders

Common Stock

Shares

Amount

Additional
Paid-In
Capital

Retained
Earnings

Accumulated
Other
Comprehensive
Income (Loss)

Non-
controlling
Interest

Total
Stockholders’
Equity

Comprehensive
Income

Balance, January 1, 2008 . . . . . . . 132,236,217 $1,322 $

(Dollars in thousands, except share data)
$ (87,802)

$ —

70,214 $ 67,533

Issuance of common stock,

net of tax impact of share-
based compensation . . . . . .

Share-based compensation

expense . . . . . . . . . . . . . . . .

Public offering of equity

3,100,254

—

securities . . . . . . . . . . . . . . . 18,700,327
—

Net income . . . . . . . . . . . . . . .
Other comprehensive income

31

—

187
—

27,736

35,180

—

—

399,290

—
— 183,770

—

—

—
—

(loss) (Note 13)
Change in fair value of

derivative instruments, net
of tax benefit of $64,797 . .

Amounts reclassified to

income statement related to
hedging activities, net of
tax of $15,984 . . . . . . . . . . .

Cumulative translation

adjustment

. . . . . . . . . . . . .

Pension liability adjustment,

net of tax benefit of
$30,992 . . . . . . . . . . . . . . . .

Comprehensive income . . . . .

—

—

—

—

—

—

—

—

—

—

—

—

—

(105,911)

—

—

—

26,640

(8,497)

(51,459)

—

—

—
—

—

—

—

—

$

51,267

27,767

35,180

399,477
183,770

$ 183,770

(105,911)

(105,911)

26,640

26,640

(8,497)

(8,497)

(51,459)

(51,459)

$ 44,543

Balance, December 31, 2008 . . . . 154,036,798 $1,540 $ 532,420 $251,303

$(227,029)

$ —

$ 558,234

Issuance of common stock,

net of tax impact of share-
based compensation . . . . . .

Share-based compensation

expense . . . . . . . . . . . . . . . .

Public offering of equity

1,412,365

—

securities . . . . . . . . . . . . . . . 25,405,000

15

—

254

9,292

39,371

444,419

Fair value of non-controlling

interest acquired . . . . . . . . .

Capital contribution from
non-controlling interest

Net loss attributable to

. . .

non-controlling interest
Other comprehensive income

. . .

(loss) (Note 13)

Net income attributable to

Dean Foods Company . . . .

Change in fair value of

derivative instruments, net
of tax benefit of $13,387 . .

Amounts reclassified to

income statement related to
hedging activities, net of
tax of $42,466 . . . . . . . . . . .

Cumulative translation

adjustment

. . . . . . . . . . . . .

Pension liability adjustment,

net of tax of $3,260 . . . . . .

Comprehensive income . . . . .

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

— 240,308

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

(22,417)

70,772

2,509

9,189

—

—

—

14,499

13,248

9,307

39,371

444,673

14,499

13,248

(12,461)

(12,461)

—

—

—

—

—

240,308

$ 240,308

(22,417)

(22,417)

70,772

70,772

2,509

9,189

2,509

9,189

$ 300,361

Balance, December 31, 2009 . . . . 180,854,163 $1,809 $1,025,502 $491,611

$(166,976)

$ 15,286

$1,367,232

F-3

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY—(Continued)

DEAN FOODS COMPANY

Dean Foods Company Stockholders

Common Stock

Shares

Amount

Additional
Paid-In
Capital

Retained
Earnings

Accumulated
Other
Comprehensive
Income (Loss)

Non-
controlling
Interest

Total
Stockholders’
Equity

Comprehensive
Income

(Dollars in thousands, except share data)

Issuance of common stock,

net of tax impact of
share-based
compensation . . . . . . . . .

Share-based compensation

expense . . . . . . . . . . . . .

Capital contribution from

non-controlling
interest . . . . . . . . . . . . . .

Net loss attributable to
non-controlling
interest . . . . . . . . . . . . . .

Other comprehensive

income (loss) (Note 13)
Net income attributable to

Dean Foods Company . .

Change in fair value of

derivative instruments,
net of tax benefit of
$12,491 . . . . . . . . . . . . .

Amounts reclassified to

income statement related
to hedging activities, net
of tax of $37,180 . . . . . .

Cumulative translation

adjustment
Pension liability

. . . . . . . . . . .

adjustment, net of tax
benefit of $525 . . . . . . . .

Comprehensive income
attributable to Dean
Foods Company . . . . . . .

1,401,171

14

(1,121)

—

—

—

—

—

—

36,872

—

—

—

—

—

—

—

—

—

91,491

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

(17,360)

59,393

(20,707)

(1,003)

—

—

(1,107)

36,872

7,992

7,992

(8,735)

(8,735)

—

—

—

—

—

91,491

$ 91,491

(17,360)

(17,360)

59,393

59,393

(20,707)

(20,707)

(1,003)

(1,003)

$111,814

Balance, December 31,

2010 . . . . . . . . . . . . . . . . . . . . 182,255,334

$1,823

$1,061,253 $583,102

$(146,653)

$14,543

$1,514,068

See Notes to Consolidated Financial Statements.

F-4

DEAN FOODS COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS

Year Ended December 31

2010

2009
(In thousands)

2008

Cash flows from operating activities:

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
(Income) loss from discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . .
(Gain) loss on sale of discontinued operations . . . . . . . . . . . . . . . . . . . . . . .
Adjustments to reconcile net income to net cash provided by operating

82,756 $
2,505
(7,521)

227,847 $
862
(89)

183,770
(3,158)
1,275

activities:

Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Share-based compensation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss on disposition of assets and operations . . . . . . . . . . . . . . . . . . . . .
Write-down of impaired assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Write-off of financing costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Changes in operating assets and liabilities, net of acquisitions:

Receivables, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid expenses and other assets . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts payable and accrued expenses . . . . . . . . . . . . . . . . . . . .
Income taxes receivable/payable . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash provided by operating activities—continuing

276,080
36,872
5,627
14,186
3,695
121,043
(1,379)

(25,659)
4,020
5,764
62,931
(55,220)

253,930
39,371
12,638
16,815
—
40,352
(1,337)

57,577
(8,389)
5,393
59,148
(46,039)

236,820
35,180
2,968
20,740
—
67,980
(6,380)

58,383
(4,820)
11,055
64,656
45,037

operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

525,700

658,079

713,506

Net cash provided by operating activities—discontinued

operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash provided by operating activities . . . . . . . . . . . . . . .

8,765
534,465

2,475
660,554

3,122
716,628

Cash flows from investing activities:

Payments for property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . .
Payments for acquisitions, net of cash received . . . . . . . . . . . . . . . . . . . . . .
Proceeds from sale of fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(301,974)

—
8,399

(267,690)
(581,211)
8,833

(256,139)
(95,851)
11,329

Net cash used in investing activities—continuing

operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(293,575)

(840,068)

(340,661)

Net cash provided by (used in) investing activities—

discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash used in investing activities . . . . . . . . . . . . . . . . . . .

Cash flows from financing activities:

Proceeds from issuance of debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repayment of debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from senior secured revolver . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments for senior secured revolver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from receivables-backed facility . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments for receivables-backed facility . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments of financing costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Issuance of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax savings on share-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital contribution from non-controlling interest . . . . . . . . . . . . . . . . . . . .
Net cash provided by (used in) financing activities . . . . . . .
Effect of exchange rate changes on cash and cash

24,121
(269,454)

(525)
(840,593)

(826)
(341,487)

400,000
(514,457)
4,006,680
(4,068,880)
2,445,500
(2,445,500)
(52,720)
3,415
278
7,992
(217,692)

—

(330,363)
3,689,000
(3,173,800)
1,784,728
(2,244,728)

—
454,326
894
12,708
192,765

—

(109,987)
3,298,200
(3,848,500)
1,852,320
(1,992,320)

—
419,663
7,581
—

(373,043)

equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents, beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents, end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

(502)
46,817
45,190
92,007 $

808
13,534
31,656
45,190 $

—
2,098
29,558
31,656

See Notes to Consolidated Financial Statements.

F-5

DEAN FOODS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2010, 2009 and 2008

1.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Our Business — We are one of the leading food and beverage companies in the United States, as
well as a global leader in branded plant-based beverages, such as soy, almond and coconut milks, and other
soy-based food products. As we continue to evaluate and seek to maximize the value of our strong brands and
product offerings, we have aligned our leadership teams, operating strategies and supply chain initiatives around
our two lines of business: Fresh Dairy Direct-Morningstar (previously Fresh Dairy Direct) and WhiteWave-Alpro
(previously WhiteWave-Morningstar). Fresh Dairy Direct-Morningstar is the largest processor and distributor of
milk and other dairy products in the country, with products sold under more than 50 familiar local and regional
brands and a wide array of private labels. WhiteWave-Alpro markets and sells a variety of nationally branded
dairy and dairy-related products, such as Horizon Organic milk and other dairy products, The Organic Cow
organic dairy products, International Delight coffee creamers and LAND O LAKES creamers and fluid dairy
products, and Silk plant-based beverages such as soy, almond and coconut milks and cultured soy products.
WhiteWave-Alpro also offers branded soy-based beverages and food products in Europe and markets its products
under the Alpro and Provamel brands.

Basis of Presentation and Consolidation — Our Consolidated Financial Statements are prepared in
accordance with U.S. generally accepted accounting principles (“GAAP”), and include the accounts of our
wholly-owned subsidiaries, as well as those of our 50% owned joint venture between WhiteWave and Hero
Group (“Hero”). The resulting non-controlling interest’s share in the equity of the joint venture is presented as a
separate component of stockholders’ equity in the Consolidated Balance Sheets and Consolidated Statements of
Stockholders’ Equity and the net loss attributable to the non-controlling interest is presented in the Consolidated
Statements of Income. All intercompany balances and transactions are eliminated in consolidation.

Unless otherwise indicated, references in the report to “we,” “us” or “our” refer to Dean Foods Company

and its subsidiaries, taken as a whole.

In the first quarter of 2010, our Chief Executive Officer, who is our chief operating decision maker, changed
the way he evaluates the performance of our operations, develops strategy and allocates capital resources. As a
result, beginning in the first quarter of 2010, our Morningstar operations were aligned with our Fresh Dairy
Direct operations, so that our two reporting segments consisted of Fresh Dairy Direct-Morningstar and
WhiteWave-Alpro. This change reflects the divergence between the strategies and objectives of these two
segments. Our value-added branded operations at WhiteWave-Alpro added scale with the acquisition of Alpro in
July 2009 and are focused on driving growth through effective marketing and innovation. Our traditional dairy
operations at Fresh Dairy Direct-Morningstar are driven by a focus on cost and service leadership. We believe
these revised segments have increased internal focus and offered management and investors improved visibility
into the performance of the segments against their specific objectives. All segment results set forth herein have
been recast to present results on a comparable basis. These changes had no impact on consolidated net sales or
operating income.

During the second quarter of 2010, we committed to a plan to sell the business operations of our Rachel’s
Dairy companies (“Rachel’s”), which provide organic branded dairy-based chilled yogurt, milk and related dairy
products primarily in the United Kingdom. The sale of these operations was completed on August 4, 2010. The
decision to sell these operations was part of our strategic growth plan and allows us to target our investments in
growing our core dairy and branded businesses by divesting of non-core businesses. All of our Rachel’s
operations, previously reported within the WhiteWave-Alpro segment, have been reclassified as discontinued
operations. See Note 2. Unless stated otherwise, any reference to income statement items in these financial
statements refers to results from continuing operations.

F-6

Use of Estimates — The preparation of our Consolidated Financial Statements in conformity with GAAP
requires us to use our judgment to make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosures of contingent assets and liabilities at the date of the Consolidated Financial Statements
and the reported amounts of net sales and expenses during the reporting period. Actual results could differ from
these estimates under different assumptions or conditions.

Cash Equivalents — We consider temporary investments with an original maturity of three months or less

to be cash equivalents.

Inventories — Inventories are stated at the lower of cost or market. Our products are valued using the
first-in, first-out method. The costs of finished goods inventories include raw materials, direct labor and indirect
production and overhead costs. Reserves for obsolete or excess inventory are not material.

Property, Plant and Equipment — Property, plant and equipment are stated at acquisition cost, plus
capitalized interest on borrowings during the actual construction period of major capital projects. Also included
in property, plant and equipment are certain direct costs related to the implementation of computer software for
internal use. Depreciation is calculated using the straight-line method typically over the following range of
estimated useful lives of the assets:

Asset

Buildings
Machinery and equipment
Leasehold improvements

Useful Life

15 to 40 years
3 to 20 years
Over the terms of the applicable lease
agreements

We perform property, plant and equipment impairment tests when circumstances indicate that the carrying
value may not be recoverable. Indicators of impairment could include significant changes in business
environment or planned closure of a facility. Considerable management judgment is necessary to evaluate the
impact of operating changes and to estimate future cash flows. Assumptions used in our impairment evaluations
include product development, volume growth and contribution margins. Leasehold improvements are amortized
over the shorter of their lease term or their estimated useful lives. Expenditures for repairs and maintenance,
which do not improve or extend the life of the assets, are expensed as incurred.

Intangible and Other Assets — Identifiable intangible assets, other than trademarks that have indefinite

lives, are typically amortized over the following range of estimated useful lives:

Asset

Customer relationships
Certain finite lived trademarks
Customer supply contracts
Noncompetition agreements
Deferred financing costs

Useful Life

5 to 15 years
5 to 15 years
Over the terms of the agreements
Over the terms of the agreements
Over the terms of the related debt

In accordance with Accounting Standards related to “Goodwill and Other Intangible Assets”, we do not
amortize goodwill and other intangible assets determined to have indefinite useful lives. Instead, we conduct
impairment tests on our goodwill, trademarks and other intangible assets with indefinite lives annually and when
circumstances indicate that the carrying value may not be recoverable. To determine whether impairment exists,
we primarily utilize a discounted future cash flow analysis.

Assets Held for Sale — We classify assets as held for sale when management approves and commits to a
formal plan of sale and our expectation is that the sale will be completed within one year. The carrying value of
the net assets of the business held for sale are then recorded at the fair market value, less costs to sell. As of

F-7

December 31, 2010 and 2009, assets of $117.1 million and $30.1 million, respectively, related to the sale of our
yogurt operations, within Fresh Dairy Direct-Morningstar, in 2010 and related to the discontinued operations of
our Rachel’s business, within WhiteWave-Alpro, in 2009, were recorded within the assets held for sale line on
our Consolidated Balance Sheets within and are no longer being depreciated. See Note 2. As of December 31,
2010 and 2009, assets of $2.3 million and $24.9 million, respectively, related to facilities that are closed or to be
closed, were held for sale and recorded in prepaid expenses and other current assets line on our Consolidated
Balance Sheets within our Fresh Dairy Direct-Morningstar segment and are no longer being depreciated. During
the third quarter of 2010, we reclassified $14 million of assets designated as held for sale to assets held for use.
Of this amount, $7 million related to a property that we now intend to use for additional capacity to support the
growth in our WhiteWave Foods business. The remaining $7 million relates to a facility that we continue to
actively market for sale but, given current market conditions, we no longer believe will be sold in the near term.
These transfers did not have a material impact to our results of operations for the period ended December 31,
2010. In 2010 and 2009, we recorded a charge of $13.2 million and $16.3 million, respectively, primarily to
write-down certain of the closed facility assets to their estimated fair value. These charges were recorded within
facility closing and reorganization costs. See Note 16.

Foreign Currency Translation — The financial statements of our foreign subsidiaries are translated to U.S.
dollars. The functional currency of our foreign subsidiaries is generally the local currency of the country.
Accordingly, assets and liabilities of the foreign subsidiaries are translated to U.S. dollars at year-end exchange
rates. Income and expense items are translated at the average rates prevailing during the year. Changes in
exchange rates that affect cash flows and the related receivables or payables are recognized as transaction gains
and losses and are recognized in the statement of income with their related operational activity. Currently, an
immaterial amount of transaction gains and losses are reflected in general and administrative expense in our
Consolidated Statements of Income. The cumulative translation adjustment in stockholders’ equity reflects the
unrealized adjustments resulting from translating the financial statements of our foreign subsidiaries.

Share-Based Compensation — Share-based compensation expense is recognized for equity awards over the
vesting period based on their grant date fair value. The fair value of option awards is estimated at the date of
grant using the Black-Scholes valuation model. The fair value of restricted stock unit awards is equal to the
closing price of our stock on the date of grant. Compensation expense is recognized only for equity awards
expected to vest. We estimate forfeitures at the date of grant based on our historical experience and future
expectations. Share-based compensation expense is included within the same financial statement caption where
the recipient’s cash compensation is reported and is classified as a corporate item for segment reporting.

Sales Recognition and Accounts Receivable — Sales are recognized when persuasive evidence of an
arrangement exists, the price is fixed or determinable, the product has been delivered to the customer and there is
a reasonable assurance of collection of the sales proceeds. Sales are reduced by certain sales incentives, some of
which are recorded by estimating expense based on our historical experience. We provide credit terms to
customers generally ranging up to 30 days, perform ongoing credit evaluation of our customers and maintain
allowances for potential credit losses based on our historical experience. Estimated product returns have not
historically been material.

Income Taxes — All of our wholly-owned U.S. operating subsidiaries, as well as our proportional share of
the operations of our unconsolidated affiliates and our consolidated joint venture, are included in our U.S. federal
consolidated tax return. Our foreign subsidiaries are required to file local jurisdiction income tax returns with
respect to their operations, the earnings from which are expected to be reinvested indefinitely. At December 31,
2010, no provision had been made for U.S. federal or state income tax on approximately $43.8 million of
accumulated foreign earnings as they are considered to be indefinitely reinvested.

Deferred income taxes arise from temporary differences between amounts recorded in the Consolidated
Financial Statements and tax bases of assets and liabilities using enacted tax rates in effect for the years in which
the differences are expected to reverse. Deferred tax assets, including the benefit of net operating loss and tax
credit carryforwards, are evaluated based on the guidelines for realization and are reduced by a valuation
allowance if deemed necessary.

F-8

We recognize the income tax benefit from an uncertain tax position when it is more likely than not that,
based on technical merits, the position will be sustained upon examination, including resolutions of any related
appeals or litigation processes. We recognize accrued interest related to uncertain tax positions as a component of
income tax expense, and penalties, if incurred, are recognized as a component of operating income.

including media, agency, coupons,

Sales Incentives and Advertising Expense — We market our products through advertising and other
promotional activities,
trade shows and other promotional activities.
Advertising expense is charged to income during the period incurred, except for expenses related to the
development of a major commercial or media campaign which are charged to income during the period in which
the advertisement or campaign is first presented by the media. Advertising expense totaled $190.7 million in
2010, $174.3 million in 2009 and $121.3 million in 2008. Additionally, prepaid advertising costs were $2.3
million and $1.5 million at December 31, 2010 and 2009, respectively. Certain customer and trade promotional
programs, such as rebates, are recorded as a reduction of sales.

Shipping and Handling Fees — Our shipping and handling costs are included in both cost of sales and
selling and distribution expense, depending on the nature of such costs. Shipping and handling costs included in
cost of sales reflect inventory warehouse costs and product loading and handling costs. Shipping and handling
costs included in selling and distribution expense consist primarily of those costs associated with moving
finished products from production facilities through our distribution network, including costs associated with its
distribution centers, route delivery costs and the cost of shipping products to customers through third party
carriers. Shipping and handling costs that were recorded as a component of selling and distribution expense were
$1.4 billion, $1.3 billion and $1.4 billion during 2010, 2009 and 2008, respectively.

Insurance Accruals — We retain selected levels of property and casualty risks, primarily related to
employee health care, workers’ compensation claims and other casualty losses. Many of these potential losses are
covered under conventional insurance programs with third party carriers with high deductible limits. In other
areas, we are self-insured with stop-loss coverage. Accrued liabilities for incurred but not reported losses related
to these retained risks are calculated based upon loss development factors which contemplate a number of factors
including claims history and expected trends.

Research and Development — Our research and development activities primarily consist of generating and
testing new product concepts, new flavors and packaging. Our total research and development expense was $25.8
million, $25.5 million and $14.0 million for 2010, 2009 and 2008, respectively. Research and development costs
are primarily included in general and administrative expenses in our Consolidated Statements of Income.

Recently Adopted Accounting Pronouncements — Effective January 1, 2010, we adopted the Accounting
Standards related to “Improving Disclosures about Fair Value Measurements” for the portion of this standard that
is effective for interim and annual reporting periods beginning after December 15, 2009. The amendments in this
standard are intended to improve the disclosures around fair value measurements. This standard requires
disclosure of significant transfers in or out of Level 1 and Level 2 fair value measurements, as well as the reasons
for the transfers. It also clarifies existing disclosures related to the level of disaggregation in the disclosures, as
well as the required disclosures about inputs and valuation techniques. The adoption of this portion of the
standard has not had a material impact on our Consolidated Financial Statements. See Note 10. Additionally, a
portion of the standard is effective for interim and annual reporting periods beginning after December 15, 2010.
This portion requires disclosure of purchases, sales, issuances and settlements in the reconciliation of Level 3 fair
impact on our
value measurements. This portion of the standard is not anticipated to have a material
Consolidated Financial Statements.

Effective January 1, 2010, we adopted the Accounting Standards related to “Amendments to FASB
Interpretation No. 46(R)”. This standard changes how a company determines when an entity that is insufficiently
capitalized or is not controlled through voting (or similar rights) should be consolidated. The determination of
whether the company is required to consolidate an entity is based on, among other things, an entity’s purpose and

F-9

design and a company’s ability to direct the activities of the entity that most significantly impact the entity’s
economic performance. The adoption of this Accounting Standard did not change our accounting for our
investment in our Hero/WhiteWave joint venture. See Note 3.

Effective January 1, 2010, we adopted the Accounting Standards related to “Accounting for Transfer of
Financial Assets”. This standard requires more disclosure of information about transfers of financial assets,
including securitization transactions, and where companies have continuing exposure to the risk related to
transferred financial assets. It eliminates the concept of a “qualifying special-purpose entity”, changes the
requirements for derecognizing financial assets and requires special disclosures. The adoption of this Accounting
Standard did not have a material impact on our Consolidated Financial Statements.

Impact of New Federal Legislation — The Patient Protection and Affordable Care Act became law on
March 23, 2010, and on March 30, 2010 the Health Care and Education Reconciliation Act of 2010 became law.
The enactment of this legislation has not had, nor is it expected to have, a material impact on our Consolidated
Financial Statements.

2. DISCONTINUED OPERATIONS, DIVESTITURES AND ACQUISITIONS

Discontinued Operations

During the second quarter of 2010, we committed to a plan to sell the business operations of Rachel’s,
which provides organic branded dairy-based chilled yogurt, milk and related dairy products primarily in the
United Kingdom. We completed the sale of our Rachel’s business on August 4, 2010 and recognized a gain of
$5.7 million, net of tax. Our Rachel’s operations, previously reported within the WhiteWave-Alpro segment,
have been reclassified as discontinued operations in our Consolidated Financial Statements for the twelve-month
periods ended December 31, 2010, 2009 and 2008 and as of December 31, 2009.

The following is a summary of Rachel’s assets and liabilities held for sale as of December 31, 2009:

Assets

Current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property, plant and equipment, net . . . . . . . . . . . . . . . . . . . . . .
Goodwill, identifiable intangibles and other assets . . . . . . . . . .

Assets of discontinued operations held for sale . . . . . . . . . . . . . . . .

Liabilities

Accounts payable and accrued expenses . . . . . . . . . . . . . . . . . .
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Liabilities of discontinued operations held for sale . . . . . . . . . . . . .

December 31,
2009

(In thousands)

$11,514
6,626
11,948

$30,088

$ 5,156
3,889

$ 9,045

The following is a summary of Rachel’s operating results, which are included in discontinued operations:

Year Ended December 31

2010

2009

2008

(In thousands)

Operations:

Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$26,319

$44,606

$93,302

Income (loss) before income taxes . . . . . . . . . . . . . . .
Income tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3,783)
1,399

(642)
(220)

3,460
(507)

Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ (2,384)

$ (862)

$ 2,953

F-10

In 2010 and 2008, we recognized expense of $121,000 and income of $205,000, respectively, related to
prior discontinued operations. In 2010, 2009 and 2008, we recognized a gain of $1.8 million, a gain of $89,000
and a loss of $1.3 million, respectively, on the sale of prior discontinued operations.

Divestitures

In the fourth quarter of 2010, we entered into two separate agreements to sell our Mountain High and private
label yogurt operations, which are part of our Fresh Dairy Direct-Morningstar segment. We expect to record a
gain related to the sale of both of these operations. On February 1, 2011, we completed the sale of our Mountain
High yogurt operations. We expect our private label operations sale to close in the first half of 2011. These
operations did not meet the requirement to be accounted for as discounted operations. We intend to use the
proceeds from the sale of our yogurt operations to pay down outstanding debt under our senior secured credit
facility. See Note 9.

The following is a summary of our Mountain High and private label yogurt operations’ assets and liabilities

held for sale as of December 31, 2010:

December 31,
2010

(In thousands)

Assets

Current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property, plant and equipment, net . . . . . . . . . . . . . . . . . . . . . .
Goodwill, identifiable intangibles and other assets . . . . . . . . . .

$

8,329
26,346
82,439

Assets held for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$117,114

Liabilities

Accounts payable and accrued expenses . . . . . . . . . . . . . . . . . .

$

3,839

Acquisitions

Alpro — As discussed in Note 1, on July 2, 2009, we completed the acquisition of Alpro, a privately held
food company based in Belgium, for an aggregate purchase price of €314.6 million ($440.3 million), after
working capital adjustments, excluding transaction costs which were expensed as incurred. Alpro manufactures
and sells branded soy-based beverages and food products in Europe. The acquisition of Alpro has provided
opportunities to leverage the collective strengths of our combined businesses across a global soy beverages and
related products category.

Assets acquired and liabilities assumed in connection with the acquisition have been recorded at their fair
values. The fair values were determined by management based in part on an independent valuation of the net
assets acquired, which includes intangible assets of $117.6 million. Intangible assets subject to amortization of
$21.0 million are being amortized over a weighted-average period of 15 years and relate primarily to customer
relationships.

The excess of the net purchase price over the fair value of the net assets acquired of $175.1 million was
recorded as goodwill and represents a value attributable to an increased competitive position in the soy-based
beverages and foods in Europe. The goodwill is not deductible for tax purposes.

F-11

Identifiable assets acquired and liabilities assumed are as follows:

Current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Identifiable intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other long-term assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other long-term liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

July 2, 2009

(In thousands)
$ 103,050
195,477
175,100
117,627
34,079
(83,654)
(101,424)

Net identifiable assets acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 440,255

The final valuation of the assets acquired and liabilities assumed in this acquisition was completed in 2010.
Alpro’s results of operations have been included in our Consolidated Statements of Income and the results of
operations of our WhiteWave-Alpro segment from the date of acquisition. The pro-forma impact of the
acquisition on consolidated net earnings would not have materially changed our 2009 reported net earnings.

Other acquisitions — Excluding the acquisition of the Alpro division of Vandemoortele, N.V. (“Alpro”), we
completed the acquisition of several businesses during 2009 and 2008, for an aggregate purchase price of
approximately $143.5 million and $95.9 million, respectively. These acquisitions were not material individually
or in the aggregate, including the pro-forma impact on earnings. All of these acquisitions were funded with cash
flows from operations and borrowings under our senior secured credit facility and our receivables-backed
facility. The results of operations of the acquired companies are included in our Consolidated Financial
Statements subsequent to their respective acquisition dates. At the acquisition date, the purchase price was
allocated to assets acquired, including identifiable intangibles and liabilities assumed based on their estimated
fair market values. There were no acquisitions completed during 2010.

During the year ended December 31, 2010, we recorded expenses of approximately $9.8 million in
connection with the Rachel’s sale as well as other transactional activities. Of this amount, $3.6 million was
recorded in discontinued operations for the year ended December 31, 2010. During the year ended December 31,
2009, we recorded expenses of approximately $31.3 million in connection with our Alpro and Fresh Dairy
Direct-Morningstar acquisitions, as well as other transactional activities, which were recorded in general and
administrative expenses in our Consolidated Statements of Income.

3.

INVESTMENT IN AFFILIATES

Unconsolidated Affiliate and Related Party

Consolidated Container Company — We own an approximately 25% non-controlling interest, on a fully
diluted basis, in Consolidated Container Company (“CCC”), one of the nation’s largest manufacturers of rigid
plastic containers and our largest supplier of plastic bottles and bottle components. We have owned our minority
interest since July 2, 1999, when we sold our U.S. plastic packaging operations to CCC. Vestar Capital Partners,
an unaffiliated entity, controls CCC through a majority ownership interest. Pursuant to our agreements with
Vestar, we control two of the eight seats on CCC’s Management Committee.

Since July 2, 1999, our investment in CCC has been accounted for under the equity method of accounting.
During 2001, we concluded that our investment was permanently impaired so we wrote off our remaining
investment. Our investment in CCC has been recorded at zero value since then and is still generating no income
under the equity method of accounting. We have received no distributions from CCC since writing the
investment down in 2001. As the tax basis of our investment in CCC is calculated differently than the carrying
value of the investment recognized in our Consolidated Financial Statements, the sale or liquidation of our
investment, the timing of which may be beyond our control, could result in a significantly disproportionate tax
obligation.

F-12

We have supply agreements with CCC to purchase certain of our requirements for plastic bottles and bottle
components from CCC through December 31, 2011. We spent $314.9 million, $268.2 million and $330.3 million
on products purchased from CCC during the years ended December 31, 2010, 2009 and 2008, respectively. As of
December 31, 2010 and 2009, we had net payables to CCC of $12.8 million and $18.7 million.

Non-controlling Interest in Consolidated Affiliate

Hero/WhiteWave Joint Venture — In January 2008, we entered into and formed a 50/50 strategic joint
venture with Hero Group (“Hero”), a producer of international fruit and infant nutrition brands, as a strategic
growth platform for both companies to extend their global reach by leveraging their established innovation,
technology, manufacturing and distribution capabilities over time. The joint venture, Hero/WhiteWave, LLC,
which is based in Broomfield, Colorado, combines Hero’s expertise in fruit, innovation and process engineering
with WhiteWave’s deep understanding of the American consumer and distribution network, as well as the go-to-
market system of WhiteWave. In the second quarter of 2009, the joint venture introduced Fruit2Day to grocery
and club store channels in North America.

Beginning January 1, 2009, several new agreements, including a capital lease for plant assets constructed
within WhiteWave’s existing facilities and operating agreements that include the assignment of day to day
management responsibilities to WhiteWave, were entered into between WhiteWave and the joint venture. We
determined that this, along with the increased risk created by the capital expenditures and favorable lease terms
to the joint venture, as well as the benefit the new product line brings to WhiteWave’s existing customer
relationships, resulted in the decision that WhiteWave was the primary beneficiary of the variable interests. As
such, the financial position and the results of operations for the joint venture should be consolidated for financial
reporting purposes. Accordingly, the joint venture has been consolidated as of January 1, 2009. The resulting
non-controlling interest’s share in the equity of the joint venture is presented as a separate component of
stockholders’ equity in the Consolidated Balance Sheets and Consolidated Statements of Stockholders’ Equity
and the net loss attributable to the non-controlling interest is presented in the Consolidated Statements of Income.

During 2010 and 2009, our joint venture partner made cash contributions of $8.0 million and $12.7 million,
respectively, and non-cash contributions of $0.5 million in 2009 to the joint venture. Our joint venture partner did
not make any non-cash contributions in 2010. During 2010 and 2009, we made cash contributions of $8.8 million
and $10.5 million, respectively, and continued non-cash contributions in the form of the capital lease for the
manufacturing facility constructed at one of our existing WhiteWave plants. The joint venture has assets of
$26.6 million, primarily property, plant and equipment, and liabilities of $3.5 million, which are included within
the WhiteWave-Alpro segment.

4.

INVENTORIES

Inventories, net of reserves of $5.9 million at years ended December 31, 2010 and 2009, consisted of the

following:

Raw materials and supplies . . . . . . . . . . . . . . . . . . . . . . . .
Finished goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$187,176
238,400

$202,991
233,070

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$425,576

$436,061

December 31

2010

2009

(In thousands)

F-13

5.

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment at years ended December 31, 2010 and 2009 consisted of the following:

December 31

2010

2009

(In thousands)

Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Leasehold improvements . . . . . . . . . . . . . . . . . . . . .
Machinery and equipment
. . . . . . . . . . . . . . . . . . . .
Construction in progress . . . . . . . . . . . . . . . . . . . . . .

$

242,666
927,836
89,337
2,381,545
91,461

$

231,617
921,337
67,124
2,287,171
79,924

Less accumulated depreciation . . . . . . . . . . . . . . . . .

3,732,845
(1,619,454)

3,587,173
(1,484,920)

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 2,113,391

$ 2,102,253

For 2010 and 2009, we capitalized $1.4 million and $1.7 million in interest related to borrowings during the
construction period of major capital projects, which is included as part of the cost of the related asset. Other non-
cash additions to property, plant and equipment were $13.0 million in 2010. Other non-cash additions to
property, plant and equipment were not material in 2009 and 2008.

6. GOODWILL AND INTANGIBLE ASSETS

The changes in the carrying amount of goodwill for the years ended December 31, 2010 and 2009 are as

follows:

Balance at December 31, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquisitions and purchase accounting adjustments . . . . . . . . . . . . . . . .
Foreign currency translation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Balance at December 31, 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquisitions and purchase accounting adjustments . . . . . . . . . . . . . . . .
Foreign currency translation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill transferred to assets held for sale(3) . . . . . . . . . . . . . . . . . . . .

Fresh Dairy
Direct-
Morningstar(1)

$2,522,843
37,059
—

$2,559,902
(4,696)
—
(82,439)

WhiteWave-
Alpro(1)(2)

(In thousands)
$540,809
175,041
(2,938)

$712,912

—
(6,487)
—

Total

$3,063,652
212,100
(2,938)

$3,272,814
(4,696)
(6,487)
(82,439)

Balance at December 31, 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$2,472,767

$706,425

$3,179,192

(2)

(1) Due to changes in our reportable segments as discussed in Note 1, $336.3 million of goodwill was
transferred from WhiteWave-Alpro to Fresh Dairy Direct-Morningstar in the first quarter of 2010. Amounts
at December 31, 2009 and 2008 have been recast to reflect this change.
In the third quarter of 2010, $9.9 million of goodwill within the WhiteWave-Alpro segment attributable to
Rachel’s was sold. Amounts at December 31, 2009 and 2008 have been moved to assets held for sale to
reflect this change.
In the fourth quarter of 2010, we announced that we entered into agreements to sell our Mountain High and
private label yogurt operations. In connection with these planned divestitures, goodwill of $82.4 million has
been allocated to these operations and recorded as assets held for sale as of December 31, 2010.

(3)

F-14

The gross carrying amount and accumulated amortization of our intangible assets other than goodwill as of

December 31, 2010 and 2009 are as follows:

2010

Gross
Carrying
Amount

Accumulated
Amortization

December 31

Net
Carrying
Amount

Gross
Carrying
Amount

(In thousands)

2009

Accumulated
Amortization

Net
Carrying
Amount

Intangible assets with indefinite

lives:

Trademarks(1)(2)

. . . . . . . . . . .

$593,387

$ —

$593,387

$608,339

$ —

$608,339

Intangible assets with finite lives:

Customer-related and other . . . .
Trademarks . . . . . . . . . . . . . . . .

133,829
18,614

(44,622)
(4,474)

89,207
14,140

135,993
10,146

(35,737)
(1,940)

100,256
8,206

Total

. . . . . . . . . . . . . . . . . . . . . . . . .

$745,830

$(49,096)

$696,734

$754,478

$(37,677)

$716,801

(1) A trademark with a gross carrying amount of $7.5 million was moved from indefinite lived intangible assets
to finite lived intangible assets in the first quarter of 2010. The remaining decrease in the gross carrying
amount of intangible assets with indefinite lives is the result of foreign currency translation adjustments.
In the third quarter of 2010, $2.1 million of indefinite lived intangible assets attributable to Rachel’s were
sold. Amounts at December 31, 2009 have been moved to assets held for sale to reflect this change.

(2)

Amortization expense on intangible assets for the years ended December 31, 2010, 2009 and 2008 was
$11.3 million, $9.6 million and $9.8 million, respectively. Estimated aggregate intangible asset amortization
expense for the next five years is as follows:

2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $11.2 million
9.9 million
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.8 million
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.1 million
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.0 million
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Our goodwill and intangible assets have resulted from acquisitions. Upon acquisition, the purchase price is
first allocated to identifiable assets and liabilities, including trademarks and customer-related intangible assets,
with any remaining purchase price recorded as goodwill. Goodwill and trademarks with indefinite lives are not
amortized.

A trademark is recorded with an indefinite life if it has a history of strong sales and cash flow performance
that we expect to continue for the foreseeable future. If these perpetual trademark criteria are not met, the
trademarks are amortized over their expected useful lives. Determining the expected life of a trademark is based
on a number of factors including the competitive environment,
trademark history and anticipated future
trademark support.

We conduct impairment tests of goodwill and intangible assets with indefinite lives annually in the fourth
quarter or when circumstances arise that indicate a possible impairment might exist. If the fair value of an
evaluated asset is less than its book value, an impairment charge is recorded. Our reporting units are Fresh Dairy
Direct, WhiteWave, Morningstar and Alpro. We did not recognize any impairment charges related to goodwill
during 2010, 2009 or 2008.

Considerable management judgment is necessary to evaluate goodwill for impairment. We determine fair
value using widely acceptable valuation techniques including discounted cash flows, market multiples analyses
and relief from royalty analyses. Increasing our discount rates assumed in these analyses by 0.25% would not
have resulted in an impairment charge. Assumptions used in our valuations, such as forecasted growth rates and

F-15

our cost of capital, are consistent with our internal projections and operating plans. The terminal growth rates
utilized in calculating the fair value of our reporting units (ranging from 1.8% to 3.5%) is also dependent upon
meeting our internal projections and operating plans, as well as other factors and assumptions. A 0.25%
reduction in the terminal growth rate assumptions used could result in a material impairment charge.

Based on our analysis performed in the fourth quarter of 2010, each of our reporting units tested had fair
values in excess of book values by approximately $229 million or 6.4%, $367 million or 65.1%, $856 million or
80.4% and $33 million or 7.8% for Fresh Dairy Direct, Morningstar, WhiteWave and Alpro, respectively. The
sum of the fair values of our reporting units was in excess of our market capitalization. We believe that the
difference between the fair value and market capitalization is reasonable (in the context of assessing whether any
asset impairment exists) when market-based control premiums are taken into consideration. While the results of
our testing indicate that each of our reporting units has a fair value in excess of its carrying value and no
impairment charge was required; the excess of the reporting unit fair values over carrying values, specifically
with respect to our Fresh Dairy Direct reporting unit, is significantly less than in prior years. We can provide no
assurance that we will not have an impairment charge in future periods as a result of changes in our operating
results or our assumptions.

While the results of our testing indicate that each of our reporting units has a fair value in excess of its
carrying value and no impairment charge was required; the excess of the reporting unit fair values over carrying
values, specifically with respect to our Fresh Dairy Direct reporting unit, is significantly less than in prior years.
While testing results do not indicate an impairment charge, we can provide no assurance that we will not have an
impairment charge in future periods as a result of changes in our operating results.

The sum of the fair values of our reporting units was in excess of our market capitalization. We believe that
the difference between the fair value and market capitalization is reasonable (in the context of assessing whether
any asset impairment exists) when market-based control premiums are taken into consideration.

In 2009, we recognized an impairment charge of $0.5 million in Fresh Dairy Direct related to a perpetual
trademark for a regional brand due to projected declining annualized sales volumes and profitability. This
trademark was no longer deemed to have a perpetual life and therefore is amortized over its estimated remaining
life. In 2008, we recognized an impairment charge of $2.3 million related to three perpetual trademarks for
regional brands in Fresh Dairy Direct. The write-downs were the result of lower annualized sales volumes from
certain facilities partly related to movement of production between regional brands. These trademarks were no
longer deemed to have a perpetual life and are being amortized over their respective estimated remaining lives.

Amortizable intangible assets are only evaluated for impairment upon a significant change in the operating
environment. If an evaluation of the undiscounted cash flows indicates impairment, the asset is written down to
its estimated fair value, which is generally based on discounted future cash flows.

7. ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses for the years ended December 31, 2010 and 2009 consisted of the

following:

December 31

2010

2009

(In thousands)

Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payroll and benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Health insurance, workers’ compensation and other insurance costs . . . . .
Current derivative liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 782,185
131,177
74,934
60,326
214,254

$ 699,040
176,811
83,812
90,194
175,160

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$1,262,876

$1,225,017

F-16

8.

INCOME TAXES

The following table presents the 2010, 2009 and 2008 provisions for income taxes:

Year Ended December 31

2010(1)

2009(2)

2008 (3)

Federal
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . .

$ (48,528)
1,704
2,050
118,256

(In thousands)
$ 94,190
15,060
3,295
39,300

$ 39,651
9,605
629
64,445

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 73,482

$151,845

$114,330

(1) Excludes $8.7 million in income tax benefit related to discontinued operations.
(2) Excludes $0.3 million in income tax benefit related to discontinued operations.
(3) Excludes $0.4 million in income tax benefit related to discontinued operations.

The following table presents the 2010, 2009 and 2008 income from continuing operations before income

taxes for our domestic and foreign operations:

United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other Countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$127,934
23,288

(In thousands)
$370,642
9,823

$293,107
3,110

Total income from continuing operations before income

taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$151,222

$380,465

$296,217

Year Ended December 31

2010

2009

2008

The following is a reconciliation of income taxes computed at the U.S. federal statutory tax rate to income

taxes reported in the Consolidated Statements of Income:

Tax expense at statutory rate . . . . . . . . . . . .
State income taxes . . . . . . . . . . . . . . . . . . . .
Foreign taxes versus U.S. statutory rate . . .
Deferred tax asset adjustment . . . . . . . . . . .
Exclusion of non-controlling interest tax

benefit . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nondeductible compensation . . . . . . . . . . .
Corporate owned life insurance . . . . . . . . .
Audit settlements . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Year Ended December 31

2010

2009

2008

Amount

Percentage

Amount

Percentage

Amount

Percentage

(In thousands, except percentages)

$52,928
5,855
(4,792)
10,848

35.0% $133,163
14,476
3.9
884
(3.2)
—
7.2

35.0% $103,676
4,422
3.8
(459)
0.2
—
—

3,057
2,713
(926)
(1,910)
5,709

2.0
1.8
(0.6)
(1.3)
3.8

4,876
3,434
(1,839)
(1,289)
(1,860)

1.3
0.9
(0.5)
(0.3)
(0.5)

—
4,796
4,025
(5,616)
3,486

35.0%
1.5
(0.2)
—

—
1.6
1.4
(1.9)
1.2

Total

. . . . . . . . . . . . . . . . . . . . . . . . . .

$73,482

48.6% $151,845

39.9% $114,330

38.6%

In 2010, we identified unrecoverable deferred tax asset balances associated with errors primarily related to
periods prior to 2007. Since the effects of the errors are not material to the financial results for the year ending
December 31, 2010 and were not material to any individual year prior to 2010, we adjusted our deferred tax
assets and recorded a non-cash income tax charge of $10.8 million.

F-17

The tax effects of temporary differences giving rise to deferred income tax assets (liabilities) were:

Deferred income tax assets:

Accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . .
Retirement plans and postretirement benefits . . . .
Share-based compensation . . . . . . . . . . . . . . . . . . .
Receivables and inventories . . . . . . . . . . . . . . . . . .
Derivative instruments . . . . . . . . . . . . . . . . . . . . . .
Net operating loss carryforwards . . . . . . . . . . . . . .
State and foreign tax credits . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Valuation allowances . . . . . . . . . . . . . . . . . . . . . . .

Deferred income tax liabilities:

Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property, plant and equipment
. . . . . . . . . . . . . . . .
Investment in unconsolidated affiliates . . . . . . . . .

December 31

2010(1)

2009(2)

(In thousands)

$ 128,469
38,324
45,091
26,218
24,866
28,902
11,143
3,774
(7,660)

$ 118,756
52,418
42,485
23,698
45,880
28,377
14,244
6,310
(9,108)

299,127

323,060

(550,197)
(342,824)
(21,167)

(496,586)
(268,942)
(22,698)

(914,188)

(788,226)

Net deferred income tax liability . . . . . . . . . . . . . .

$(615,061)

$(465,166)

(1)
(2)

Includes $14.3 million of deferred tax assets related to uncertain tax positions.
Includes $20.6 million of deferred tax assets related to uncertain tax positions.

These net deferred income tax assets (liabilities) are classified in our Consolidated Balance Sheets as

follows:

Current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Noncurrent liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 141,653
(756,714)

$ 154,927
(620,093)

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$(615,061)

$(465,166)

December 31

2010

2009

(In thousands)

At December 31, 2010, we had $28.9 million of state and foreign net operating loss carryforwards and $11.1
million of state and foreign tax credits available for carryover to future years. These items are subject to certain
limitations and begin to expire in 2011. A valuation allowance of $7.7 million has been established because we
do not believe it is more likely than not that all of the deferred tax assets related to state and foreign net operating
loss carryforwards, state credit carryforwards and foreign tax credit carryforwards will be realized prior to
expiration. Our valuation allowance decreased $1.4 million in 2010 for foreign tax credits which expired,
partially offset by the expected nonrealization of certain state net operating loss and credit carryforwards and
certain foreign net operating loss carryforwards.

F-18

The following is a reconciliation of gross unrecognized tax benefits, including interest, recorded in our

Consolidated Balance Sheets:

Balance at beginning of year . . . . . . . . . . . . . . . . . . . . . .
Increases in tax positions for current year . . . . . . . .
Increases in tax positions for prior years . . . . . . . . .
Acquired increases in tax positions for prior

2010

$ 72,611
1,245
7,857

December 31

2009
(In thousands)
$41,400
5,204
5,641

2008

$ 46,089
4,196
3,387

years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Decreases in tax positions for prior years . . . . . . . .
Settlement of tax matters . . . . . . . . . . . . . . . . . . . . .
Lapse of applicable statutes of limitations . . . . . . .

—
(18,295)
(3,884)
(1,369)

31,019
(4,181)
(5,249)
(1,223)

—
(10,834)
(400)
(1,038)

Balance at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 58,165

$72,611

$ 41,400

These unrecognized tax benefits are classified in our Consolidated Balance Sheets as follows:

December 31

2010

2009

2008

Accrued expenses . . . . . . . . . . . . . . . . . . . . . .
Other long-term liabilities . . . . . . . . . . . . . . . .

$ 5,620
52,545

(In thousands)
$ 3,333
69,278

$ —
41,400

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 58,165

$ 72,611

$ 41,400

Of the balance at December 31, 2010, $18.0 million would impact our effective tax rate, $0.2 million would
be recorded in discontinued operations, and $25.7 million would be offset by tax benefits associated with
potential transfer pricing adjustments, if recognized. The remaining $14.3 million represents tax positions for
which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such
deductibility. Due to the impact of deferred income tax accounting, the disallowance of the shorter deductibility
period would not affect our effective tax rate but would accelerate payment of cash to the applicable taxing
authority. We do not expect any material changes to our liability for uncertain tax positions during the next
12 months.

We recognize accrued interest related to uncertain tax positions as a component of income tax expense.
Penalties, if incurred, are recognized as a component of operating income. Income tax expense for 2010, 2009
and 2008 included interest expense, net of tax of ($1.6) million, $1.1 million and $(0.6) million, respectively. Our
liability for uncertain tax positions included accrued interest of $4.9 million and $8.5 million at December 31,
2010 and 2009, respectively.

As of December 31, 2010, our 2007 to 2009 tax years remain subject to examination in our major
jurisdictions. The statute on our 2006 U.S. federal income tax return remains open until the first quarter of 2011.
State income tax returns are generally subject to examination for a period of three to five years after filing. We
have various state and foreign income tax returns in the process of examination, appeals, or settlement.

F-19

9. DEBT

December 31

2010

2009

Amount
Outstanding

Interest Rate

Amount
Outstanding

Interest
Rate

(In thousands, except percentages)

Dean Foods Company debt obligations:

Senior secured credit facility . . . . . . . . . . .
Senior notes due 2016 . . . . . . . . . . . . . . . . .
Senior notes due 2018 . . . . . . . . . . . . . . . . .

Subsidiary debt obligations:

Senior notes . . . . . . . . . . . . . . . . . . . . . . . . .
Receivables-backed facility . . . . . . . . . . . .
Capital lease obligations and other . . . . . . .
Alpro revolving credit facility . . . . . . . . . .

Less current portion . . . . . . . . . . . . . .

$3,033,529
498,765
400,000

3,932,294

127,504
—
7,727
—

135,231

4,067,525
(174,250)

Total long-term portion . . . . . . . .

$3,893,275

2.96%*
7.00
9.75

$3,596,950
498,584
—

4,095,534

1.25%*
7.00

6.90
—

—

6.90
2.00

3.41

126,027
—
7,418
—

133,445

4,228,979
(248,352)

$3,980,627

* Represents a weighted average rate as of December 31, 2010, including applicable interest rate margins, for
the senior secured revolving credit facility, term loan A and term loan B. See schedule of interest rates in
effect at December 31, 2010 below.

The scheduled maturities of long-term debt, at December 31, 2010, were as follows (in thousands):

Total

Term Loan A

Term Loan B

Other*

2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 174,250
291,074
232,080
1,337,727
10,535
2,037,590

$149,866
204,926
213,975
276,384

—
—

$

17,674
17,675
17,675
676,229
10,535
995,590

Subtotal
. . . . . . . . . . . . . . . . . . . . . . .
Less discounts . . . . . . . . . . . . . . . . . .

4,083,256
(15,731)

845,151

1,735,378

—

—

$

6,710
68,473
430
385,114
—

1,042,000

1,502,727
(15,731)

Total outstanding debt . . . . . . . . . . . .

$4,067,525

$845,151

$1,735,378

$1,486,996

* Includes our revolving credit facility, Dean Foods Company senior notes, subsidiary senior notes, capital lease

obligations and other debt.

Senior Secured Credit Facility — On June 30, 2010, we amended and restated the credit agreement
governing our $1.5 billion 5-year senior secured revolving credit facility, our original $1.5 billion 5-year senior
secured term loan A and our original $1.8 billion 7-year senior secured term loan B. We further amended this
agreement on December 9, 2010. The terms of this agreement were modified in the aggregate as follows:

• Extension of the maturity dates for certain principal amounts as summarized in the key terms table

below;

F-20

• Amendment of the maximum permitted leverage ratio and minimum interest coverage ratio, and the
addition of a senior secured leverage ratio (each as defined in our credit agreement) to permit minimum
and maximum ratios of:

For Quarters Ending During the Period

Amendment effective date — December 31, 2011
March 31, 2012 — December 31, 2012
March 31, 2013 — June 30, 2013
September 30, 2013 and thereafter

Minimum Interest
Coverage Ratio

Maximum Leverage
Ratio

Maximum Senior
Secured Leverage
Ratio

2.50
2.75
3.00
3.00

5.75
5.50
5.25
4.50

4.25
3.75
3.50
3.50

• Amendment of certain other terms, including, but not limited to, leverage-based limitations on the
payment of dividends and other restricted payments, acquisitions and prepayments of senior notes; and

•

Increase in the undrawn costs of the extended portion of the revolving credit facility and the drawn
costs of the extended portions of the revolving credit facility, term loan A and term loan B.

The following table summarizes the key terms of the senior secured credit facility as of December 31, 2010:

Revolving Credit Facility

Term Loan A

Term Loan B

Principal(2) Maturity Date

Applicable Base
Rate Margin(3)

Applicable LIBOR
Rate Margin(3)

Quarterly
Commitment Fee on
Undrawn Amounts

0.00% – 0.75% 0.625% – 1.75% 0.125% – 0.375%
$225 million April 2, 2012
1.00% – 2.25% 2.00% – 3.25% 0.375% – 0.500%
$1.28 billion April 2, 2014
0.00% – 0.75% 0.625% – 1.75%
$150 million April 2, 2012
1.00% – 2.25% 2.00% – 3.25%
$695 million April 2, 2014
0.375% – 0.75% 1.375% – 1.75%
$687 million April 2, 2014
$490 million April 2, 2016
2.00% – 2.25% 3.00% – 3.25%
$558 million April 2, 2017(1) 2.25% – 2.50% 3.25% – 3.50%

—
—
—
—
—

(1) Subject

to the condition that we meet certain leverage, debt, cash or credit rating tests following
December 31, 2015. However, if at least one of these tests is not met, the maturity date will be April 2,
2016.

(2) Amounts for term loan A and term loan B represent outstanding principal balances as of December 31,
2010. The revolving credit facility principal amount represents the total original borrowings available to us
under the facility.

(3) The senior secured credit facility bears interest, at our election, at the Alternative Base Rate (as defined in
our credit agreement) plus a margin depending on our leverage ratio or LIBOR plus a margin depending on
our leverage ratio. Interest is payable quarterly or after the end of the applicable interest period.

The senior secured revolving credit facility is available for the issuance of up to $350 million of letters of
credit and up to $150 million of swing line loans. No principal payments are due on the revolving credit facility
until April 2, 2012, at which time any principal borrowings on a pro rata basis related to the $225 million of
non-extended revolving credit facility commitments would become payable. No principal payments are due on
the remaining $1.275 billion of extended revolving credit facility commitment until April 2, 2014. The credit
agreement requires mandatory principal prepayments upon the occurrence of certain asset sales (provided that
such sales, in total, exceed $250 million in any fiscal year), recovery events, or as a result of exceeding certain
leverage limits.

As discussed in Note 2, on February 1, 2011, we completed the sale of our Mountain High yogurt
operations. We used the proceeds to pay down a portion of the outstanding 2012 tranche A term loan borrowings.
We intend to use the proceeds from the sale of our private label yogurt operations, which is expected to be
completed in the first half of 2011, for additional debt repayments.

F-21

Our credit agreement permits us to complete acquisitions that meet all of the following conditions without
obtaining prior approval: (1) the acquired company is involved in the manufacture, processing and distribution of
food or packaging products or any other line of business in which we were engaged as of April 2007, (2) the net
cash purchase price for any single acquisition is not greater than $500 million and not greater than $100 million
if our leverage ratio is greater than 4.50 times, (3) we acquire at least 51% of the acquired entity, (4) the
transaction is approved by the board of directors or shareholders, as appropriate, of the target and (5) after giving
effect to such acquisition on a pro-forma basis, we would have been in compliance with all financial covenants.
All other acquisitions must be approved in advance by the required lenders.

The senior secured credit facility contains limitations on liens, investments and the incurrence of additional
indebtedness, prohibits certain dispositions of property and restricts certain payments, including dividends. There
are no restrictions on these certain payments, including dividends, when our leverage ratio is below 4.50 times.
The senior secured credit facility is secured by liens on substantially all of our domestic assets including the
assets of our subsidiaries, but excluding the capital stock of subsidiaries of the former Dean Foods Company
(“Legacy Dean”), and the real property owned by Legacy Dean and its subsidiaries.

The credit agreement contains standard default triggers, including without limitation: failure to maintain
compliance with the financial and other covenants contained in the credit agreement, default on certain of our
other debt, a change in control and certain other material adverse changes in our business. The credit agreement
does not contain any requirements to maintain specific credit rating levels, except as described above with
respect to determining the maturity date for the 2017 tranche of term loan B.

We are currently in compliance with all financial covenants, and based on our internal projections we expect

to maintain such compliance for the foreseeable future.

At December 31, 2010, there were outstanding borrowings of $3.0 billion under our senior secured credit
facility, which consisted of $2.6 billion in term loan borrowings and $453 million drawn under the revolver. At
December 31, 2010, there were $171.3 million of letters of credit under the revolving line that were issued but
undrawn. As of February 24, 2011, $106.2 million was borrowed under our senior secured revolving credit
facility.

We incurred financing costs of $34.2 million in connection with the completion of the amended and restated
senior secured credit facility on June 30, 2010, of which $6.7 million was expensed in the second quarter of
2010. The capitalized deferred financing costs will be recorded as interest expense over the terms of their
applicable instrument under the credit facility.

In connection with the December 9, 2010 amendment to our credit facility, we incurred financing costs of
approximately $8.8 million, of which $1.9 million was expensed in the fourth quarter of 2010. Additionally, as a
result of this amendment and reduction of principal, $3.7 million in previously deferred financing costs related to
the senior secured credit facility were written off in the fourth quarter of 2010. The remaining financing costs
related to the amendment were deferred and capitalized and will be recorded as interest expense over the terms of
their applicable instrument under the credit facility.

Receivables-Backed Facility — We have a $600 million receivables securitization facility pursuant to which
certain of our subsidiaries sell their accounts receivable to four wholly-owned entities intended to be bankruptcy-
remote. The entities then transfer the receivables to third-party asset-backed commercial paper conduits
sponsored by major financial institutions. The assets and liabilities of these four entities are fully reflected in our
Consolidated Balance Sheets, and the securitization is treated as a borrowing for accounting purposes.

On June 30, 2010, we amended the maximum leverage ratio covenant to permit a maximum leverage ratio
of 5.50 from June 30, 2010 to March 31, 2011; 5.00 from June 30, 2011 to September 30, 2012; and 4.50 from
December 31, 2012 thereafter. We also amended certain other terms, including, but not limited to, changes in the
maximum purchase interest percentage and loss reserve floor; as well as extending the termination date of the
364-day facility to June 29, 2011. As a result of the amendment we incurred fees of approximately $0.6 million.

F-22

On December 9, 2010, we further amended the maximum leverage ratio covenant to be consistent with the
leverage ratios under our senior secured credit facility, including the addition of a senior secured leverage ratio to
the agreement, as described above. Additionally, we amended certain other terms, including, but not limited to,
extension of the maturity termination date of the facility to September 30, 2011; as well as changes in the
maximum purchase interest percentage and loss reserve floor. As a result of this amendment, we incurred fees of
approximately $0.6 million.

During 2010, we borrowed and subsequently repaid $2.5 billion under this facility with no remaining
balance at December 31, 2010. The total value of receivables sold to these entities as of December 31, 2010 was
$817.5 million. The receivables-backed facility bears interest at a variable rate based upon commercial paper
rates plus an applicable margin. Our average daily balance under this facility during 2010 was $175.3 million.
Our ability to borrow under this facility is subject to a monthly borrowing base formula. This facility had $496.5
million of availability as of December 31, 2010, based on this formula.

Dean Foods Company Senior Notes due 2018 – On December 16, 2010, in connection with the December 9,
2010 amendment to our senior secured credit facility discussed above, we issued $400 million aggregate
principal amount of 9.75% senior unsecured notes. The senior notes were sold in a private placement to qualified
institutional buyers and in offshore transactions, and have not been registered under the Securities Act of 1933.
These notes are our senior unsecured obligations and mature on December 15, 2018 with interest payable on
June 15 and December 15 of each year, commencing June 15, 2011.

In connection with the offering of the senior notes, we also entered into a registration rights agreement dated
as of December 16, 2010. Under the registration rights agreement, we agreed to file with the SEC a registration
statement with respect to an offer to exchange the senior notes for identical new notes (except that the new notes
will not be subject to restrictions on transfer) registered under the Securities Act of 1933. Under the registration
rights agreement, we may also be required to provide a shelf registration statement to cover resales of the senior
notes under certain circumstances. If we fail to satisfy our obligations under the registration rights agreement, we
may be required to pay special interest on the senior notes, up to a maximum amount of 1.0% per annum of the
principal amount of the senior notes entitled to such registration rights then outstanding.

We incurred fees and expenses related to the senior notes offering of $9.1 million, which were capitalized
during the fourth quarter of 2010 and will be amortized as interest expense over the term of the notes. We used
the net proceeds from the offering to pay down a portion of the outstanding 2014 tranche A term loan borrowings
under our senior secured credit facility and to pay fees and expenses related to the amendment of our credit
facility, as discussed above. The indenture under which we issued the senior unsecured notes does not contain
financial covenants but does contain covenants that, among other things, limit our ability to incur certain
indebtedness, enter into sale-leaseback transactions and engage in mergers, consolidations and sales of all or
substantially all of our assets. The outstanding balance of these notes at December 31, 2010 was $400 million.

Dean Foods Company Senior Notes due 2016 — On May 17, 2006, we issued $500 million aggregate
principal amount of 7.0% senior unsecured notes. The senior unsecured notes mature on June 1, 2016 and interest
is payable on June 1 and December 1 of each year, beginning December 1, 2006. The indenture under which we
issued the senior unsecured notes does not contain financial covenants but does contain covenants that, among
other things, limit our ability to incur certain indebtedness, enter into sale-leaseback transactions and engage in
mergers, consolidations and sales of all or substantially all of our assets. The outstanding balance at
December 31, 2010 was $498.8 million.

Subsidiary Senior Notes — The former Dean Foods Company (“Legacy Dean”) had certain senior notes
outstanding at the time of its acquisition, of which one series ($150 million face value) remains outstanding with
a maturity date of October 15, 2017. During the third quarter of 2009, we repurchased in the open market $8.0
million of these subsidiary senior notes and recognized an immaterial book loss. The balance of these
outstanding notes is $127.5 million at December 31, 2010 at 6.9% interest. During the fourth quarter of 2008, we

F-23

repurchased in the open market, $77.0 million of Legacy Dean’s subsidiary senior notes that were to mature on
May 15, 2009. Additionally, the net proceeds of our equity offering in May 2009 were used in part to repay the
remaining balance of $122.8 million of these senior notes upon maturity.

The related indentures do not contain financial covenants but they do contain certain restrictions, including a
prohibition against Legacy Dean and its subsidiaries granting liens on certain of their real property interests and a
prohibition against Legacy Dean granting liens on the stock of its subsidiaries. The subsidiary senior notes are
not guaranteed by Dean Foods Company or Legacy Dean’s wholly owned subsidiaries.

Capital Lease Obligations and Other — Capital lease obligations and other subsidiary debt includes various
promissory notes for financing current year property and casualty insurance premiums, as well as the purchase of
property, plant and equipment and capital lease obligations. The various promissory notes payable provide for
interest at varying rates and are payable in monthly installments of principal and interest until maturity, when the
remaining principal balances are due. Capital lease obligations represent machinery and equipment financing
obligations, which are payable in monthly installments of principal and interest and are collateralized by the
related assets financed. See Note 18.

Alpro Revolving Credit Facility — On July 2, 2009, our newly acquired subsidiary, Alpro N.V. entered into
a two year multi-currency revolving credit facility for borrowings in an amount not to exceed €20 million (or its
currency equivalent). In December of 2009, we reduced the facility to an amount not to exceed €10 million (or its
currency equivalent), and in December 2010 we further reduced the facility to an amount not to exceed
€1 million (or its currency equivalent). The facility is unsecured and is guaranteed by Dean Foods Company and
various Alpro N.V. subsidiaries. Use of proceeds under the facility is for working capital and other general
corporate purposes of Alpro N.V. The subsidiary revolving credit facility will be available for the issuance of up
to €1 million of letters of credit. No principal payments are due under the subsidiary revolving credit facility until
maturity on July 2, 2011. At December 31, 2010, there were no outstanding borrowings under the facility.

Interest Rate Agreements — See Note 10 for information related to interest rate swap arrangements

associated with our debt.

Guarantor Information — On May 17, 2006, we issued $500 million aggregate principal amount of
7.0% senior notes due 2016, and on December 16, 2010, we issued $400 million aggregate principal amount of
9.75% senior notes due 2018. Both the 2016 and 2018 senior notes are unsecured obligations and are fully and
unconditionally, joint and severally guaranteed by substantially all of our wholly-owned U.S. subsidiaries other
than our receivables securitization subsidiaries.

F-24

The following condensed consolidating financial statements present

the financial position, results of
operations and cash flows of Dean Foods Company (“Parent”), the wholly-owned subsidiary guarantors of the
2016 and 2018 senior notes and separately the combined results of the wholly-owned subsidiaries that are not a
party to the guarantees. The wholly-owned non-guarantor subsidiaries reflect foreign and certain other
operations, including our Hero joint venture, in addition to our three receivables securitization subsidiaries. We
do not allocate interest expense from the receivables-backed facility to the three receivables securitization
subsidiaries. Therefore, the interest costs related to this facility are reflected within the guarantor financial
information presented.

Condensed Consolidating Balance Sheet as of December 31, 2010

Parent

Guarantor
Subsidiaries

ASSETS
Current assets:

$

Cash and cash equivalents . . . . . . . .
Receivables, net . . . . . . . . . . . . . . . .
Income tax receivable . . . . . . . . . . .
Inventories . . . . . . . . . . . . . . . . . . . .
Intercompany receivables . . . . . . . .
Other current assets . . . . . . . . . . . . .
Assets held for sale . . . . . . . . . . . . .

$

307
353
71,173
—
193,051
105,345
—

Total current assets . . . . . . . . .
Property, plant and equipment, net
. . . . .
. . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill
Identifiable intangible and other assets . .
Investment in subsidiaries . . . . . . . . . . . .

370,229
222
—
88,135
9,335,787

9,750
33,941
—
394,862
4,211,670
96,967
117,114

4,864,304
1,900,192
3,013,516
616,435

—

Non-
Guarantor
Subsidiaries

(In thousands)

$

81,950
856,725
164
30,714
13,924
16,851
—

1,000,328
212,977
165,676
143,298

Eliminations

Consolidated
Totals

$

— $
—
—
—

(4,418,645)

—
—

(4,418,645)

—
—
—

92,007
891,019
71,337
425,576
—
219,163
117,114

1,816,216
2,113,391
3,179,192
847,868

—

(9,335,787)

—

Total . . . . . . . . . . . . . . . . . . . . .

$9,794,373

$10,394,447

$1,522,279

$(13,754,432) $7,956,667

LIABILITIES AND

STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable and accrued

expenses . . . . . . . . . . . . . . . . . . . .
Intercompany payables . . . . . . . . . .
Current portion of long-term debt . .
Liabilities of disposal groups held

for sale . . . . . . . . . . . . . . . . . . . . .

$ 168,869
3,568,750
167,540

$ 1,014,819
21,586
6,454

$

79,188
828,309
256

$

(4,418,645)

— $1,262,876
—
174,250

—

—

3,839

—

—

3,839

Total current liabilities . . . . . . .
Long-term debt . . . . . . . . . . . . . . . . . . . . .
Other long-term liabilities . . . . . . . . . . . .
Dean Foods stockholders’ equity . . . . . . .
Non-controlling interest . . . . . . . . . . . . . .

3,905,159
3,764,754
624,935
1,499,525
—

1,046,698
127,892
379,017
8,840,840

—

Total Stockholders’ equity . . . .

1,499,525

8,840,840

907,753
629
104,407
494,947
14,543

509,490

(4,418,645)

—
—

(9,335,787)

—

1,440,965
3,893,275
1,108,359
1,499,525
14,543

(9,335,787)

1,514,068

Total . . . . . . . . . . . . . . . . . . . . .

$9,794,373

$10,394,447

$1,522,279

$(13,754,432) $7,956,667

F-25

Condensed Consolidating Balance Sheet as of December 31, 2009

Parent

Guarantor
Subsidiaries

Non-
Guarantor
Subsidiaries

(In thousands)

Eliminations

Consolidated
Totals

ASSETS
Current assets:

$

Cash and cash equivalents . . . . . . .
Receivables, net . . . . . . . . . . . . . . .
Income tax receivable . . . . . . . . . .
Inventories . . . . . . . . . . . . . . . . . . .
Intercompany receivables . . . . . . .
Other current assets . . . . . . . . . . . .
Assets held for sale . . . . . . . . . . . .

Total current assets . . . . . . . .
. . . .
. . . . . . . . . . . . . . . . . . . . . . . .

Property, plant and equipment, net
Goodwill
Identifiable intangible and other

assets . . . . . . . . . . . . . . . . . . . . . . . . .
Investment in subsidiaries . . . . . . . . . . .

9,665
469
19,329
—
2,252,463
155,267
—

2,437,193
500
—

50,796
9,009,741

$

— $

35,001
—
408,431
5,325,673
71,277
—

5,840,382
1,868,458
3,100,652

35,525
836,363
105
27,630
723,109
18,444
30,088

1,671,264
233,295
172,162

616,616
—

153,868
—

$

— $
—
—
—

(8,301,245)

—
—

(8,301,245)

—
—

—

(9,009,741)

45,190
871,833
19,434
436,061
—
244,988
30,088

1,647,594
2,102,253
3,272,814

821,280
—

Total . . . . . . . . . . . . . . . . . . . .

$11,498,230

$11,426,108

$2,230,589

$(17,310,986) $7,843,941

LIABILITIES AND

STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable and accrued

expenses . . . . . . . . . . . . . . . . . . .
Intercompany payables . . . . . . . . .
Current portion of long-term

$

214,717
5,278,204

$

930,933
1,520,421

$

79,367
1,502,620

$

— $1,225,017
—

(8,301,245)

debt . . . . . . . . . . . . . . . . . . . . . . .

243,000

4,843

509

Liabilities of disposal groups held

for sale . . . . . . . . . . . . . . . . . . . .

—

—

9,045

—

—

Total current liabilities . . . . . .
Long-term debt . . . . . . . . . . . . . . . . . . . .
Other long-term liabilities . . . . . . . . . . .
Dean Foods stockholders’ equity . . . . . .
Non-controlling interest . . . . . . . . . . . . .

5,735,921
3,852,533
557,830
1,351,946
—

2,456,197
127,573
345,087
8,497,251

—

1,591,541
521
110,751
512,490
15,286

(8,301,245)

—
—

(9,009,741)

—

248,352

9,045

1,482,414
3,980,627
1,013,668
1,351,946
15,286

Total Stockholders’ equity . . .

1,351,946

8,497,251

527,776

(9,009,741)

1,367,232

Total . . . . . . . . . . . . . . . . . . . .

$11,498,230

$11,426,108

$2,230,589

$(17,310,986) $7,843,941

F-26

Condensed Consolidating Statements of Income for
the Year Ended December 31, 2010

Parent

Guarantor
Subsidiaries

Non-
Guarantor
Subsidiaries Eliminations

Consolidated
Totals

(In thousands)

Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

— $11,760,772 $362,115 $
—

8,905,747

211,218

— $12,122,887
9,116,965
—

Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selling and distribution . . . . . . . . . . . . . . . . .
General and administrative . . . . . . . . . . . . . .
Facility closing and reorganization costs . . .
Other operating expenses . . . . . . . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . . . . . . .
Other (income) expense, net . . . . . . . . . . . . .
Income from subsidiaries . . . . . . . . . . . . . . .

—
—
7,924
—
—
237,037
(7,909)
(388,274)

2,855,025
1,807,075
584,982
30,761
30,000
10,598
8,948
—

150,897
97,451
48,045
—
—
666
(878)
—

—
—
—
—
—
—
—

388,274

3,005,922
1,904,526
640,951
30,761
30,000
248,301
161
0

Income (loss) from continuing operations before

income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Income (loss) from continuing operations’ . . . . . .
Income (loss) from discontinued operations, net

151,222
73,482

77,740

382,661
185,947

196,714

5,613
25

5,588

(388,274)
(185,972)

(202,302)

151,222
73,482

77,740

of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2,505)

Gain (loss) on sale of discontinued operations,

net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . .
Net loss attributable to non-controlling

7,521

82,756

—

—

(2,505)

2,505

(2,505)

7,521

(7,521)

196,714

10,604

(207,318)

7,521

82,756

interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8,735

—

8,735

(8,735)

8,735

Net income (loss) attributable to Dean Foods

Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 91,491 $

196,714 $ 19,339 $(216,053) $

91,491

F-27

Condensed Consolidating Statements of Income for
the Year Ended December 31, 2009

Parent

Guarantor
Subsidiaries

Non-
Guarantor
Subsidiaries Eliminations

Consolidated
Totals

Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . .

$

— $10,928,250
7,896,766
—

(In thousands)
$185,532
111,795

$

— $11,113,782
8,008,561
—

Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . .
Selling and distribution . . . . . . . . . . . . .
General and administrative . . . . . . . . . .
Facility closing and reorganization

—
—
18,287

3,031,484
1,752,829
591,569

73,737
66,004
23,616

costs . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . . .
Other (income) expense, net . . . . . . . . .
Income from subsidiaries . . . . . . . . . . .

—
230,454
(22,468)
(606,738)

30,162
14,912
19,060
—

—
1,144
(813)
—

—
—
—

—
—
—

606,738

Income (loss) from continuing operations

before income taxes . . . . . . . . . . . . . . . . .
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . .

Income (loss) from continuing operations . .
Gain on sale of discontinued operations, net
of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Loss from discontinued operations, net of

380,465
151,845

228,620

89

tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(862)

622,952
248,622

(16,214)
(2,176)

(606,738)
(246,446)

374,330

(14,038)

(360,292)

89

—

—

(862)

(89)

862

3,105,221
1,818,833
633,472

30,162
246,510
(4,221)
—

380,465
151,845

228,620

89

(862)

Net income (loss) . . . . . . . . . . . . . . . . . . . . .
Net income (loss) attributable to

227,847

374,419

(14,900)

(359,519)

227,847

non-controlling interest . . . . . . . . . . . . . . .

12,461

—

12,461

(12,461)

12,461

Net income (loss) attributable to Dean

Foods Company . . . . . . . . . . . . . . . . . . . .

$ 240,308

$

374,419

$ (2,439)

$(371,980) $

240,308

F-28

Condensed Consolidating Statements of Income for
the Year Ended December 31, 2008

Parent

Guarantor
Subsidiaries

Non-
Guarantor
Subsidiaries Eliminations

Consolidated
Totals

(In thousands)
$15,285
11,886

$

— $12,361,311
9,438,593
—

2,922,718
1,802,214
492,228

22,758
308,178
1,123
—

296,217
114,330

181,887

Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . .

$

— $12,346,026
9,426,707
—

Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . .
Selling and distribution . . . . . . . . . . . . .
General and administrative . . . . . . . . . .
Facility closing and reorganization

—
—
1,575

2,919,319
1,801,355
485,503

costs . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . . .
Other (income) expense, net . . . . . . . . .
Income from subsidiaries . . . . . . . . . . .

—
269,423
571
(567,786)

22,758
37,181
(648)
—

3,399
859
5,150

—
1,574
1,200
—

—
—
—

—
—
—

567,786

Income (loss) from continuing operations

before income taxes . . . . . . . . . . . . . . . . .
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . .

Income (loss) from continuing operations . .
Loss on sale of discontinued operations, net
of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from discontinued operations, net of
tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net income (loss) attributable to Dean

296,217
114,330

181,887

573,170
221,225

351,945

(5,384)
(2,187)

(3,197)

(567,786)
(219,038)

(348,748)

(1,275)

(1,275)

—

1,275

(1,275)

3,158

205

2,953

(3,158)

3,158

Foods Company . . . . . . . . . . . . . . . . . . . .

$ 183,770

$

350,875

$ (244)

$(350,631) $

183,770

F-29

Net cash provided by continuing operations . . . . . . . . . .
Net cash used in discontinued operations . . . . . . . . . . . . .

$

Net cash provided by operating activities . . . . . . . . . . . .
Payments for property, plant and equipment . . . . . .
Payments for acquisitions, net of cash received . . . .
Proceeds from sale of fixed assets . . . . . . . . . . . . . .

Net cash used in investing activities — continued

operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net cash provided by investing activities —

discontinued operations . . . . . . . . . . . . . . . . . . . . . . . .

Net cash provided by (used in) investing activities . . . . .
. . . . . . . . . . . . .
Proceeds from the issuance of debt
Repayment of debt
. . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from senior secured revolver . . . . . . . . . . .
Payments for senior secured revolver . . . . . . . . . . . .
Proceeds from receivables-backed facility . . . . . . . .
Payments for receivables-backed facility . . . . . . . . .
Payment of deferred financing costs . . . . . . . . . . . .
Issuance of common stock . . . . . . . . . . . . . . . . . . . .
Tax savings on share-based compensation . . . . . . . .
Capital contribution from non-controlling

Condensed Consolidating Statement of Cash Flows for
the Year Ended December 31, 2010

Parent

Guarantor
Subsidiaries

Non-
Guarantor
Subsidiaries

Consolidated
Totals

149,935
—

149,935
—
—
—

—

—

(In thousands)
$

$ 380,908

—

380,908
(288,785)

—
8,212

(5,143) $
8,765

3,622
(13,189)
—
187

525,700
8,765

534,465
(301,974)

—
8,399

(280,573)

(13,002)

(293,575)

—

24,121

24,121

—
400,000
(501,220)
4,006,680
(4,068,880)

—
—
(52,720)
3,415
278

(280,573)

—
(13,092)
—
—
—
—
—
—
—

11,119
—
(145)
—
—
2,445,500
(2,445,500)

—
—
—

7,992
24,339

32,186

(502)

46,425
35,525

(269,454)
400,000
(514,457)
4,006,680
(4,068,880)
2,445,500
(2,445,500)
(52,720)
3,415
278

7,992
—

(217,692)

(502)

46,817
45,190

interest

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net change in intercompany balances . . . . . . . . . . .

—
53,154

—
(77,493)

Net cash provided by (used in) financing activities . . . . .
Effect of exchange rate changes on cash and cash

equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Increase (decrease) in cash and cash equivalents . . . . . . .
Cash and cash equivalents, beginning of period . . . . . . .

(159,293)

(90,585)

—

(9,358)
9,665

—

9,750
—

Cash and cash equivalents, end of period . . . . . . . . . . . . .

$

307

$

9,750

$

81,950

$

92,007

F-30

Condensed Consolidating Statement of Cash Flows for
the Year Ended December 31, 2009

Parent

Guarantor
Subsidiaries

Non-
Guarantor
Subsidiaries

Consolidated
Totals

Net cash provided by continuing operations . . . . . . . . . .
Net cash provided by (used in) discontinued

$

194,778

(In thousands)
$

$ 421,541

41,760

$

658,079

operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—

(735)

Net cash provided by operating activities . . . . . . . . . . . .
Payments for property, plant and equipment . . . . . .
Payments for acquisitions, net of cash received . . . .
Proceeds from sale of fixed assets . . . . . . . . . . . . . .

194,778
(1,220)
(580,068)

—

420,806
(260,809)

—
8,833

3,210

44,970
(5,661)
(1,143)
—

2,475

660,554
(267,690)
(581,211)
8,833

Net cash used in investing activities — continuing

operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(581,288)

(251,976)

(6,804)

(840,068)

Net cash used in investing activities — discontinued

operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—

—

(525)

(525)

Net cash used in investing activities . . . . . . . . . . . . . . . . .
Repayment of debt
. . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from senior secured revolver . . . . . . . . . . .
Payments for senior secured revolver . . . . . . . . . . . .
Proceeds from receivables-backed facility . . . . . . . .
Payments for receivables-backed facility . . . . . . . . .
Issuance of common stock . . . . . . . . . . . . . . . . . . . .
Tax savings on share-based compensation . . . . . . . .
Capital contribution from non-controlling

(581,288)
(186,751)
3,689,000
(3,173,800)

—
—
454,326
894

(251,976)
(143,612)

—
—
—
—
—
—

(7,329)
—
—
—
1,784,728
(2,244,728)

—
—

(840,593)
(330,363)
3,689,000
(3,173,800)
1,784,728
(2,244,728)
454,326
894

interest

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net change in intercompany balances . . . . . . . . . . .

—

(396,885)

—
(38,770)

12,708
435,655

12,708
—

Net cash provided by (used in) financing activities . . . . .
Effect of exchange rate changes on cash and cash

equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Increase (decrease) in cash and cash equivalents . . . . . . .
Cash and cash equivalents, beginning of period . . . . . . .

386,784

(182,382)

(11,637)

192,765

—

274
9,391

—

(13,552)
13,552

808

26,812
8,713

808

13,534
31,656

Cash and cash equivalents, end of period . . . . . . . . . . . . .

$

9,665

$

— $

35,525

$

45,190

F-31

Condensed Consolidating Statement of Cash Flows for
the Year Ended December 31, 2008

Parent

Guarantor
Subsidiaries

Non-
Guarantor
Subsidiaries

Consolidated
Totals

Net cash provided by continuing operations . . . . . . . . . .
Net cash provided by (used in) discontinued

$

317,002

(In thousands)
$

$ 336,426

60,078

$

713,506

operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—

(1,304)

Net cash provided by operating activities . . . . . . . . . . . .
Payments for property, plant and equipment . . . . . .
Payments for acquisitions, net of cash received . . . .
Proceeds from sale of fixed assets . . . . . . . . . . . . . .

317,002
(1,780)
(95,851)
—

335,122
(249,504)

—
11,329

4,426

64,504
(4,855)
—
—

3,122

716,628
(256,139)
(95,851)
11,329

Net cash used in investing activities — continuing

operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(97,631)

(238,175)

(4,855)

(340,661)

Net cash used in investing activities — discontinued

operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—

—

(826)

(826)

Net cash used in investing activities . . . . . . . . . . . . . . . . .
Repayment of debt
. . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from senior secured revolver . . . . . . . . . . .
Payments for senior secured revolver . . . . . . . . . . . .
Proceeds from receivables-backed facility . . . . . . . .
Payments for receivables-backed facility . . . . . . . . .
Issuance of common stock . . . . . . . . . . . . . . . . . . . .
Tax savings on share-based compensation . . . . . . . .
Net change in intercompany balances . . . . . . . . . . .

(97,631)
(18,000)
3,298,200
(3,848,500)

—
—
419,663
7,581
(69,525)

(238,175)
(91,987)
—
—
—
—
—
—
(11,340)

(5,681)
—
—
—
1,852,320
(1,992,320)

—
—
80,865

(341,487)
(109,987)
3,298,200
(3,848,500)
1,852,320
(1,992,320)
419,663
7,581
—

Net cash used in financing activities . . . . . . . . . . . . . . . .

(210,581)

(103,327)

(59,135)

(373,043)

Increase (decrease) in cash and cash equivalents . . . . . . .
Cash and cash equivalents, beginning of period . . . . . . .

8,790
601

(6,380)
19,932

(312)
9,025

2,098
29,558

Cash and cash equivalents, end of period . . . . . . . . . . . . .

$

9,391

$ 13,552

$

8,713

$

31,656

F-32

10. DERIVATIVE FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

Derivatives

Interest Rates — We have interest rate swap agreements in place that have been designated as cash flow
hedges against variable interest rate exposure on a portion of our debt, with the objective of minimizing the
impact of interest rate fluctuations and stabilizing cash flows. These swap agreements provide hedges for interest
on our senior secured credit facility by fixing the LIBOR component of interest rates specified in the senior
secured credit facility at the interest rates noted below until the indicated expiration dates of these interest rate
swap agreements.

The following table summarizes our various interest rate agreements in effect as of December 31, 2010(1):

Fixed Interest Rates

Expiration Date

Notional Amounts

4.91%(2) . . . . . . . . . . . . . . . . . . . . . . . . March 2011 — 2012
March 2017
2.70% to 2.89%(3) . . . . . . . . . . . . . . . .

(In millions)
$1,500
350

(1) On December 31, 2010, $450 million of notional amounts of our swap agreements expired and thus have

been excluded from the table above.

(2) On March 31, 2010, $800 million of notional amounts of the swap agreements expired. The notional
amounts of the swap agreements further decrease by $250 million on March 31, 2011 and the remaining
balance on March 30, 2012.
In August 2010, we entered into forward starting interest rate swap agreements that have an effective date of
March 30, 2012.

(3)

These swaps are recorded as an asset or liability in our Consolidated Balance Sheets at fair value, with an
offset to accumulated other comprehensive income to the extent the hedge is effective. Derivative gains and
losses included in other comprehensive income are reclassified into earnings as the underlying transaction
occurs. Any ineffectiveness in our hedges is recorded as an adjustment to interest expense. There was no hedge
ineffectiveness during 2010, 2009 or 2008.

We are exposed to market risk under these arrangements due to the possibility of interest rates on our senior
secured credit facility falling below the rates on our interest rate derivative agreements. Credit risk under these
arrangements is believed to be remote as the counterparties to our interest rate swap agreements are major
financial institutions; however, if any of the counterparties to our hedging arrangements become unable to fulfill
their obligation to us, we may lose the financial benefits of these arrangements.

Commodities — We are exposed to commodity price fluctuations,

including milk, organic and
non-genetically modified (“non-GMO”) soybeans, butterfat, sweeteners and other commodity costs used in the
manufacturing, packaging and distribution of our products, including utilities, natural gas, resin and diesel fuel.
In order to secure adequate supplies of materials and bring greater stability to the cost of ingredients and their
related manufacturing, packaging and distribution, we routinely enter into forward purchase contracts and other
purchase arrangements with suppliers. Under the forward purchase contracts, we commit to purchasing agreed-
upon quantities of ingredients and commodities at agreed-upon prices at specified future dates. The outstanding
purchase commitment for these commodities at any point in time typically ranges from one month’s to one year’s
anticipated requirements, depending on the ingredient or commodity. These contracts are considered normal
purchases and sales.

In addition to entering into forward purchase contracts, from time to time we may purchase over-the-counter
contracts with our qualified banking partners or exchange-traded commodity futures contracts for raw materials
that are ingredients of our products or components of such ingredients. Certain of the contracts offset the risk of
increases in our commodity costs, and are designated as hedging instruments when appropriate. Other contracts

F-33

may be executed related to certain customer pricing arrangements. We have not designated such contracts as
hedging instruments; therefore, the contracts are marked to market at each reporting period and a derivative asset
or liability is recorded on our balance sheet. A summary of these open commodities contracts recorded at fair
value in our Consolidated Balance Sheet at December 31, 2010 is included in the table below.

Although we may utilize forward purchase contracts and other instruments to mitigate the risks related to
commodity price fluctuation, such strategies do not fully mitigate commodity price risk. Adverse movements in
commodity prices over the terms of the contracts or instruments could decrease the economic benefits we derive
from these strategies.

Foreign Currency — Historically, our international operations represented less than 1% of our sales and
long-lived assets. With our acquisition of Alpro in July 2009, the relative percentage of our international sales
has increased to approximately 3% during the year ended December 31, 2010. Sales in foreign countries, as well
as certain expenses related to those sales, are transacted in currencies other than our reporting currency, the U.S.
dollar. Our foreign currency exchange rate risk is primarily limited to the Euro and the British Pound. We may,
from time to time, employ derivative financial instruments to manage our exposure to fluctuations in foreign
currency rates or enter into forward currency exchange contracts to hedge our net investment and intercompany
payable or receivable balances in foreign operations.

In June 2009, in connection with our acquisition of Alpro, we entered into a forward contract to purchase
€325.0 million. The forward contract was entered into in order to hedge the impact on the purchase price
resulting from foreign currency exchange rate fluctuations. The forward contract was not designated as a hedging
instrument for accounting purposes. In July 2009, the acquisition closed and the foreign currency forward
contract was settled. A gain of $4.2 million was recorded for the year ended December 31, 2009, within other
income. No foreign currency derivatives were entered into in 2010.

As of December 31, 2010 and 2009, our derivatives recorded at fair value in our Consolidated Balance

Sheets were:

Derivative Assets

Derivative Liabilities

December 31,
2010

December 31,
2009

December 31,
2010

December 31,
2009

(In thousands)

Derivatives designated as Hedging Instruments

. . . . . . . .
Interest rate swap contracts — current(1)
Interest rate swap contracts — noncurrent(2)
. . . . .
Commodities contracts — current(1) . . . . . . . . . . . .

$ —
4,156
2,754

Derivatives not designated as Hedging Instruments

Commodities contracts — current(1) . . . . . . . . . . . .

1,478

Total derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$8,388

$—
—
—

—

$—

$59,379
13,058
—

$ 90,194
42,262
—

947

—

$73,384

$132,456

(1) Derivative assets and liabilities that have settlement dates equal to or less than 12 months from the
respective balance sheet date were included in other current assets and accounts payable and accrued
expenses, respectively, in our Consolidated Balance Sheets.

(2) Derivative assets and liabilities that have settlement dates greater than 12 months from the respective
balance sheet date were included in identifiable intangible and other assets and other long-term liabilities,
respectively, in our Consolidated Balance Sheets.

F-34

Gains and losses on derivatives designated as cash flow hedges reclassified from accumulated other

comprehensive income into income for the years ended December 31, 2010 and 2009 were (in thousands):

Year Ended December 31

2010

2009

2008

Losses on interest rate swap contracts(1) . . . . . . . . . . . . .
. . . . . . . . . . . . . . . .
Losses on commodities contracts(2)

$96,573
6

$113,238
—

$42,624
—

(1) Recorded in interest expense in our Consolidated Statements of Income.
(2) Recorded in distribution expense in our Consolidated Statements of Income.

Based on current interest rates, we estimate that approximately $59.4 million of hedging activity related to
our interest rate swaps and $2.8 million of hedging activity related to our commodities contracts will be
reclassified from accumulated other comprehensive income into income within the next 12 months.

Fair Value Measurements

Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer
a liability in an orderly transaction between market participants. As such, fair value is a market-based
measurement that should be determined based on assumptions that market participants would use in pricing an
asset or liability. As a basis for considering assumptions, we follow a three-tier fair value hierarchy, which
prioritizes the inputs used in measuring fair value as follows:

• Level 1 — Quoted prices for identical instruments in active markets.

• Level 2 — Quoted prices for similar instruments in active markets, quoted prices for identical or
similar instruments in markets that are not active and model-derived valuations, in which all significant
inputs are observable in active market.

• Level 3 — Unobservable inputs in which there is little or no market data, which require the reporting

entity to develop its own assumptions.

A summary of our derivative assets and liabilities measured at fair value on a recurring basis as of

December 31, 2010 is as follows (in thousands):

Fair Value
as of
December 31, 2010

Asset — Interest rate swap contracts . . . . . . . . . . . .
Liability — Interest rate swap contracts . . . . . . . . . .
Asset — Commodities contracts . . . . . . . . . . . . . . .
Liability — Commodities contracts . . . . . . . . . . . . .

$ 4,156
72,437
4,232
947

Level 1

Level 2

Level 3

$—
—
—
—

$ 4,156
72,437
4,232
947

$—
—
—
—

A summary of our derivative liabilities measure at fair value on a recurring basis as of December 31, 2009 is

as follows (in thousands):

Fair Value
as of
December 31, 2009

Level 1

Level 2

Level 3

Liability — Interest rate swap contracts . . . . . . . . .

$132,456

$—

$132,456

$—

Due to their near-term maturities, the carrying amounts of accounts receivable and accounts payable are
considered equivalent to fair value. In addition, because the interest rates on our senior secured credit facility and
certain other debt are variable, their fair values approximate their carrying values.

F-35

The fair value of our Dean Foods Company senior notes and subsidiary senior notes was determined based
on quoted market prices. The following table presents the carrying value and fair value of our senior and
subsidiary senior notes at December 31:

2010

2009

Carrying Value

Fair Value Carrying Value

Fair Value

(In thousands)

Subsidiary senior notes . . . . . . . . . . . . . . . . . . . .
Dean Foods Company senior notes due 2016 . .
Dean Foods Company senior notes due 2018 . .

$127,504
498,765
400,000

$123,185
458,750
403,000

$126,027
498,584
—

$135,255
490,000
—

We hold certain deferred compensation assets that are held at fair value. The following table presents a

summary of these assets measured at fair value on a recurring basis as of December 31, 2010 (in thousands):

Money market . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mutual funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$3,502
1,013

$—
—

Total

Level 1

Level 2

$3,502
1,013

Level 3

$—
—

The following table presents a summary of the deferred compensation assets measured at fair value on a

recurring basis as of December 31, 2009 (in thousands):

Money market . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mutual funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$5,010
1,653

$—
—

Total

Level 1

Level 2

$5,010
1,653

Level 3

$—
—

11. COMMON STOCK AND SHARE-BASED COMPENSATION

Our authorized shares of capital stock include one million shares of preferred stock and 500 million shares

of common stock with a par value of $.01 per share.

Public Offerings of Equity Securities — In May 2009 and March 2008, we issued and sold 25.4 million and
18.7 million shares of our common stock in public offerings, respectively. Net proceeds from these offerings of
$444.7 million and $399.5 million, respectively, were used to reduce our indebtedness under our credit
agreements.

Stock Award Plans — As of December 31, 2010, we had three award plans with shares remaining available
for issuance. These plans, which are our 1997 Stock Option and Restricted Stock Plan, the 1989 Dean Foods
Company Stock Awards Plan (which we adopted upon completion of our acquisition of Legacy Dean) and the
Dean Foods Company 2007 Stock Incentive Plan (the “2007 Plan”) provide for grants of stock options, stock
units, restricted stock and other stock-based awards to employees, officers, directors and, in some cases,
consultants, up to a maximum of 37.5 million, 5.7 million and 10.0 million shares, respectively. Options and
other stock-based awards vest in accordance with provisions set forth in the applicable award agreements. The
remaining shares available for grant under the historical plans are granted pursuant to the terms and conditions of
the 2007 Plan. As of December 31, 2010, we had 5,584,003 million shares, in aggregate, available for issuance.

Under our stock award plans, we grant stock options and restricted stock units to certain employees and
directors. Non-employee directors also can elect to receive their director’s fees in the form of restricted stock in
lieu of cash.

Stock Options — Under the terms of our stock option plans, employees and non-employee directors may be
granted options to purchase our stock at a price equal to the market price on the date the option is granted. In
general, employee options vest one-third on the first anniversary of the grant date, one-third on the second
anniversary of the grant date and one-third on the third anniversary of the grant date. All unvested options vest
immediately upon a change of control or in certain cases upon death or qualified disability. Options granted to
non-employee directors generally vest immediately.

F-36

We recognize share-based compensation expense for stock options ratably over the vesting period. The fair
value of each option award is estimated on the date of grant using the Black-Scholes valuation model, using the
following assumptions:

Expected volatility . . . . . . . . . . . . . . . . . . . .
Expected dividend yield . . . . . . . . . . . . . . . .
Expected option term . . . . . . . . . . . . . . . . . .
Risk-free rate of return . . . . . . . . . . . . . . . . .

Year Ended December 31

2010

2009

2008

34%
0%

33%
0%

25%
0%

5 years

4.75 years
1.26 to 2.59% 1.65 to 2.66% 1.71 to 3.34%

4.5 years

The expected term of the options represents the estimated period of time until exercise and is based on
historical experience of similar awards, giving consideration to contractual terms (generally 10 years), vesting
schedules and expectations of future employee and director behavior. Expected stock price volatility is based on
a combination of historical volatility of our stock and expectations with regard to future volatility. The risk-free
rates are based on the implied yield available on U.S. Treasury zero-coupon issues with an equivalent remaining
term. We have not historically declared or paid a regular cash dividend on our common stock, and we have no
current plans to pay a cash dividend in the future.

The following table summarizes stock option activity during the year ended December 31, 2010:

Weighted
Average
Exercise Price

Weighted
Average
Contractual Life

Aggregate
Intrinsic
Value

Options

Options outstanding at January 1, 2010 . . . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited and cancelled(1) . . . . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

22,218,381
1,917,255
(1,818,725)
(793,178)

20.52
13.86
22.27
9.03

Options outstanding at December 31, 2010 . . . . . . . . . . .

21,523,733

$20.20

4.86

$222,416

Options vested and expected to vest at December 31,

2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Options exercisable at December 31, 2009 . . . . . . . . . . .
Options exercisable at December 31, 2010 . . . . . . . . . . .

21,440,736
15,900,822
17,209,000

20.22
19.48
20.60

4.84

4.00

$220,179

$182,024

(1) Pursuant to the terms of our stock option plans, options that are forfeited or cancelled may be available for

future grants.

The following table summarizes information about options outstanding and exercisable at December 31,

2010:

Range of
Exercise Prices

$7.44 to 11.69
12.36 to 14.25
14.56 to 17.91
18.00 to 19.98
20.07
20.19 to 25.37
25.39 to 25.68
25.81 to 30.11
30.18 to 31.87
31.90

Options Outstanding

Options Exercisable

Number
Outstanding

Weighted-Average
Remaining
Contractual Life

Weighted-Average
Exercise Price

Number
Exercisable

Weighted-Average
Exercise Price

2,853,316
2,438,641
3,046,444
1,942,293
2,761,790
2,905,116
2,327,759
2,888,445
244,365
115,564

1.81
1.94
5.87
4.41
7.79
6.16
4.61
5.61
4.61
6.38

F-37

$11.01
14.23
16.38
18.54
20.07
24.79
25.64
29.18
31.20
31.90

2,546,567
2,435,308
1,707,211
1,806,553
1,067,352
2,154,972
2,250,611
2,880,497
244,365
115,564

$11.13
14.23
17.71
18.53
20.07
24.75
25.64
29.18
31.20
31.90

The following table summarizes additional information regarding our stock option activity during the years

ended December 31, 2010, 2009 and 2008 (in thousands, except per share amounts):

Weighted-average grant date fair value of options granted . . . . . . . .
Intrinsic value of options exercised . . . . . . . . . . . . . . . . . . . . . . . . . .
Fair value of shares vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock option expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax benefit related to stock option expense . . . . . . . . . . . . . . . . . . . .

$

4.68
2,507
21,972
16,243
6,135

$

6.26
8,486
24,142
22,288
8,197

$

6.61
45,806
24,070
23,374
8,328

Year Ended December 31

2010

2009

2008

During the year ended December 31, 2010, cash received from stock option exercises was $7.1 million and

the total cash benefit for tax deductions to be realized for these option exercises was $1.0 million.

At December 31, 2010, there was $13.6 million of total unrecognized stock option expense, all of which is
related to nonvested awards. This compensation expense is expected to be recognized over the weighted-average
remaining vesting period of 1.4 years.

Restricted Stock Units — We issue restricted stock units to certain senior employees and non-employee
directors as part of our long-term incentive program. A restricted stock unit represents the right to receive one
share of common stock in the future. Restricted stock units have no exercise price. Through December 31, 2008,
restricted stock units granted to employees generally vest ratably over five years, subject to certain accelerated
vesting provisions based primarily on our stock price, a change of control, or in certain cases upon death or
qualified disability. Starting in January 2009, restricted stock units granted to employees generally vest ratably
over three years, subject to certain accelerated vesting provisions based primarily on a change of control, or in
certain cases upon death or qualified disability. Restricted stock units granted to non-employee directors vest
ratably over three years.

The following table summarizes stock unit activity during the years ended December 31, 2010, 2009 and

2008:

Stock units outstanding at January 1, 2008 . . . . . . .
Stock units issued . . . . . . . . . . . . . . . . . . . . . .
Shares issued . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock units cancelled or forfeited(1) . . . . . . . .

Stock units outstanding at December 31, 2008 . . . .
Stock units issued . . . . . . . . . . . . . . . . . . . . . . . . . .
Shares issued . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock units cancelled or forfeited(1) . . . . . . . . . . . .

Stock units outstanding at December 31, 2009 . . . .
Stock units issued . . . . . . . . . . . . . . . . . . . . . . . . . .
Shares issued . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock units cancelled or forfeited(1) . . . . . . . . . . . .
Stock units outstanding at December 31, 2010 . . . .

Employees

Directors

Total

1,140,152
938,021
(193,042)
(131,901)

1,753,230
1,173,542
(337,972)
(191,660)

2,397,140
1,416,768
(516,637)
(648,428)
2,648,843

78,863
22,950
(30,132)
—

71,681
36,926
(34,284)
(9,203)

65,120
27,009
(21,743)
—
70,386

1,219,015
960,971
(223,174)
(131,901)

1,824,911
1,210,468
(372,256)
(200,863)

2,462,260
1,443,777
(538,380)
(648,428)
2,719,229

Weighted average grant date fair value . . . . . . . . .

$

18.49

$ 15.74

$

18.43

(1) Pursuant to the terms of our stock unit plans, employees have the option of forfeiting stock units to cover
their minimum statutory tax withholding when shares are issued. Stock units that are cancelled or forfeited
may be available for future grants.

F-38

The following table summarizes information about our stock unit grants and stock unit expense during the

years ended December 31, 2010, 2009 and 2008 (in thousands, except per share amounts):

Year Ended December 31

2010

2009

2008

Weighted-average grant date fair value of stock units granted . . . . .
Stock unit expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax benefit related to stock unit expense . . . . . . . . . . . . . . . . . . . . . .

$ 18.43
20,629
6,256

$ 19.78
17,109
5,156

$ 24.91
11,806
3,522

At December 31, 2010, there was $32.6 million of total unrecognized stock unit expense, all of which is
related to nonvested awards. This compensation expense is expected to be recognized over the weighted-average
remaining vesting period of 1.8 years.

Restricted Stock — We offer our non-employee directors the option to receive their compensation for
services rendered in either cash or shares of restricted stock equal to 150% of the fee amount. Shares of restricted
stock vest one-third on grant, one-third on the first anniversary of grant and one-third on the second anniversary
of grant. The following table summarizes restricted stock activity during the years ended December 31, 2010,
2009 and 2008:

Nonvested at January 1, 2008 . . . . . . . . . . . . . . . . . . . .
Restricted shares granted . . . . . . . . . . . . . . . . . . . . . . .
Restricted shares vested . . . . . . . . . . . . . . . . . . . . . . . .
Restricted shares forfeited . . . . . . . . . . . . . . . . . . . . . . .

Nonvested at December 31, 2008 . . . . . . . . . . . . . . . . .
Restricted shares granted . . . . . . . . . . . . . . . . . . . . . . .
Restricted shares vested . . . . . . . . . . . . . . . . . . . . . . . .
Restricted shares forfeited . . . . . . . . . . . . . . . . . . . . . . .

Nonvested at December 31, 2009 . . . . . . . . . . . . . . . . .
Restricted shares granted . . . . . . . . . . . . . . . . . . . . . . .
Restricted shares vested . . . . . . . . . . . . . . . . . . . . . . . .
Restricted shares forfeited . . . . . . . . . . . . . . . . . . . . . . .

Weighted-
Average Grant
Date Fair Value

$34.09
19.92
28.14
22.37

22.94
18.24
22.39
24.27

18.87
10.41
14.88
—

Shares

32,033
53,469
(37,824)
(1,486)

46,192
38,405
(42,882)
(2,369)

39,346
77,613
(52,885)
—

Nonvested at December 31, 2010 . . . . . . . . . . . . . . . . .

64,074

$11.92

Cash Performance Units — In February 2010, we began granting awards of cash performance units
(“CPUs”) as part of our long-term incentive compensation program under the terms of our 2007 Stock Incentive
Plan (the “2007 Plan”). The CPU awards are cash-settled awards and are designed to link compensation of
certain executive officers and other key employees to our performance over a three-year period. The performance
metric, as defined in the award, is the performance of our stock price relative to that of a peer group of
companies. The range of payout under the award is between 0% and 200% and is payable in cash at the end of
the performance period.

Outstanding at December 31, 2009 . . . . . . . . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Converted/paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Units

—
12,658,001
—

(1,846,000)

Outstanding at December 31, 2010 . . . . . . . . . . . . . . . . . . .

10,812,001

Vested at December 31, 2010 . . . . . . . . . . . . . . . . . . . . . . .

—

F-39

We reversed $0.8 million of expense in the fourth quarter of 2010 due to the underperformance of the plan.
We have no liability recorded related to this plan at December 31, 2010, and based on the cumulative expected
returns versus that of the peer group companies, we do not expect to record any compensation expense in the
future related to these awards. Our management is currently exploring other alternatives for our long-term
incentive programs, as described below.

For fiscal 2011, we changed the design of our Long-Term Incentive program by adding additional forms of
equity-based and cash-based long-term compensation. For employees at the Senior Vice President level and
below, we instituted a deferred cash award with three-year cliff vesting. For employees at the Vice President
level and below, we instituted a grant of phantom shares, which are similar to RSUs in that they are based on the
price of the Company’s stock and vest ratably over a three-year period, but are cash settled based upon the value
of the Company’s stock at each vesting period. For the executive officers, we retained the allocation of long-term
incentive grants among stock options, RSUs and cash performance units, or CPUs, as with grants made in 2010.

Rights Plan — On February 27, 1998, our Board of Directors declared a dividend of the right to purchase
one half of one common share for each outstanding share of common stock to the stockholders of record on
March 18, 1998. The rights plan expired pursuant to its terms effective March 18, 2008.

Stock Repurchases — Since 1998, our Board of Directors has from time to time authorized the repurchase
of our common stock up to an aggregate of $2.3 billion, excluding fees and expense. We made no share
repurchases in 2010 or 2009. As of December 31, 2010, $218.7 million was available for repurchases under this
program (excluding fees and commissions). Shares, when repurchased, are retired.

12. EARNINGS PER SHARE

Basic earnings per share is based on the weighted average number of common shares outstanding during each
period. Diluted earnings per share is based on the weighted average number of common shares outstanding and the
effect of all dilutive common stock equivalents outstanding during each period. The following table reconciles the
numerators and denominators used in the computations of both basic and diluted earnings per share (“EPS”):

Basic EPS computation:

Numerator:

Income from continuing operations . . . . . . . . . . . . . . .
Net Loss attributable to non-controlling interest
. . . . .
Income from continuing operations attributable to

$

Year Ended December 31,

2010

2009

2008

(In thousands, except share data)

77,740
8,735

$

228,620
12,461

$

181,887
—

Dean Foods Company . . . . . . . . . . . . . . . . . . . . . . . .

$

86,475

$

241,081

$

181,887

Denominator:

Average common shares . . . . . . . . . . . . . . . . . . . . . . . .

181,799,306

170,986,886

149,266,519

Basic EPS from continuing operations attributable to Dean

Foods Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

0.48

$

1.41

$

1.22

Diluted EPS computation:

Numerator:

Income from continuing operations . . . . . . . . . . . . . . .
Net Loss attributable to non-controlling interest
. . . . .
Income from continuing operations attributable to

$

77,740
8,735

$

228,620
12,461

$

181,887
—

Dean Foods Company . . . . . . . . . . . . . . . . . . . . . . . .

$

86,475

$

241,081

$

181,887

Denominator:

Average common shares — basic . . . . . . . . . . . . . . . . .
Stock option conversion(1) . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock units(2)
Average common shares — diluted . . . . . . . . . . . . . . .

181,799,306
574,094
488,402
182,861,802

170,986,886
2,474,227
397,190
173,858,303

149,266,519
3,975,370
153,857
153,395,746

Diluted EPS from continuing operations attributable to

Dean Foods Company . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1) Anti-dilutive options excluded . . . . . . . . . . . . . . . . . . . . . . . .
(2) Anti-dilutive stock units excluded . . . . . . . . . . . . . . . . . . . . . .

$

0.47
19,681,022
158,991

$

1.39
12,846,720
57,664

$

1.19
10,068,998
970,868

F-40

13. OTHER COMPREHENSIVE INCOME (LOSS)

Comprehensive income (loss) comprises net income plus all other changes in equity from non-owner
sources. The components of accumulated other comprehensive income (loss), as reflected in the Consolidated
Statements of Stockholders’ Equity at December 31, 2010 and 2009, are as follows:

Cumulative translation adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fair value of derivative instruments, net of tax . . . . . . . . . . . . . . . . . . . . . . .
Pension and other postretirement liability adjustment, net of tax . . . . . . . . .

$ (24,239)
(40,100)
(82,314)

$

(3,532)
(82,133)
(81,311)

Total accumulated other comprehensive income (loss) . . . . . . . . . . . . .

$(146,653)

$(166,976)

December 31

2010

2009

(In thousands)

14. EMPLOYEE RETIREMENT AND PROFIT SHARING PLANS

We sponsor various defined benefit and defined contribution retirement plans, including various employee
savings and profit sharing plans, and contribute to various multi-employer pension plans on behalf of our
employees. Substantially all full-time union and non-union employees who have completed one or more years of
service and have met other requirements pursuant to the plans are eligible to participate in one or more of these
plans. On July 2, 2009, we acquired Alpro, including its defined benefit pension plans. During 2010, 2009 and
2008, our retirement and profit sharing plan expenses were as follows:

Year Ended December 31

2010

2009

2008

Defined benefit plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Defined contribution plans . . . . . . . . . . . . . . . . . . . . . . . . .
Multi-employer pension and certain union plans . . . . . . . .

$12,975
27,182
28,768

(In thousands)
$21,053
28,300
29,604

$ 4,398
23,331
28,295

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$68,925

$78,957

$56,024

Defined Benefit Plans — The benefits under our defined benefit plans are based on years of service and
employee compensation. Our funding policy is to contribute annually the minimum amount required under
ERISA regulations plus additional amounts as we deem appropriate.

Included in accumulated other comprehensive income at December 31, 2010 and 2009 are the following
amounts that have not yet been recognized in net periodic pension cost: unrecognized transition obligation of
$225,000 ($138,000 net of tax) and $337,000 ($206,000 net of tax), unrecognized prior service costs of
$5.6 million ($3.5 million net of tax) and $7.1 million ($4.4 million net of tax) and unrecognized actuarial losses
of $124.1 million ($76.0 million net of tax) and $120.4 million ($73.7 million net of tax). The transition
obligation, prior service costs, and actuarial losses included in accumulated other comprehensive income and
expected to be recognized in net periodic pension cost during the year ended December 31, 2011 are $112,000
($69,000 net of tax), $763,000 ($467,000 net of tax), and $9.0 million ($5.5 million net of tax), respectively.

F-41

The reconciliation of the beginning and ending balances of the projected benefit obligation and the fair
value of plans assets for the years ended December 31, 2010 and 2009 and the funded status of the plans at
December 31, 2010 and 2009 is as follows:

Change in benefit obligation:
Benefit obligation at beginning of year . . . . . . . . . . . . . . . . . . . . . . .
Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Plan participants’ contributions . . . . . . . . . . . . . . . . . . . . . . . . .
Actuarial (gain) loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Plan amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Plan settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exchange rate changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Benefit obligation at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Change in plan assets:
Fair value of plan assets at beginning of year . . . . . . . . . . . . . . . . . .
Actual return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . .
Employer contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Plan participants’ contributions . . . . . . . . . . . . . . . . . . . . . . . . .
Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Plan settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exchange rate changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

December 31

2010

2009

(In thousands)

$294,569
3,699
16,941
66
16,619
(20,822)
—
(2,914)
—
(627)

$276,355
3,147
16,947
48
10,330
(18,873)
—
(1,769)
8,605
(221)

307,531

294,569

223,369
22,240
10,277
66
(20,822)
(2,914)
—
(394)

181,027
34,062
24,517
48
(18,873)
(1,769)
4,496
(139)

Fair value of plan assets at end of year . . . . . . . . . . . . . . . . . . . . . . .

231,822

223,369

Funded status at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ (75,709)

$ (71,200)

The underfunded status of the plans of $75.7 million at December 31, 2010 is recognized in our
Consolidated Balance Sheet and includes $845,000 classified as a current accrued pension liability. We do not
expect any plan assets to be returned to us during the year ended December 31, 2011. We expect to contribute
approximately $12.1 million to the pension plans in 2011.

A summary of our key actuarial assumptions used to determine benefit obligations as of December 31, 2010

and 2009 follows:

Weighted average discount rate(1) . . . . . . . . . . . . . . . . . . . . . . . . . .
Rate of compensation increase(1) . . . . . . . . . . . . . . . . . . . . . . . . . . .

5.28% 6.00%
4.00% 4.00%

(1) Assumptions in this table represent the assumptions utilized for our domestic pension plans as they

represented more than 90% of our total benefit obligation as of December 31, 2010 and 2009.

December 31

2010

2009

F-42

A summary of our key actuarial assumptions used to determine net periodic benefit cost for 2010, 2009 and

2008 follows:

Year Ended December 31

2010

2009

2008

Weighted average discount rate(1) . . . . . . . . . . . . . . . . . . . . . . . .
Expected return on plan assets(1) . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . .
Rate of compensation increase(1)

6.00% 6.32% 6.40%
7.70% 7.70% 8.00%
4.00% 4.00% 4.00%

(1) Assumptions in this table represent the assumptions utilized for our domestic pension plans as they
represented more than 90% of our total net periodic benefit cost during the years ended December 31, 2010,
2009 and 2008.

Year Ended December 31

2010

2009

2008

(In thousands)

Components of net periodic benefit cost:

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Service cost
Interest cost
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected return on plan assets . . . . . . . . . . . . . . . .

$ 3,699
16,941
(16,584)

$ 3,147
16,947
(14,017)

$ 2,727
16,160
(19,185)

Amortizations:

Unrecognized transition obligation . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . .
Prior service cost
Unrecognized net loss . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . .
Effect of curtailment
. . . . . . . . . . . . . . . . . . . . . . . .
Effect of settlement

112
716
5,594
790
1,707

112
921
12,093
945
905

112
890
2,038
—
1,656

Net periodic benefit cost

. . . . . . . . . . . . . . . . . . . . . . . .

$ 12,975

$ 21,053

$ 4,398

The overall expected long-term rate of return on plan assets is a weighted-average expectation based on the
targeted and expected portfolio composition. We consider historical performance and current benchmarks to
arrive at expected long-term rates of return in each asset category.

The amortization of unrecognized net loss represents the amortization of investment losses incurred. In
2010, we closed a plant in South Carolina and also carried out a broad-based workforce reduction plan within our
Fresh Dairy Direct-Morningstar segment. The effect of curtailment cost in 2010 represents the recognition of net
periodic pension service costs associated with these activities. In 2009, we closed a plant in Michigan. The effect
of curtailment cost in 2009 represents the recognition of net periodic pension service costs associated with the
closure of that plant. The effect of settlement costs in 2010, 2009 and 2008 represents the recognition of net
periodic benefit cost related to pension settlements reached as a result of plant closures.

Pension plans with an accumulated benefit obligation in excess of plan assets follows:

December 31

2010

2009

(In millions)

Projected benefit obligation . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated benefit obligation . . . . . . . . . . . . . . . . . . . . . . . .
Fair value of plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$299.6
290.2
226.3

$286.0
283.2
217.0

The accumulated benefit obligation for all defined benefit plans was $295.0 million and $289.0 million at

December 31, 2010 and 2009, respectively.

Almost 90% of our defined benefit plan obligations are frozen as to future participants or increases in
accumulated benefits. Many of these obligations were acquired in prior strategic transactions. As an alternative to
defined benefit plans, we offer defined contribution plans for eligible employees.

F-43

The weighted average discount rate reflects the rate at which our defined benefit plan obligations could be
effectively settled. The rate, which is updated annually with the assistance of an independent actuary, uses a
model that reflects rates of a hypothetical portfolio of zero-coupon, high quality corporate bonds that mirror our
forecasted benefit plan payments in the future. The weighted average discount rate was decreased from 6.00% at
December 31, 2009 to 5.28% at December 31, 2010, which will increase the net periodic benefit cost in 2011.

Substantially all of our qualified pension plans are consolidated into one master trust. The investments held
in the master trust are managed by an established Investment Committee with assistance from independent
investment advisors. On July 1, 2009, the Investment Committee adopted a new long-term investment policy for
the master trust that decreases the expected relative holdings of equity securities that targets investments in
equity securities at 59% of the portfolio, fixed income at 37%, cash equivalents at 3% and other investments of
1%. Policy objectives include maximizing long-term return at acceptable risk levels, diversifying among asset
classes, if appropriate, and among investment managers, as well as establishing relevant risk parameters within
each asset class. The investment policies permit variances from the targets within certain parameters. The
investment policy prohibits investments in non-marketable or exotic securities, such as short-sale contracts; letter
stock; commodities and private placements, without
the Investment Committee’s prior approval. At
December 31, 2010, our master trust was invested as follows: investments in equity securities were at 62%;
investments in fixed income were at 34%; cash equivalents were less than 1% and other investments were at 4%.
Given meaningful equity returns in the fourth quarter of 2010, these investment percentages were slightly
different from the Investment Committee targets noted above, and our master trust investments were rebalanced
accordingly during the first quarter of 2011 in order to be consistent with those targets. Equity securities of the
plan did not include any investment in our common stock at December 31, 2010 or 2009.

Estimated pension plan benefit payments to participants for the next ten years are as follows:

2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Next five years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 19.8 million
19.2 million
19.7 million
20.4 million
19.8 million
106.0 million

Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer
a liability in an orderly transaction between market participants. As such, fair value is a market-based
measurement that should be determined based on assumptions that market participants would use in pricing an
asset or liability. As a basis for considering assumptions, we follow a three-tier fair value hierarchy, which
prioritizes the inputs used in measuring fair value of our defined benefit plans’ consolidated assets as follows:

• Level 1 — Quoted prices for identical instruments in active markets.

• Level 2 — Quoted prices for similar instruments in active markets, quoted prices for identical or
similar instruments in markets that are not active and model-derived valuations, in which all significant
inputs are observable in active market.

• Level 3 — Unobservable inputs in which there is little or no market data, which require the reporting

entity to develop its own assumptions.

F-44

The fair values by category of inputs as of December 31, 2010 were as follows (in thousands):

Equity Securities:

Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Index Funds:

U.S. Equities(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
International Equities(b) . . . . . . . . . . . . . . . . . . . . . . .
Equity Funds(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total Equity Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Fixed Income:

Bond Funds(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diversified Funds(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total Fixed Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Cash Equivalents:

Short-term Investment Funds(f)

. . . . . . . . . . . . . . . . . . . . .

Total Cash Equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other Investments:

Insurance Contracts(g) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Partnerships/Joint Ventures(h)
. . . . . . . . . . . . . . . . . . . . . .
Insurance Reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total Other Investments . . . . . . . . . . . . . . . . . . . . . . . . . . .

Fair Value as of

December 31, 2010 Level 1

Level 2

Level 3

$

17

$ 17

$ — $ —

114,232
22,933
5,722

142,904

74,322
4,353

78,675

1,783

1,783

6,169
1,913
378

8,460

—
—
—

114,232
22,933
5,722

17

142,887

—
—

—

—

—

—
—
—

—

74,322
—

74,322

1,783

1,783

—
—
—

—

—
—
—

—

—
4,353

4,353

—

—

6,169
1,913
378

8,460

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$231,822

$ 17

$218,992

$12,813

(a) Represents a pooled/separate account that tracks the Dow Jones U.S. Total Stock Market Index.
(b) Represents a pooled/separate account that tracks the MSCI EAFE Index.
(c) Represents a pooled/separate account comprised of approximately 90% U.S. large-cap stocks and 10% in

international stocks.

(d) Represents a pooled/separate account which tracks the overall performance of the Barclays Capital Long

Term Government/Credit Index.

(e) Represents a pooled/separate account investment in the General Investment Accounts of two investment
managers. The accounts primarily invest in fixed income debt securities, such as high grade corporate
bonds, government bonds and asset-backed securities.
Investment is comprised of high grade money market instruments with short-term maturities and high
liquidity.

(f)

(g) Approximately 90% of the insurance contracts are financed by employer premiums with the insurer
managing the reserves as calculated using an actuarial model. The remaining 10% of the insurance contracts
are financed by employer and employee contributions with the insurer managing the reserves collectively
with other pension plans.

(h) The majority of the total partnership balance is a partnership comprised of a portfolio of two limited

partnership funds that invest in public and private equity.

F-45

The fair values by category of inputs as of December 31, 2009 were as follows (in thousands):

Equity Securities:

Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Index Funds:

U.S. Equities(a)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
International Equities(b) . . . . . . . . . . . . . . . . . . . . . . .
Equity Funds(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total Equity Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Fixed Income:

Bond Funds(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diversified Funds(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total Fixed Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Cash Equivalents:

Cash and Cash Equivalents . . . . . . . . . . . . . . . . . . . . . . . .
Short-term Investment Funds(f) . . . . . . . . . . . . . . . . . . . . .

Total Cash Equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other Investments:

Insurance Contracts(g) . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Partnerships/Joint Ventures(h) . . . . . . . . . . . . . . . . . . . . . .
Insurance Reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total Other Investments . . . . . . . . . . . . . . . . . . . . . . . . . . .

Fair Value as of
December 31, 2009

Level 1

Level 2

Level 3

$

28

$

28

$ — $ —

103,535
21,219
6,560

131,342

73,142
4,674

77,816

2,000
4,562

6,562

5,197
2,092
360

7,649

—
—
—

103,535
21,219
6,560

28

131,314

—
—

—

2,000
—

2,000

—
—
—

—

73,142
—

73,142

—
4,562

4,562

—
—
—

—

—
—
—

—

—
4,674

4,674

—
—

—

5,197
2,092
360

7,649

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$223,369

$2,028

$209,018

$12,323

(a) Represents a pooled/separate account that tracks the Dow Jones U.S. Total Stock Market Index.
(b) Represents a pooled/separate account that tracks the MSCI EAFE Index.
(c) Represents a pooled/separate account comprised of approximately 90% U.S. large-cap stocks and 10% in

international stocks.

(d) Approximately 60% of investment represents a pooled/separate account that tracks the overall performance
of the Barclays Capital U.S. Aggregate Bond Index. The remaining 40% represents a pooled/separate
account invested in government and investment grade corporate securities.

(e) Represents a pooled/separate account investment in the General Investment Accounts of two investment
managers. The accounts primarily invest in fixed income debt securities, such as high grade corporate
bonds, government bonds and asset-backed securities.
Investment is comprised of high grade money market instruments with short-term maturities and high
liquidity.

(f)

(g) Approximately 90% of the insurance contracts are financed by employer premiums with the insurer
managing the reserves as calculated using an actuarial model. The remaining 10% of the insurance contracts
are financed by employer and employee contributions with the insurer managing the reserves collectively
with other pension plans.

(h) The majority of the total partnership balance is a partnership comprised of a portfolio of three limited

partnership funds that invest in public and private equity.

F-46

A reconciliation of the change in the fair value measurement of the defined benefit plans’ consolidated
assets using significant unobservable inputs (Level 3) during the years ended December 31, 2010 and 2009 is as
follows (in thousands):

Diversified
Funds

Insurance
Contracts

Partnerships/
Joint Ventures

Insurance
Reserves

Total

Balance at December 31, 2008 . . . . . . . . . . . . . . . . . . . . . . $ 4,770
Actual return on plan assets:

Relating to instruments still held at reporting date . . .
Acquisitions(1)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchases, sales and settlements (net) . . . . . . . . . . . . . . . . .
Transfers in and/or out of Level 3 . . . . . . . . . . . . . . . . . . . .

58

—
(2,265)
2,111

Balance at December 31, 2009 . . . . . . . . . . . . . . . . . . . . . . $ 4,674
Actual return on plan assets:

Relating to instruments still held at reporting date . . .
Purchases, sales and settlements (net) . . . . . . . . . . . . . . . . .
Transfers in and/or out of Level 3 . . . . . . . . . . . . . . . . . . . .

226
(3,410)
2,863

$ —

$2,937

$361

$ 8,068

—
5,197
—
—

(845)
—
—
—

(1)

—
—
—

(788)
5,197
(2,265)
2,111

$5,197

$2,092

$360

$12,323

284
688
—

(179)
—
—

18

—
—

65
(3,410)
3,835

Balance at December 31, 2010 . . . . . . . . . . . . . . . . . . . . . . $ 4,353

$6,169

$1,913

$378

$12,813

(1) Represents the plan assets transferred in as part of the Alpro acquisition on July 2, 2009.

Defined Contribution Plans — Certain of our non-union personnel may elect to participate in savings and
profit sharing plans sponsored by us. These plans generally provide for salary reduction contributions to the plans
on behalf of the participants of between 1% and 20% of a participant’s annual compensation and provide for
employer matching and profit sharing contributions as determined by our Board of Directors. In addition, certain
union hourly employees are participants in company-sponsored defined contribution plans, which provide for
employer contributions in various amounts ranging from $24 to $91 per pay period per participant.

Multi-Employer Pension and Certain Union Plans — Certain of our subsidiaries contribute to various multi-
employer pension and certain union plans, which are administered jointly by management and union
representatives and cover substantially all full-time and certain part-time union employees who are not covered
by our other plans. The Multi-Employer Pension Plan Amendments Act of 1980 amended ERISA to establish
funding requirements and obligations for employers participating in multi-employer plans, principally related to
employer withdrawal from or termination of such plans. We could, under certain circumstances, be liable for
unfunded vested benefits or other expenses of jointly administered union/management plans. At this time, we
have not established any significant liabilities because withdrawal from these plans is not probable or reasonably
possible.

15. POSTRETIREMENT BENEFITS OTHER THAN PENSIONS

Certain of our subsidiaries provide health care benefits to certain retirees who are covered under specific
group contracts. As defined by the specific group contract, qualified covered associates may be eligible to receive
major medical insurance with deductible and co-insurance provisions subject to certain lifetime maximums.

Included in accumulated other comprehensive income at December 31, 2010 and 2009 are the following
amounts that have not yet been recognized in net periodic benefit cost: negative unrecognized prior service costs
of $225,000 ($138,000 net of tax) and $291,000 ($178,000 net of tax) and unrecognized actuarial losses of $4.2
million ($2.6 million net of tax) and $4.8 million ($2.9 million net of tax), respectively. The negative prior
loss included in accumulated other comprehensive income and expected to be
service cost and actuarial
recognized in net periodic benefit cost during the year ended December 31, 2011 is negative $66,000 ($40,000
net of tax) and $494,000 ($302,000 net of tax), respectively.

F-47

The following table sets forth the funded status of these plans:

Change in benefit obligation:
Benefit obligation at beginning of year . . . . . . . . . . . . . . .
Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Actuarial (gain) loss . . . . . . . . . . . . . . . . . . . . . . . . . .
Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Plan amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Plan curtailments . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Benefit obligation at end of year
. . . . . . . . . . . . . . . . . . . .
Fair value of plan assets at end of year . . . . . . . . . . . . . . . .

December 31

2010

2009

(In thousands)

$ 18,620
24
967
(48)
(2,012)
—
—

17,551
—

$ 15,736
51
937
4,367
(2,197)
(266)
(8)

18,620
—

Funded status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$(17,551)

$(18,620)

The unfunded portion of the liability of $17.6 million at December 31, 2010 is recognized in our

Consolidated Balance Sheet and includes $2.5 million classified as a current accrued postretirement liability.

A summary of our key actuarial assumptions used to determine the benefit obligation as of December 31,

2010 and 2009 follows:

December 31

2010

2009

Healthcare inflation:

Healthcare cost trend rate assumed for next year . . . . . . . . . .
Rate to which the cost trend rate is assumed to decline

8.70% 9.00%

(ultimate trend rate) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . .
Weighted average discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . .

Year of ultimate rate achievement

4.50% 4.50%
2029
4.68% 5.51%

2029

A summary of our key actuarial assumptions used to determine net periodic benefit cost follows:

Year Ended December 31

2010

2009

2008

9.00% 9.00% 10.01%

4.50% 5.40% 5.38%
2029
5.51% 6.32% 6.40%

2012

2014

Healthcare inflation:

Healthcare cost trend rate assumed for next year . . . . . . . . . . .
Rate to which the cost trend rate is assumed to decline

(ultimate trend rate) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Year of ultimate rate achievement . . . . . . . . . . . . . . . . . . . . . .
Weighted average discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-48

Year Ended December 31

2010

2009

2008

(In thousands)

Components of net periodic benefit cost:

Service and interest cost . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 991

$ 988

$3,319

Amortizations:

Prior service cost
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unrecognized net loss . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Effect of curtailment

(66)
524
—

(333)
1,061
(24)

(69)
623
—

Net periodic benefit cost

. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$1,449

$1,692

$3,873

Assumed health care cost trend rates have a significant effect on the amounts reported for the health care

plans. A one percent change in assumed health care cost trend rates would have the following effects:

Effect on total of service and interest cost

components . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect on postretirement obligation . . . . . . . . . . . . .

$

69
1,069

$ (61)
(956)

1-Percentage-
Point Increase

1-Percentage-
Point Decrease

(In thousands)

We expect

to contribute $2.5 million to the postretirement health care plans in 2011. Estimated

postretirement health care plan benefit payments for the next ten years are as follows:

2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Next five years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 2.5 million
1.8 million
1.7 million
1.7 million
1.5 million
6.5 million

16. FACILITY CLOSING AND REORGANIZATION COSTS

Approved plans within our multi-year initiatives and related charges, are summarized as follows:

Closure of facilities at Fresh Dairy Direct-Morningstar(1) . . . . . . . . . . . . . . . . . . .
Workforce reductions within Fresh Dairy Direct-Morningstar resulting from:

Year Ended December 31

2010

2009

2008

$21,350

(In thousands)
$30,097

$22,529

Realignment of finance and transaction processing activities(2) . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Management realignment(3)
Broad-based reduction of facility and distribution personnel(4) . . . . . . . . . . .

—
3,100
3,404

Other:

Department realignment(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,907

65
—
—

—

229
—
—

—

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$30,761

$30,162

$22,758

(1) These charges in 2010 primarily relate to a facility closure in Florence, South Carolina, an announced
facility closure in Baxley, Georgia, and efforts related to the optimization of our operations in Southern
California, as well as previously announced closures. Charges in 2009 primarily relate to four facility
closures in Flint, Michigan; Lincoln, Nebraska; Portsmouth, Virginia and Kingsport, Tennessee; as well as
previously announced closures. Charges in 2008 primarily relate to the closure of ice cream operations in

F-49

Hickory, North Carolina; and the closure of facilities in Kalispell, Montana and Denver, Colorado; as well
as previously announced closures in Detroit, Michigan; Union, New Jersey; Akron, Ohio; South Gate,
California; and Belleville, Pennsylvania. We expect to incur additional charges related to these facility
closures of $2.9 million, related to shutdown and other costs. As we continue the evaluation of our supply
chain, it is likely that we will close additional facilities in the future.

(3)

(2) Charges relate to the centralization of certain finance and transaction processing activities from local to
regional facilities. We do not expect to incur additional costs related to this initiative; however, we will
continue to evaluate additional opportunities for centralization of activities, which could result in additional
charges in the future.
In 2010, we realigned management positions within our Fresh Dairy Direct-Morningstar segment to
facilitate supply-chain and commercial focused functions across the segment. This resulted in the
elimination of the position filled by the then President of Fresh Dairy Direct and we incurred $3.1 million of
workforce reduction costs. As part of this initiative, we incurred $3.1 million of workforce reduction costs.
We do not expect additional costs related to this initiative; however, we continue to evaluate opportunities
to further align and integrate our Fresh Dairy Direct-Morningstar operations, which could result
in
additional charges in the future.

(4) These charges relate to a plan to reduce the workforce within our Fresh Dairy Direct-Morningstar segment
impacting approximately 230 positions. Implementation began during the second quarter of 2010 and was
carried out over the balance of the year. The reduction in workforce affected employees across the country
and resulted from operational changes from supply chain initiatives. The workforce reduction costs related
to this plan are part of an existing benefit arrangement; therefore, the full amount of expected severance
benefits was accrued during the second quarter of 2010. Additional supply chain initiatives are expected to
result in further broad-based reductions of facility and distribution personnel throughout 2011 and 2012. As
the specifics of such initiatives are being developed, the charges expected are currently not estimable.
In 2010, as a result of peer comparisons and our ongoing cost control initiatives, our management team
approved a multi-year cost reduction plan aimed at centralization, process improvement and talent
replacement, as well as business unit and functional organization redesigns. Charges relate to workforce
reduction costs associated with this plan. The plan was implemented during the fourth quarter of 2010
beginning with the redesign of certain functions within human resources, legal and finance, and is ultimately
expected to result in the elimination of approximately 150 to 200 positions throughout 2011 as each function
reorganizes its processes in line with the peer comparisons and internally developed functional blueprints as
approved by an executive operating team. As these individual plans and terminations are not yet approved,
future costs are not yet estimable.

(5)

Activity for 2010 and 2009 with respect to facility closing and reorganization costs is summarized below

and includes items expensed as incurred:

Accrued
Charges at
December 31,
2008

Charges Payments

Accrued
Charges at
December 31,
2009

(In thousands)

Charges Payments

Accrued
Charges at
December 31,
2010

Cash charges:

Workforce reduction costs . . . . . . . . .
Shutdown costs . . . . . . . . . . . . . . . . . .
Lease obligations after shutdown . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . .

$1,739
13
—
14

$ 6,950 $ (6,370)
(5,278)
(268)
(391)

5,288
268
396

$2,319
23
—
19

$13,011 $(11,470)
(2,426)
(254)
(566)

2,419
254
552

$3,860
16
—

5

Subtotal

. . . . . . . . . . . . . . . . . . . . . . . . . . .

$1,766

12,902 $(12,307)

$2,361

16,236 $(14,716)

$3,881

Noncash charges:

Write-down of assets(1) . . . . . . . . . . .
Loss on sale of related assets
. . . . . .
. . . . . . . . . . . . . .
Pension curtailment

Total charges . . . . . . . . . . . . . . . . . . . . . . .

16,315
—
945

$30,162

F-50

13,173
562
790

$30,761

(1) The write-down of assets relates primarily to owned buildings, land and equipment of those facilities identified for
closure. The assets were tested for recoverability at the time the decision to close the facilities was more likely than not
to occur. Estimates of future cash flows used to test the recoverability of the assets included the net cash flows directly
associated with and that are expected to arise as a direct result of the use and eventual disposition of the assets. The
inputs for the fair value calculation were based on assessment of an individual asset’s alternative use within other
production facilities, evaluation of recent market data and historical liquidation sales values for similar assets.

We are currently working through a multi-year initiative to optimize our manufacturing and distribution
capabilities. This initiative will have multiple phases as we evaluate and modify historical activities surrounding
purchasing, support, and decision-making infrastructure, supply chain, selling organization, brand building, and
product innovation. These initiatives will require investments in people, systems, tools, and facilities. As a direct
result of these initiatives, over the next several years, we will incur additional facility closing and reorganization
costs including:

• One-time termination benefits to employees;

• Write-down of operating assets prior to the end of their respective economic useful lives;

•

Shutdown costs, including those costs necessary to prepare abandoned facilities for closure; and

• Costs incurred after shutdown, such as lease obligations or termination costs, utilities and property

taxes.

We consider several factors when evaluating a potential facility closure, including, among other things, the
impact of such a closure on our customers, the impact on production, distribution and overhead costs, the
investment required to complete any such closure, and the impact on future investment decisions. Some facility
closures are pursued to improve our operating cost structure, while others enable us to avoid unnecessary capital
expenditures, allowing us to more prudently invest our capital expenditure dollars in our production facilities and
better serve our customers.

17. SUPPLEMENTAL CASH FLOW INFORMATION

Cash paid for interest and financing charges, net of

capitalized interest

. . . . . . . . . . . . . . . . . . . . . . . . . .
Cash paid (received) for taxes . . . . . . . . . . . . . . . . . . .

$233,616
9,184

$242,691
159,840

$301,795
(3,425)

Year Ended December 31

2010

2009

2008

(In thousands)

18. COMMITMENTS AND CONTINGENCIES

Contingent Obligations Related to Divested Operations — We have divested certain businesses in prior
years. In each case, we have retained certain known contingent obligations related to those businesses and/or
assumed an obligation to indemnify the purchasers of the businesses for certain unknown contingent liabilities,
including environmental liabilities. We believe that we have established adequate reserves which are immaterial
to the financial statements for potential liabilities and indemnifications related to our divested businesses.
Moreover, we do not expect any liability that we may have for these retained liabilities, or any indemnification
liability, to materially exceed amounts accrued.

Contingent Obligations Related to Milk Supply Arrangements — On December 21, 2001, in connection with
our acquisition of Legacy Dean, we purchased Dairy Farmers of America’s (“DFA”) 33.8% interest in our
operations. In connection with that transaction, we issued a contingent, subordinated promissory note to DFA in
the original principal amount of $40 million. The promissory note has a 20-year term that bears interest based on
the consumer price index. Interest will not be paid in cash but will be added to the principal amount of the note

F-51

annually, up to a maximum principal amount of $96 million. We may prepay the note in whole or in part at any
time, without penalty. The note will only become payable if we materially breach or terminate one of our related
milk supply agreements with DFA without renewal or replacement. Otherwise, the note will expire in 2021,
without any obligation to pay any portion of the principal or interest. Payments made under the note, if any,
would be expensed as incurred. We have not terminated, and we have not materially breached, any of our milk
supply agreements with DFA related to the promissory note. We have previously terminated unrelated supply
agreements with respect to several plants that were supplied by DFA. In connection with our goals of accelerated
cost control and increased supply chain efficiency, we continue to evaluate our sources of raw milk supply.

Insurance — We retain selected levels of property and casualty risks, primarily related to employee health
care, workers’ compensation claims and other casualty losses. Many of these potential losses are covered under
conventional insurance programs with third party carriers with high deductible limits. In other areas, we are self-
insured. These deductibles are $2.0 million for casualty claims but may vary higher or lower due to insurance
market conditions and risk. We believe that we have established adequate reserves to cover these claims. At
December 31, 2010 and 2009, we recorded accrued liabilities related to these retained risks of $187.3 million and
$206.1 million, respectively, including both current and long-term liabilities.

Lease and Purchase Obligations — We lease certain property, plant and equipment used in our operations
under both capital and operating lease agreements. Such leases, which are primarily for machinery, equipment
and vehicles, have lease terms ranging from one to 20 years. We did not have any material capital lease
obligations as of December 31, 2010 or 2009. Certain of the operating lease agreements require the payment of
additional rentals for maintenance, along with additional rentals based on miles driven or units produced. Certain
leases require us to guarantee a minimum value of the leased asset at the end of the lease. Our maximum
exposure under those guarantees is not a material amount. Rent expense was $158.5 million, $158.4 million and
$147.3 million for 2010, 2009 and 2008, respectively.

In June 2009, we announced our intention to relocate our corporate headquarters to a leased facility in
Dallas, Texas. The new facility is in close proximity to our previous headquarters. The relocation of personnel
was completed during 2010. The decision to relocate the headquarters was due in part to our growth and the
increased centralization of strategic, operational and functional personnel. The lease agreement for our previous
headquarters facility terminated at the end of 2010. In connection with the relocation, we incurred duplicate lease
expense, as well as move-related expenses in 2010. These costs were not material to our consolidated results of
operations.

Future minimum payments at December 31, 2010, under non-cancelable operating leases with terms in

excess of one year are summarized below (in thousands):

2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter

Operating
Leases

(In thousands)
$122,981
98,170
78,145
62,002
46,538
94,235

Total minimum lease payments . . . . . . . . . . . . . . . . . . . . .

$502,071

We have entered into various contracts, in the normal course of business, obligating us to purchase
minimum quantities of raw materials used in our production and distribution processes, including diesel fuel,
soybeans and organic raw milk. We enter into these contracts from time to time to ensure a sufficient supply of
raw ingredients. In addition, we have contractual obligations to purchase various services that are part of our
production process.

F-52

Litigation, Investigations and Audits — We are not party to, nor are our properties the subject of, any

material pending legal proceedings, other than as set forth below:

We were named, among several defendants, in two purported class action antitrust complaints filed on
July 5, 2007. The complaints were filed in the United States District Court for the Middle District of Tennessee,
Columbia Division, and allege generally that we and others in the milk industry worked together to limit the
price Southeastern dairy farmers are paid for their raw milk and to deny these farmers access to fluid Grade A
milk processing facilities (“dairy farmer actions”). A third purported class action antitrust complaint (“retailer
action”) was filed on August 9, 2007 in the United States District Court for the Eastern District of Tennessee,
Greeneville Division. The complaint in the retailer action was amended on March 28, 2008. The amended
complaint alleges generally that we, either acting alone or in conjunction with others in the milk industry,
lessened competition in the Southeastern United States for the sale of processed fluid Grade A milk to retail
outlets and other customers, and that the defendants’ conduct also artificially inflated wholesale prices for direct
milk purchasers. Plaintiffs in both the dairy farmer actions and the retailer action are seeking damages for the
alleged violations. If plaintiffs are successful and we are judged to have violated the antitrust laws, plaintiffs are
entitled to three times the damages caused by the violations found. Four additional purported class action
complaints were filed on August 27, 2007, October 3, 2007, November 15, 2007 and February 13, 2008 in the
United States District Court for the Eastern District of Tennessee, Greeneville Division. The allegations in these
complaints are similar to those in the dairy farmer actions.

On January 7, 2008, a United States Judicial Panel on Multidistrict Litigation transferred all of the pending
cases to the Eastern District of Tennessee, Greeneville Division. On April 1, 2008, the Eastern District Court
ordered the consolidation of the six dairy farmer actions, and ordered the retailer action to be administratively
coordinated with the consolidated dairy farmer actions. A motion to dismiss the dairy farmer actions was denied
on May 20, 2008, and an amended consolidated complaint was filed by the dairy farmer plaintiffs on June 20,
2008. A motion to dismiss the retailer action was denied on July 27, 2009. Motions for class certification were
filed in both actions on May 1, 2009. The motion for class certification in the dairy farmer action was granted on
September 7, 2010. A petition seeking leave to appeal that decision was filed with the Sixth Circuit on
September 21, 2010 and is currently pending. The motion for class certification in the retailer action is still
pending. A motion for summary judgment in the retailer action was granted in part and denied in part on
August 4, 2010. Defendants filed a motion for reconsideration on September 10, 2010, and filed a supplemental
motion for summary judgment as to the remaining claims on September 27, 2010. Those motions are currently
pending before the court. A motion for summary judgment in the dairy farmer action was filed on July 27, 2010
and remains pending. Fact discovery and expert discovery are complete in these matters, and expert reports have
been submitted. Presently, trial in the dairy farmer action is scheduled to begin in June 2011. If the Sixth Circuit
grants the petition to appeal the class certification motion, we expect that the trial will be postponed. We intend
to continue to vigorously defend against these lawsuits.

On June 29, 2009, another purported class action lawsuit was filed in the Eastern District of Tennessee,
Greeneville Division, on behalf of indirect purchasers of processed fluid Grade A milk (“indirect purchaser
action”). The allegations in this complaint are similar to those in the retailer action, but primarily involve state
law claims. Because the allegations in this complaint substantially overlap with the allegations in the retailer
action, on September 1, 2009, the Court granted the parties’ joint motion to stay all proceedings in the indirect
purchaser action pending the outcome of the summary judgment motions in the retailer action.

On October 8, 2009, we were named, among several defendants, in a purported class action antitrust complaint
filed in the United States District Court for the District of Vermont. The original complaint was amended on
January 21, 2010, and contained allegations similar in nature to that of the dairy farmer actions (noted above),
and alleges generally that we and others in the milk industry worked together to limit the price dairy farmers in
the Northeastern United States are paid for their raw milk and to deny these farmers access to fluid Grade A milk
processing facilities. A second similar complaint was filed by a different plaintiff on January 14, 2010. The
Company has reached an agreement with the plaintiffs to settle all claims against the Company in this action. The
settlement agreement is subject to court approval, and multiple motions related to the settlement agreement are

F-53

currently pending before the court. There can be no assurance that the court will approve the agreement as
proposed by the parties. Pursuant to the agreement the Company would be obligated to pay $30 million, and
would agree to other terms and conditions with respect to its raw milk procurement activities at certain of its
processing plants located in the Northeast.

On January 22, 2010, the United States Department of Justice (“DOJ”) and the States of Wisconsin, Illinois
and Michigan (“Plaintiff States”) filed a civil action in the Eastern District of Wisconsin (“DOJ lawsuit”)
alleging that the Company violated Section 7 of the Clayton Act when it acquired the Consumer Products
Division of Foremost Farms USA on April 1, 2009 (the “acquisition”) for an aggregate purchase price of
approximately $35 million. The DOJ and the Plaintiff States seek a declaration that the acquisition violates
Section 7 of the Clayton Act, divestiture by the Company of all assets and interests it acquired as part of the
acquisition, an order permanently enjoining the Company from further ownership and operation of the assets that
were part of the acquisition, and to compel the Company to provide certain advance notification of future
acquisitions involving school milk or fluid milk processing operations. A motion to partially dismiss the DOJ
lawsuit was denied on April 7, 2010. This matter is currently in the fact discovery stage. The Company intends to
vigorously defend against this action.

On April 28, 2009, a stockholder derivative complaint was filed purportedly on behalf of Dean Foods
Company (the “Company”) in the United States District Court for the Eastern District of Tennessee, Greeneville
division. The complaint names the Company’s then current directors, as well an officer of the Company, and a
former director among the defendants. The complaint alleges that the officers and directors breached their
fiduciary duties to the Company under Delaware law by approving the 2001 merger between the former Dean
Foods Company and Suiza Foods Corporation, and allegedly participating in, or failing to prevent, a purported
conspiracy to fix the price of Grade A milk. The complaint also names others in the milk industry as defendants
for allegedly aiding and abetting the officers’ and directors’ breach of their fiduciary duties and names the
Company as a nominal defendant. The plaintiffs are seeking, on behalf of the Company, an undisclosed amount
of damages and equitable relief. On August 7, 2009, the Company and other defendants filed a motion to dismiss
the complaint and a motion to transfer the case to the United States District Court for the Northern District of
Texas. The defendants’ motion to transfer the case was granted on March 31, 2010. On September 14, 2010, the
Court granted the motion to dismiss this matter. The plaintiffs subsequently filed an amended complaint, and the
Company and the other defendants have filed a motion to dismiss the amended complaint. On January 26, 2011,
the Court granted a motion to dismiss the amended complaint and entered a judgment dismissing the case with
predjudice.

On January 18, 2008, our subsidiary, Kohler Mix Specialties, LLC (“Kohler”), was named as a defendant in
a civil complaint filed in the Superior Court, Judicial District of Hartford. The plaintiff in the case is the
Commissioner of Environmental Protection of the State of Connecticut. The complaint alleges generally that
Kohler improperly discharged wastewater in to the waters of the State of Connecticut, and bypassed certain
wastewater treatment equipment in violation of certain Connecticut environmental regulations and Kohler’s
wastewater discharge permit. The plaintiff is seeking injunctive relief and civil penalties with respect to the
claims. On December 14, 2009, Kohler filed its answer to the complaint. This matter is currently in the fact
discovery stage.

At this time, it is not possible for us to predict the ultimate outcome of the matters set forth above.

Other than the matters set forth above, we are party from time to time to certain claims, litigations, audits
and investigations. Potential liabilities associated with the other matters referred to in this paragraph are not
expected to have a material adverse impact on our financial position, results of operations or cash flows.

Other — We are in discussion with numerous states, most but not all of whom, have appointed an agent to
conduct an examination of our books and records to determine whether we have complied with state unclaimed
property laws. In addition to seeking remittance of unclaimed property, some states may also seek interest and
penalties. At this time, it is not possible for us to predict the ultimate outcome of these potential examinations.

F-54

19. SEGMENT, GEOGRAPHIC AND CUSTOMER INFORMATION

We currently have two reportable segments: Fresh Dairy Direct-Morningstar and WhiteWave-Alpro.

In the first quarter of 2010, our Chief Executive Officer, who is our chief operating decision maker, changed
the way he evaluates the performance of our operations, develops strategy and allocates capital resources. As a
result, beginning in the first quarter of 2010, our Morningstar operations were aligned with our Fresh Dairy
Direct operations, so that our two reporting segments consisted of Fresh Dairy Direct-Morningstar and
WhiteWave-Alpro. This change reflects the divergence between the strategies and objectives of these two
segments. Our value-added branded operations at WhiteWave-Alpro added scale with the acquisition of Alpro in
July 2009 and are focused on driving growth through effective marketing and innovation. Our traditional dairy
operations at Fresh Dairy Direct-Morningstar are driven by a focus on cost and service leadership. We believe
these revised segments have increased internal focus and offered management and investors improved visibility
into the performance of the segments against their specific objectives. Our historical segment disclosures have
been recast to be consistent with our current presentation.

During the second quarter of 2010, we committed to a plan to sell the business operations of Rachel’s,
which provide organic branded dairy-based chilled yogurt, milk and related dairy products primarily in the
United Kingdom. The sale of these operations was completed on August 4, 2010. All Rachel’s operations,
previously reported within the WhiteWave-Alpro segment, have been reclassified as discontinued operations. See
Note 2.

Fresh Dairy Direct-Morningstar is our largest segment with 95 manufacturing facilities geographically
located largely based on local and regional customer needs and other market factors. Fresh Dairy Direct-
Morningstar manufactures, markets and distributes a wide variety of branded and private label dairy case
products, milk, ice cream, cultured dairy products, creamers, ice cream mix and other dairy products to retailers,
distributors, foodservice outlets, educational institutions and governmental entities across the United States. Our
products are primarily delivered through what we believe to be one of the most extensive refrigerated DSD
systems in the United States.

WhiteWave-Alpro includes the results of our Hero/WhiteWave joint venture. WhiteWave manufactures,
develops, markets and sells a variety of nationally branded plant-based beverages and other soy foods, such as
Silk plant based beverages such as soy, almond and coconut milks and cultured soy products, dairy and dairy-
related products, such as Horizon Organic milk and other dairy products and The Organic Cow dairy products,
and International Delight coffee creamers and LAND O LAKES creamers. Alpro is a leading provider of branded
soy-based beverages and food products in Europe and markets its products under the Alpro and Provamel brands.
Additionally, with our Hero/WhiteWave joint venture we have expanded the WhiteWave product footprint
beyond the dairy case to capitalize on the chilled fruit-based beverage opportunity with the introduction of
Fruit2Day. WhiteWave-Alpro sells its products to a variety of customers, including grocery stores, club stores,
natural foods stores, mass merchandisers, convenience stores, drug stores and foodservice outlets. The majority
of the WhiteWave-Alpro products are delivered through warehouse delivery systems.

We evaluate the performance of our segments based on sales and operating income or loss before gains and
losses on the sale of businesses, facility closing and reorganization costs and foreign exchange gains and losses.
The reporting segments do not include an allocation of the costs related to shared services such as audit services,
corporate development, human resources, strategy, tax or treasury. In addition, the expense related to share-based
compensation has not been allocated to our segments and is reflected entirely within the caption “Corporate and
Other”. Therefore, the measure of segment profit or loss presented below is before such items. Additionally, a
portion of our WhiteWave-Alpro products are sold through our DSD network. Those sales, together with their
related costs, are included in WhiteWave-Alpro for segment reporting purposes. Prior to October 2009, the
results of our WhiteWave/Hero joint venture were included in Corporate and Other. Those results are now
presented with our WhiteWave-Alpro operations.

F-55

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

Year Ended December 31
2009

2008

2010

(In thousands)

Net sales to external customers:

Fresh Dairy Direct-Morningstar . . . . . .
WhiteWave-Alpro . . . . . . . . . . . . . . . . .

$10,184,904
1,937,983

$ 9,480,812
1,632,970

$10,924,394
1,436,917

Total

. . . . . . . . . . . . . . . . . . . . . . .

$12,122,887

$11,113,782

$12,361,311

Intersegment sales:

Fresh Dairy Direct-Morningstar . . . . . .
WhiteWave-Alpro . . . . . . . . . . . . . . . . .

Total

. . . . . . . . . . . . . . . . . . . . . . .

Operating income:

Fresh Dairy Direct-Morningstar . . . . . .
WhiteWave-Alpro . . . . . . . . . . . . . . . . .

Total reportable segment operating
income . . . . . . . . . . . . . . . . . . . .
Corporate and Other . . . . . . . . . . . . . . .
Facility closing and reorganization

costs . . . . . . . . . . . . . . . . . . . . . . . . . .
Other expense . . . . . . . . . . . . . . . . . . . .

Total
Other (income) expense:

. . . . . . . . . . . . . . . . . . . . . . .

Interest expense . . . . . . . . . . . . . . . . . . .
Other (income) expense, net . . . . . . . . .

Consolidated income from continuing

operations before tax . . . . . . . . . . . . .

Depreciation and amortization:

Fresh Dairy Direct-Morningstar . . . . . .
WhiteWave-Alpro . . . . . . . . . . . . . . . . .
Corporate and Other . . . . . . . . . . . . . . .

$

$

$

$

$

167,523
107,923

275,446

504,442
166,269

$

$

$

143,276
137,997

281,273

756,673
130,268

$

$

$

147,697
125,794

273,491

681,070
112,454

670,711
(210,266)

886,941
(234,025)

793,524
(165,248)

(30,761)
(30,000)

399,684

248,301
161

151,222

186,566
68,353
21,161

$

$

(30,162)
—

622,754

246,510
(4,221)

380,465

176,257
58,933
18,740

$

$

(22,758)
—

605,518

308,178
1,123

296,217

180,661
46,012
10,146

Total

. . . . . . . . . . . . . . . . . . . . . . .

$

276,080

$

253,930

$

236,819

F-56

December 31

2010

2009

2008

(In thousands)

Assets:

Fresh Dairy Direct-Morningstar . . . . . . . . .
WhiteWave-Alpro . . . . . . . . . . . . . . . . . . . .
Corporate . . . . . . . . . . . . . . . . . . . . . . . . . . .
Assets Held For Sale . . . . . . . . . . . . . . . . . .

$5,442,229
1,984,893
412,431
117,114

$5,520,813
1,985,619
307,421
30,088

$5,391,696
1,368,341
244,351
35,804

Total

. . . . . . . . . . . . . . . . . . . . . . . . . .

$7,956,667

$7,843,941

$7,040,192

Capital expenditures:

Fresh Dairy Direct-Morningstar . . . . . . . . .
WhiteWave-Alpro . . . . . . . . . . . . . . . . . . . .
Corporate and Other . . . . . . . . . . . . . . . . . .

$ 199,660
52,255
50,059

$ 211,599
35,252
20,839

$ 165,613
85,128
5,398

Total

. . . . . . . . . . . . . . . . . . . . . . . . . .

$ 301,974

$ 267,690

$ 256,139

Geographic Information — Net sales and long-lived assets for domestic and foreign operations are shown in

the table below.

December 31

2010

2009

2008

(In thousands)

Net sales to external customers:

Domestic . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . .

$11,773,644
349,243

$10,934,271
179,511

$12,346,028
15,283

Long-lived assets:

Domestic . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . .

$ 5,652,676
487,775

$ 5,672,529
523,819

$ 5,540,711

—

During the second half of 2009 and during 2010, net sales from our foreign operations increased due to the
acquisition of Alpro, which was completed in July 2009, offset by the exit of certain business relationships
within our previously existing foreign operations.

Significant Customers — Our Fresh Dairy Direct-Morningstar and WhiteWave-Alpro segments each had a
single customer that represented greater than 10% of their net sales. Approximately 19% of our consolidated net
sales in 2010, 2009 and 2008, were to that same customer.

F-57

20. QUARTERLY RESULTS OF OPERATIONS (unaudited)

The following is a summary of our unaudited quarterly results of operations for 2010 and 2009.

2010
Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . .
Income (loss) from continuing

operations(4) . . . . . . . . . . . . . . . . . . . . . .
Net income (loss)(1)(4) . . . . . . . . . . . . . . . .
Net income (loss) attributable to Dean

Quarter

First

Second

Third

Fourth

(In thousands, except share data)

$2,961,143
747,794

$2,954,653
751,423

$3,054,130
749,629

$3,152,961
757,076

39,811
40,915

43,461
42,852

17,177
21,957

(22,709)
(22,968)

Foods Company(1)(4) . . . . . . . . . . . . . . .

43,152

44,787

24,296

(20,744)

Earnings (loss) per common share(2):

Basic . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . . .

2009
Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . .
Income from continuing operations . . . . . .
Net income(3) . . . . . . . . . . . . . . . . . . . . . . .
Net income attributable to Dean Foods

0.24
0.24

0.25
0.25

0.13
0.13

(0.11)
(0.11)

$2,691,473
755,527
75,000
75,200

$2,669,853
761,650
63,416
62,316

$2,762,709
785,533
46,126
47,104

$2,989,747
802,511
44,078
43,227

Company(3) . . . . . . . . . . . . . . . . . . . . . . .

76,246

64,143

49,653

50,266

Earnings per common share(2):

Basic . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . . .

0.49
0.48

0.38
0.38

0.28
0.27

0.28
0.27

(1) The results for the first, second, third and fourth quarters of 2010 include facility closing and reorganization

costs, net of tax, of $1.0 million, $4.2 million, $5.3 million and $9.3 million, respectively.

(2) Earnings per common share calculations for each of the quarters were based on the basic and diluted
weighted average number of shares outstanding for each quarter. The sum of the quarters may not
necessarily be equal to the full year earnings per common share amount.

(3) The results for the first, second, third and fourth quarters of 2009 include facility closing and reorganization

costs, net of tax, of $5.1 million, $7.0 million, $3.9 million and $2.6 million, respectively.

(4) Results for 2010 include a charge of $30.0 million related to a pending class action antitrust complaint

settlement and a non-cash income tax charge of $10.8 million. See Note 8 and Note 18.

F-58

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
Dean Foods Company
Dallas, Texas

We have audited the accompanying consolidated balance sheets of Dean Foods Company and subsidiaries
(the “Company”) as of December 31, 2010 and 2009, and the related consolidated statements of income,
stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2010. Our
audits also included the financial statement schedule listed in the Index at Item 15. These financial statements
and financial statement schedule are the responsibility of the Company’s management. Our responsibility is to
express an opinion on the financial statements and financial statement schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight
Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial
position of Dean Foods Company and subsidiaries as of December 31, 2010 and 2009 and the results of their
operations and their cash flows for each of the three years in the period ended December 31, 2010, in conformity
with accounting principles generally accepted in the United States of America. Also, in our opinion, such
financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a
whole, presents fairly, in all material respects, the information set forth therein.

In 2009, as discussed in Note 1 to the consolidated financial statements, the Company adopted the

provisions of new Accounting Standards relating to “Business Combinations”.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States), the Company’s internal control over financial reporting as of December 31, 2010, based on the
criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission and our report dated March 1, 2011 expressed an unqualified
opinion on the Company’s internal control over financial reporting.

/s/ DELOITTE & TOUCHE LLP

Dallas, Texas
March 1, 2011

F-59

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

During our three most recent fiscal years, no independent accountant who was engaged as the principal
accountant to audit our financial statements, nor any independent accountant who was engaged to audit a
significant subsidiary and on whom our principal accountant expressed reliance in its report, has resigned or been
dismissed.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and
procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act, referred to herein as “Disclosure
Controls”) as of the end of the period covered by this annual report. The controls evaluation was done under the
supervision and with the participation of management, including our Chief Executive Officer (CEO) and Chief
Financial Officer (CFO). Based upon our most recent controls evaluation, our CEO and CFO have concluded that
our Disclosure Controls were effective as of December 31, 2010.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting (as defined in rules 13a-15(f)
and 15d-15(f) under the Exchange Act) in the quarter ended December 31, 2010 that have materially affected, or
are reasonably likely to materially affect, our internal control over financial reporting.

MANAGEMENT REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Our management is responsible for establishing and maintaining adequate internal control over financial
reporting. Our internal control system was designed to provide reasonable assurance to our management and
Board of Directors regarding the preparation and fair presentation of published financial statements.

All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those
systems determined to be effective can provide only reasonable assurance with respect to financial statement
preparation and presentation.

We have assessed the effectiveness of our internal control over financial reporting as of December 31, 2010.
In making this assessment, we used the criteria established in Internal Control — Integrated Framework issued
by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on our assessment
we believe that, as of December 31, 2010, our internal control over financial reporting is effective based on those
criteria.

Our independent auditors, Deloitte & Touche LLP, a registered public accounting firm, are appointed by the
Audit Committee of our Board of Directors, subject to ratification by our stockholders. Deloitte & Touche LLP
has audited and reported on the consolidated financial statements of Dean Foods Company and subsidiaries and
our internal control over financial reporting. The reports of our independent auditors are contained in this annual
report on Form 10-K.

Our independent registered public accounting firm has issued an audit report on our internal control over

financial reporting. This report appears on page 57.

March 1, 2011

56

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
Dean Foods Company
Dallas, Texas

We have audited the internal control over financial reporting of Dean Foods Company and subsidiaries (the
“Company”) as of December 31, 2010, based on criteria established in Internal Control — Integrated Framework
issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company’s
is responsible for maintaining effective internal control over financial reporting and for its
management
assessment of the effectiveness of internal control over financial reporting, included in the accompanying
Management Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on
the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight
Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether effective internal control over financial reporting was maintained in all material respects. Our
audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a
material weakness exists, testing and evaluating the design and operating effectiveness of internal control based
on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We
believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed by, or under the supervision of,
the company’s principal executive and principal financial officers, or persons performing similar functions, and
effected by the company’s board of directors, management, and other personnel to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the company are being made
only in accordance with authorizations of management and directors of the company; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the
company’s assets that could have a material effect on the financial statements.

Because of the inherent limitations of internal control over financial reporting, including the possibility of
collusion or improper management override of controls, material misstatements due to error or fraud may not be
prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal
control over financial reporting to future periods are subject to the risk that the controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may
deteriorate.

In our opinion, the Company maintained, in all material respects, effective internal control over financial
reporting as of December 31, 2010, based on the criteria established in Internal Control — Integrated Framework
issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States), the Consolidated Financial Statements and financial statement schedule as of and for the year
ended December 31, 2010 of the Company and our report dated March 1, 2011 expressed an unqualified opinion
on those financial statements and financial statement schedule, and included an explanatory paragraph regarding
the adoption of the provisions of new Accounting Standards relating to “Business Combinations” in 2009.

/S/ DELOITTE & TOUCHE LLP

Dallas, Texas
March 1, 2011

57

Item 9B. Other Information

None.

Item 10. Directors, Executive Officers and Corporate Governance

Incorporated herein by reference to our proxy statement (to be filed) for our May 19, 2011 Annual Meeting

PART III

of Stockholders.

Item 11. Executive Compensation

Incorporated herein by reference to our proxy statement (to be filed) for our May 19, 2011 Annual Meeting

of Stockholders.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder

Matters

Incorporated herein by reference to our proxy statement (to be filed) for our May 19, 2011 Annual Meeting

of Stockholders.

Item 13. Certain Relationships and Related Transactions, and Director Independence

Incorporated herein by reference to our proxy statement (to be filed) for our May 19, 2011 Annual Meeting

of Stockholders.

Item 14. Principal Accountant Fees and Services

Incorporated herein by reference to our proxy statement (to be filed) for our May 19, 2011 Annual Meeting

of Stockholders.

58

PART IV

Item 15. Exhibits and Financial Statement Schedules

Financial Statements

The following Consolidated Financial Statements are filed as part of this report or are incorporated herein as

indicated:

Consolidated Balance Sheets as of December 31, 2010 and 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Consolidated Statements of Income for the years ended December 31, 2010, 2009 and 2008 . . . . . . . . . . .

Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2010, 2009 and

2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Consolidated Statements of Cash Flows for the years ended December 31, 2010, 2009 and 2008 . . . . . . . .

Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1.

Summary of Significant Accounting Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Page

F-1

F-2

F-3

F-5

F-6

F-6

2. Discontinued Operations, Divestitures and Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-10

3.

4.

5.

Investment in Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-12

Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-13

Property, Plant and Equipment

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-14

6. Goodwill and Intangible Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-14

7. Accounts Payable and Accrued Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-16

8.

Income Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-17

9. Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-20

10. Derivative Financial Instruments and Fair Value Measurement . . . . . . . . . . . . . . . . . . . . . . . . . . . F-33

11. Common Stock and Share-Based Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-36

12. Earnings per Share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-40

13. Other Comprehensive Income (Loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-41

14. Employee Retirement and Profit Sharing Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-41

15. Postretirement Benefits Other Than Pensions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-47

16. Facility Closing and Reorganization Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-49

17. Supplemental Cash Flow Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-51

18. Commitments and Contingencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-51

19. Segment, Geographic and Customer Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-55

20. Quarterly Results of Operations (unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-58

Report of Independent Registered Public Accounting Firm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-59

Financial Statement Schedules

Schedule II — Valuation and Qualifying Accounts

Exhibits

See Index to Exhibits.

59

Pursuant to the requirements of Section 13 or 15(d) 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.

SIGNATURES

By:

/S/ SCOTT K. VOPNI

Scott K. Vopni
Vice President and
Chief Accounting Officer

Dated March 1, 2011

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by

the following persons on behalf of the registrant and in the capacity and on the dates indicated.

Name

Title

Date

/S/ GREGG L. ENGLES

Gregg L. Engles

/S/ SHAUN P. MARA

Shaun P. Mara

/S/ SCOTT K. VOPNI

Scott K. Vopni

/S/ TOM C. DAVIS

Tom C. Davis

/S/ STEPHEN L. GREEN

Stephen L. Green

/S/

JOSEPH S. HARDIN, JR.
Joseph S. Hardin, Jr.

/S/

JANET HILL
Janet Hill

/S/ WAYNE MAILLOUX

Wayne Mailloux

/S/

JOHN R. MUSE
John R. Muse

/S/ HECTOR M. NEVARES

Hector M. Nevares

/S/

JIM L. TURNER
Jim L. Turner

/S/ DOREEN WRIGHT

Doreen Wright

Chief Executive Officer and
Chairman of the Board

March 1, 2011

Executive Vice President and Chief
Financial Officer

March 1, 2011

Vice President and Chief
Accounting Officer

March 1, 2011

Director

March 1, 2011

Director

March 1, 2011

Director

March 1, 2011

Director

March 1, 2011

Director

March 1, 2011

Director

March 1, 2011

Director

March 1, 2011

Director

March 1, 2011

Director

March 1, 2011

S-1

SCHEDULE II

DEAN FOODS COMPANY AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
Years Ended December 31, 2010, 2009 and 2008

Description

Year ended December 31, 2010
Allowance for doubtful accounts . . . . . . . . . . .
Deferred tax asset valuation allowances . . . . . .

Year ended December 31, 2009
Allowance for doubtful accounts . . . . . . . . . . .
Deferred tax asset valuation allowances . . . . . .

Year ended December 31, 2008
Allowance for doubtful accounts . . . . . . . . . . .
Deferred tax asset valuation allowances . . . . . .

Balance at
Beginning of
Period

Charged to
(Reduction in)
Costs and
Expenses

Other

Deductions

Balance at
End of Period

(In thousands)

$16,888
9,108

$ 7,956
(1,448)

$(1,379)
—

$(8,118)
—

$15,347
7,660

17,429
9,645

19,830
8,695

2,496
(537)

1,179
—

(4,216)
—

16,888
9,108

2,280
950

187
—

(4,868)
—

17,429
9,645

Exhibit No.

Description

Previously Filed as an Exhibit to and
Incorporated by Reference From

Date Filed

INDEX TO EXHIBITS

3.1

3.2

4.1

4.2

4.3

4.4

4.5

4.6

Amended and Restated Certificate of
Incorporation

Annual Report on Form 10-K for the
year ended December 31, 2001

April 1, 2002

Amended and Restated Bylaws

Current Report on Form 8-K

March 9, 2009

Specimen
Certificate

of

Common

Stock

Annual Report on Form 10-K for the
year ended December 31, 2001

April 1, 2002

us,

Indenture, dated as of May 15, 2006,
subsidiary
between
guarantors listed therein and The
Bank of New York Trust Company,
N.A., as trustee

the

Supplemental Indenture No. 1, dated
as of May 17, 2006, between us, the
subsidiary guarantors listed therein
and The Bank of New York Trust
Company, N.A., as trustee

Supplemental Indenture No. 2, dated
as of July 31, 2007, between us, the
subsidiary guarantors listed therein
and The Bank of New York Trust
Company, N.A., as trustee

Supplemental Indenture No. 6, dated
as of December 16, 2010, between
us, the subsidiary guarantors listed
therein and The Bank of New York
Mellon Trust Company, N.A., as
trustee

Registration
Rights Agreement,
dated as of December 16, 2010,
between
subsidiary
guarantors listed therein and several
initial purchasers listed therein

the

us,

Current Report on Form 8-K

May 19, 2006

Current Report on Form 8-K

May 19, 2006

Quarterly Report on Form 10-Q for
the quarter ended September 30,
2007

November 9, 2007

Current Report on Form 8-K

December 16, 2010

Current Report on Form 8-K

December 16, 2010

*10.1

*10.2

*10.3

*10.4

*10.5

Eighth Amended and Restated 1997
Stock Option and Restricted Stock
Plan

Third Amended and Restated 1989
Dean Foods Company Stock Awards
Plan

Annual Report on Form 10-K for the
year ended December 31, 2006

March 1, 2007

Annual Report on Form 10-K for the
year ended December 31, 2004

March 16, 2005

Amended and Restated Executive
Deferred Compensation Plan

Annual Report on Form 10-K for the
year ended December 31, 2006

March 1, 2007

Post-2004
Compensation Plan

Executive

Deferred

Annual Report on Form 10-K for the
year ended December 31, 2006

March 1, 2007

Revised and Restated Supplemental
Executive Retirement Plan

Annual Report on Form 10-K for the
year ended December 31, 2006

March 1, 2007

*10.6

*10.7

*10.8

*10.9

*10.10

*10.11

*10.12

*10.13

*10.14

*10.15

*10.16

*10.17

*10.18

*10.19

Exhibit No.

Description

Amendment No. 2 to the Dean
Supplemental
Foods
Executive Retirement Plan

Company

Dean Foods Company Amended and
Restated Executive Severance Pay
Plan

Previously Filed as an Exhibit to and
Incorporated by Reference From

Annual Report on Form 10-K for the
year ended December 31, 2006

Date Filed

March 1, 2007

Current Report on Form 8-K

November 19, 2010

Form of Amended and Restated
Change in Control Agreement for
our executive officers

Quarterly Report on Form 10-Q for
the quarter ended September 30,
2008

November 5, 2008

Forms of Amended and Restated
Change in Control Agreements for
certain other officers

Quarterly Report on Form 10-Q for
the quarter ended September 30,
2008

November 5, 2008

Dean Foods Company 2007 Stock
Incentive Plan

Quarterly Report on Form 10-Q for
the quarter ended June 30, 2007

August 9, 2007

Form of Non-Qualified
Stock
Option Agreement under the Dean
Stock
Foods
Incentive Plan

Company

2007

Form of Restricted Stock Unit
Award Agreement under the Dean
Foods
Stock
Incentive Plan

Company

2007

Filed herewith

Filed herewith

Form of Cash Performance Unit
Agreement under the Dean Foods
Company 2007 Stock Incentive Plan

Form of Phantom Shares Award
Agreement under the Dean Foods
Company 2007 Stock Incentive Plan

Filed herewith

Filed herewith

Form of Dean Cash Award
Agreement

Filed herewith

Form of Director’s Non-Qualified
Stock Option Agreement under the
Dean Foods Company 2007 Stock
Incentive Plan

Form of Director’s Restricted Stock
Unit Award Agreement under the
Dean Foods Company 2007 Stock
Incentive Plan

of

Director’s Master
Form
Restricted Stock Agreement under
the Dean Foods Company 2007
Stock Incentive Plan

Dean Foods Company Revised 2010
Short Term Incentive Compensation
Plans – Business Unit President and
Corporate

Filed herewith

Filed herewith

Quarterly Report on Form 10-Q for
the quarter ended June 30, 2008

August 8, 2008

Filed herewith

Exhibit No.

Description

Previously Filed as an Exhibit to and
Incorporated by Reference From

Date Filed

*10.20

*10.21

*10.22

*10.23

*10.24

*10.25

*10.26

*10.27

*10.28

*10.29

*10.30

*10.31

*10.32

*10.33

Non-Compete

Proprietary Information, Inventions
Agreement
and
between us and Joseph Scalzo dated
October 7, 2005

Amendment
Employment
to
Agreement between us and Joe
Scalzo dated November 18, 2008

Quarterly Report on Form 10-Q for
the quarter ended September 30,
2005

November 8, 2005

Annual Report on Form 10-K for the
year ended December 31, 2008

February 24, 2009

Employment Agreement between us
and Joseph Scalzo dated November
3, 2009

Quarterly Report on Form 10-Q for
the quarter ended September 30,
2009

November 4, 2009

Employment Agreement between us
and Joseph Scalzo dated August 20,
2010

Employment Agreement between us
and Jack F. Callahan dated April 27,
2006

Non-Compete

Proprietary Information, Inventions
and
Agreement
between us and Jack F. Callahan
dated May 9, 2006

Amendment
Employment
to
Agreement between us and Jack F.
Callahan dated November 21, 2008

Employment Agreement between us
and Shaun Mara dated April 21,
2010

Employment Agreement between us
and
dated
November 16, 2010

Shaun

Mara

Employment Agreement between us
dated
and
November 1, 2007

Tanner

Gregg

Non-Compete

Proprietary Information, Inventions
and
Agreement
between us and Gregg Tanner dated
November 1, 2007

Employment Agreement between us
dated
and
January 14, 2008

Kroeker

Harrald

Current Report on Form 8-K

August 23, 2010

Quarterly Report on Form 10-Q for
the quarter ended March 31, 2006

May 10, 2006

Quarterly Report on Form 10-Q for
the quarter ended June 30, 2006

August 9, 2006

Annual Report on Form 10-K for the
year ended December 31, 2008

February 24, 2009

Filed Herewith

Current Report on Form 8-K

November 19, 2010

Quarterly Report on Form 10-Q for
the quarter ended September 30,
2007

Quarterly Report on Form 10-Q for
the quarter ended September 30,
2007

November 9, 2007

November 9, 2007

Annual Report on Form 10-K for the
year ended December 31, 2007

February 28, 2008

Employment Agreement between us
and Paul Moskowitz dated May 3,
2007

Employment Agreement between us
and
dated
Greg McKelvey
January 15, 2008

Quarterly Report on Form 10-Q for
the quarter ended June 30, 2007

August 9, 2007

Annual Report on Form 10-K for the
year ended December 31, 2007

February 28, 2008

Exhibit No.

Description

Previously Filed as an Exhibit to and
Incorporated by Reference From

Date Filed

*10.34

*10.35

*10.36

*10.37

*10.38

*10.39

*10.40

*10.41

*10.42

*10.43

*10.44

10.45

10.46

Employment Agreement between us
dated
Greg McKelvey
and
November 1, 2008

Employment Agreement between us
and
dated
Debbie
March 14, 2007

Carosella

Employment Agreement between us
and Steven J. Kemps dated July 8,
2008

Employment Agreement between us
and Kelly Duffin-Maxwell dated
April 9, 2008

Employment Agreement between us
and Chris Sliva dated November 16,
2007

Employment Agreement between us
and Chris Sliva dated February 15,
2010

Annual Report on Form 10-K for the
year ended December 31, 2008

February 24, 2009

Annual Report on Form 10-K for the
year ended December 31, 2007

February 28, 2008

Quarterly Report on Form 10-Q for
the quarter ended June 30, 2008

August 8, 2008

Quarterly Report on Form 10-Q for
the quarter ended March 31, 2008

May 12, 2008

Quarterly Report on Form 10-Q for
the quarter ended June 30, 2009

August 6, 2009

Quarterly Report on Form 10-Q for
the quarter ended March 31, 2010

May 10, 2010

Employment Agreement between us
and Chris Sliva dated October 6,
2010

Quarterly Report on Form 10-Q for
the quarter ended September 30,
2010

November 19, 2010

Employment Agreement between us
and
dated
October 14, 2009

McPeak

Blaine

Employment Agreement between us
and
dated
February 18, 2011

Zanetich

Thomas

Summary of Terms of Employment
Agreement (translated from Dutch)
between us and Bernard Deryckere
dated April 13, 2001

Amendment
Employee
to
Agreement (translated from Dutch)
between us and Bernard Deryckere
dated February 4, 2011

Distribution Agreement between us
and TreeHouse Foods dated June 27,
2005

Tax
dated
Sharing Agreement
June 27, 2005 between us and
TreeHouse Foods

Annual Report on Form 10-K for the
year ended December 31, 2009

February 25, 2010

Filed herewith

Annual Report on Form 10-K for the
year ended December 31, 2009

February 25, 2010

Filed herewith

Current Report on Form 8-K

June 27, 2005

Current Report on Form 8-K

June 27, 2005

Exhibit No.

Description

Previously Filed as an Exhibit to and
Incorporated by Reference From

Date Filed

10.47

10.48

10.49

10.50

10.51

10.52

10.53

10.54

of

11

Amendment No.
to Fourth
Amended and Restated Receivables
Purchase Agreement among certain
subsidiaries
Foods
Company, as sellers, the Servicers,
Financial
the Companies,
Institutions (each as defined in the
agreement) and Bank One NA, as
Agent

Dean

the

and

Restated
Fifth Amended
Receivables Purchase Agreement,
dated as of April 2, 2007 among
Dairy Group Receivables L.P., Dairy
L.P.,
Group
WhiteWave Receivables, L.P., as
the Servicers, Companies
Sellers;
and Financial
listed
Institutions
therein; and JPMorgan Chase Bank,
N.A., as Agent

Receivables

II,

Amendment No. 3 to Fifth Amended
and Restated Receivables Purchase
and Limited Waiver
Agreement
dated March 31, 2008

Amendment No. 4 to fifth Amended
and Restated Receivables Purchase
Agreement dated April 4, 2008

Amendment No. 5 to Fifth Amended
and Restated Receivables Purchase
and Limited Waiver
Agreement
dated April 30, 2008

Amendment No. 7 to Fifth Amended
and Restated Receivables Purchase
Agreement and Reaffirmation of
Performance Undertaking
dated
March 30, 2009

Amendment No. 9 to Fifth Amended
and Restated Receivables Purchase
Agreement and Reaffirmation of
Performance Undertaking
dated
March 29, 2010

to

10

Amendment No.
Fifth
Amended and Restated Receivables
Purchase
and
Reaffirmation
Performance
Undertaking dated June 30, 2010

Agreement

of

Current Report on Form 8-K

November 21, 2006

Current Report on Form 8-K

April 4, 2007

Current Report on Form 8-K

April 4, 2008

Current Report on Form 8-K

April 4, 2008

Current Report on Form 8-K

May 1, 2008

Current Report on Form 8-K

April 3, 2009

Current Report on Form 8-K

March 31, 2010

Current Report on Form 8-K

July 1, 2010

Exhibit No.

Description

Previously Filed as an Exhibit to and
Incorporated by Reference From

Date Filed

10.55

10.56

10.57

12

21

23

31.1

31.2

32.1

32.2

99

Current Report on Form 8-K

July 1, 2010

Current Report on Form 8-K

December 9, 2010

Second Amended
and Restated
Credit Agreement, dated as of
April 2, 2007, as amended and
restated as of June 30, 2010, among
Dean Foods Company; J.P. Morgan
Securities, Inc., Banc of America
Securities
Fargo
Securities, LLC, as Lead Arrangers;
JPMorgan Chase Bank, National
Association,
Administrative
Agent; Bank of America, N.A., as
Syndication Agent; and certain other
lenders that are parties thereto

LLC, Wells

as

to

11

Fifth
Amendment No.
Amended and Restated Receivables
Purchase
and
Reaffirmation
Performance
of
Undertaking dated December 9,
2010

Agreement

1

to Second
Amendment No.
Amended
and Restated Credit
Agreement, dated as of December 9,
2010

Current Report on Form 8-K

December 9, 2010

Computation of Ratio of Earnings to
Fixed Charges

Filed herewith

List of Subsidiaries

Filed herewith

Consent of Deloitte & Touche LLP

Filed herewith

Certification of Chief Executive
Officer pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002

Certification
of Chief Financial
Officer pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002

Certification of Chief Executive
Officer pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002

Certification
of Chief Financial
Officer pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002

Supplemental Unaudited Financial
Information
for Dean Holding
Company

Filed herewith

Filed herewith

Filed herewith

Filed herewith

Filed herewith

101.INS

XBRL Instance Document(1).

101.SCH

XBRL Taxonomy Extension Schema Document(1).

101.CAL

XBRL Taxonomy Calculation Linkbase Document(1).

101.DEF

XBRL Taxonomy Extension Definition Linkbase Document(1).

101.LAB

XBRL Taxonomy Label Linkbase Document(1).

101.PRE

XBRL Taxonomy Presentation Linkbase Document(1).

(1) Submitted electronically herewith.

* This exhibit is a management or compensatory contract.

Attached as Exhibit 101 to this report are the following materials from Dean Foods Company’s Annual
Report on Form 10-K for the fiscal year ended December 31, 2010, formatted in XBRL (eXtensible Business
Reporting Language): (i) the Consolidated Statements of Income for the years ended December 31, 2010, 2009
and 2008, (ii) the Consolidated Balance Sheets as of December 31, 2010 and 2009, (iii) the Consolidated
Statements of Stockholders’ Equity for the years ended December 31, 2010, 2009 and 2008, (iv) the
Consolidated Statements of Cash Flows for the years ended December 31, 2010, 2009 and 2008, and (v) Notes to
Consolidated Financial Statements, tagged as blocks of text.

In accordance with Rule 406T of Regulation S-T, the XBRL-related information in Exhibit 101 to this
Annual Report on Form 10-K is deemed not filed or part of a registration statement or prospectus for purposes of
sections 11 or 12 of the Securities Act, is deemed not filed for purposes of section 18 of the Exchange Act, and
otherwise is not subject to liability under these sections.

EXHIBIT 31.1

CERTIFICATION

I, Gregg L. Engles, certify that:

1. I have reviewed this annual report on Form 10-K of Dean Foods Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report,
fairly present in all material respects the financial condition, results of operations and cash flows of the registrant
as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over
financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and
procedures to be designed under our supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over
financial reporting to be designed under our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in
this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of
the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that
occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of
an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s
internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of
internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s
board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control
over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a

significant role in the registrant’s internal control over financial reporting.

March 1, 2011

/s/ GREGG L. ENGLES
Chairman of the Board and
Chief Executive Officer

EXHIBIT 31.2

CERTIFICATION

I, Shaun P. Mara, certify that:

1. I have reviewed this annual report on Form 10-K of Dean Foods Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report,
fairly present in all material respects the financial condition, results of operations and cash flows of the registrant
as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over
financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and
procedures to be designed under our supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over
financial reporting to be designed under our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in
this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of
the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that
occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of
an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s
internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of
internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s
board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control
over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a

significant role in the registrant’s internal control over financial reporting.

/s/ SHAUN P. MARA
Executive Vice President and
Chief Financial Officer

March 1, 2011

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

EXHIBIT 32.1

In connection with the Annual Report on Form 10-K of Dean Foods Company (the “Company”) for the
fiscal year ended December 31, 2010, as filed with the Securities and Exchange Commission on the date hereof
(the “Report”), I, Gregg L. Engles, Chairman of the Board and Chief Executive Officer of the Company, certify,
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that
to my knowledge the Report fully complies with the requirements of Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934, as amended, and the information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations of the Company.

/s/ GREGG L. ENGLES

Gregg L. Engles
Chairman of the Board and
Chief Executive Officer

March 1, 2011

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

EXHIBIT 32.2

In connection with the Annual Report on Form 10-K of Dean Foods Company (the “Company”) for the
fiscal year ended December 31, 2010, as filed with the Securities and Exchange Commission on the date hereof
(the “Report”), I, Shaun P. Mara, Executive Vice President and Chief Financial Officer of the Company, certify,
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that
to my knowledge the Report fully complies with the requirements of Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934, as amended, and the information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations of the Company.

/s/ SHAUN P. MARA

Shaun P. Mara
Executive Vice President and
Chief Financial Officer

March 1, 2011

ADDITIONAL INFORMATION

Reconciliations
The adjusted financial results contained herein are from continuing operations and are adjusted to eliminate the
net expense or net gain related to the items identified below. This information is provided in order to allow
investors to make meaningful comparisons of the Company’s operating performance between periods and to
view the Company’s business from the same perspective as Company management. Because the Company
cannot predict the timing and amount of charges associated with one-time charges and other non-recurring items,
closed or anticipated to close transaction-related costs, gains or losses on foreign exchange forward contracts,
facility closings and reorganizations, operating losses attributable to our 50% interest in the Hero/WhiteWave
joint venture that we do not own, and certain tax adjustments, management does not consider these costs when
evaluating the Company’s performance, when making decisions regarding the allocation of resources,
in
determining incentive compensation for management, or in determining earnings estimates. The adjusted
financial results contained herein reflect the following adjustments for the items described above: an adjustment
of $72 million to consolidated operating income of $400 million in 2010; an adjustment of $71 million to
consolidated operating income of $623 million in 2009; an adjustment of $0.30 per diluted share to diluted
earnings per share of $0.50 in 2010; an adjustment of $0.21 per diluted share to diluted earnings per share of
$1.38 in 2009; and an adjustment of $302 million to net cash provided by continuing operations of $526 million
in 2010. In addition, our WhiteWave-Alpro segment results reflect the following adjustments for operating losses
in the Hero/WhiteWave joint venture: an adjustment of $9 million to operating income of $166 million in 2010;
and an adjustment of $13 million to operating income of $130 million in 2009. A full reconciliation of these
measures calculated according to GAAP and on an adjusted basis is contained in our press releases, which are
publicly available at www.deanfoods.com.

How Has Our Stock Performed?
The following graph compares the cumulative total return of our common stock from December 31, 2005
through December 31, 2010, compared to the Standard & Poor’s 500 Composite Index, of which we are a
component, and a peer group of United States consumer packaged goods companies. The graph assumes a $100
investment on December 31, 2005, with dividends reinvested. Points plotted are as of December 31 of each year.
The stock price performance shown on this graph may not be indicative of future performance.

The peer group that we have selected includes 18 manufacturers of food, beverages and other consumer packaged
goods. This group includes the following companies: Campbell Soup Company, The Clorox Company, Colgate-
Palmolive Company, ConAgra Foods, Inc., Dr. Pepper Snapple Group Inc. (for 2008 and 2009 only following its
spinoff from Cadbury Schweppes plc in 2008), General Mills, Inc., H.J. Heinz Company, The Hershey Company,
Hormel Foods Corporation, The J.M. Smucker Company, Kellogg Company, Kimberly-Clark Corporation, Kraft
Foods Inc., Molson-Coors Brewing Company, Ralcorp Holdings, Inc., Sara Lee Corporation, Smithfield Foods,
Inc., and Tyson Foods, Inc. This is the same peer group that the Compensation Committee of our Board of
Directors has selected to compare us with for purposes of determining our executive compensation.

160

140

120

100

80

60

40

20

S
R
A
L
L
O
D

0
2005

2006

2007

2008

2009

2010

DEAN FOODS NEW -NYSE

PEER GROUP

S&P 500

Board of Directors and Executive Ofﬁ cers

BOARD OF DIRECTORS
Gregg L. Engles
Chairman of the Board and 
Chief Executive Ofﬁ cer 
Dean Foods Company

EXECUTIVE 
LEADERSHIP TEAM
Gregg L. Engles
Chairman of the Board and 
Chief Executive Ofﬁ cer

Tom C. Davis
Chief Executive Ofﬁ cer 
The Concorde Group

Bernard P.J. Deryckere
Chief Executive Ofﬁ cer, 
Alpro

Stephen L. Green
General Partner
Canaan Partners

Joseph S. Hardin, Jr.
Former Chief Executive 
Ofﬁ cer, Kinko’s Inc.

Janet Hill
Principal
Hill Family Advisors

J. Wayne Mailloux
Former Senior Vice President 
PepsiCo Inc.

John R. Muse
Chairman
HM Capital Partners LLC

Hector M. Nevares
Managing Partner
Suiza Realty SE

Jim L. Turner
Principal
JLT Beverages L.P.

Doreen A. Wright
Former Chief Information
Ofﬁ cer, Campbell Soup 
Company

Kelly Dufﬁ n-Maxwell
Executive Vice President, 
Research and Development

Steven J. Kemps
Executive Vice President, 
General Counsel and 
Corporate Secretary

Shaun P. Mara
Executive Vice President and 
Chief Financial Ofﬁ cer

Gregory A. McKelvey
Executive Vice President and 
Chief Strategy and 
Transformation Ofﬁ cer

Blaine E. McPeak
President, 
WhiteWave Foods Company

Christopher Sliva
Chief Commercial Ofﬁ cer

Gregg A. Tanner
Executive Vice President and 
Chief Supply Chain Ofﬁ cer

Thomas N. Zanetich
Executive Vice President, 
Human Resources

TRANSFER AGENT
BNY Mellon Shareowner 
    Services
480 Washington Boulevard
Jersey City, New Jersey 07310
tel: 866.557.8698
www.bnymellon.com/
shareowner/equityaccess

AUDITOR
Deloitte & Touche LLP
2200 Ross Avenue
Suite 1600
Dallas, Texas 75201
tel: 214.840.7000

MARKET INFORMATION

NYSE: DF

ANNUAL MEETING
May 19, 2011, 10 a.m.
Dallas Museum of Art
1717 North Harwood Street
Dallas, Texas 75201

CORPORATE HEADQUARTERS
Dean Foods Company
2711 North Haskell Avenue 
Suite 3400
Dallas, Texas 75204
tel: 214.303.3400
fax: 214.303.3499
www.deanfoods.com

 
 
 
 
 
2711 North Haskell Avenue 
Suite 3400  
Dallas, Texas 75204  
214.303.3400  
www.deanfoods.com