Cautionary Statement Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q (the "Form 10-Q") 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 our current expectations and our projections about future events and are not statements of historical fact. Forward-looking statements include statements concerning our 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-Q are based upon information available to us as of the filing date of this Form 10-Q and we undertake no obligation to update any of these forward-looking statements, except as required by law. You should not place undue reliance on these forward-looking statements. These 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 sections entitled, "Part II - Item 1A - Risk Factors" in our Quarterly Report on Form 10-Q for our quarter ended June 30, 2009, "Part I - Item 1A - Risk Factors" in our 2008 Annual Report on Form 10-K and elsewhere in this Form 10-Q. You should carefully consider the risks and uncertainties described under these sections.

Business Overview

We are one of the leading food and beverage companies in the United States. Our Fresh Dairy Direct segment ("Fresh Dairy Direct"), previously referred to as DSD Dairy, 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. Additionally, our WhiteWave-Morningstar segment markets and sells a variety of nationally branded soy, dairy and dairy related products, private label cultured and extended shelf life dairy products and with the recent acquisition of Alpro, is now a leading provider of branded soy-based beverage and food products in Europe.

Fresh Dairy Direct - Fresh Dairy Direct is our largest segment, with approximately 75% of our consolidated net sales for the three and nine months ended September 30, 2009. Fresh Dairy Direct manufactures, markets and distributes a wide variety of branded and private label dairy case products, including milk, creamers, ice cream, juices and teas, to retailers, distributors, foodservice outlets, educational institutions and governmental entities across the United States. Due to the perishable nature of its products, Fresh Dairy Direct 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 has one of the most extensive refrigerated DSD systems in the United States. Fresh Dairy Direct 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 Fresh Dairy Direct's corporate sales department.

WhiteWave-Morningstar - WhiteWave-Morningstar's net sales were approximately 25% of our consolidated net sales for the three and nine months ended September 30, 2009. WhiteWave-Morningstar manufactures, develops, markets and sells a variety of nationally branded soy, dairy and dairy-related products such as Silk® soymilk and cultured soy products, Horizon Organic ® milk and other dairy products, The Organic Cow® organic dairy, International Delight® coffee creamers, LAND O LAKES® creamers and fluid dairy products and Rachel's Organic® dairy products. We license the LAND O LAKES name from a third party. With the recent acquisition of Alpro, White Wave-Morningstar now offers branded soy-based beverages and food products in Europe, marketing its products under the Alpro® and Provamel® brands. WhiteWave-Morningstar also includes private label cultured and extended shelf life dairy products including ice cream mix, sour and

whipped cream, yogurt and cottage cheese. WhiteWave-Morningstar 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-Morningstar sells its products through a combination of internal and external sales forces.

Recent Developments

Developments Since January 1, 2009

Current Dairy Environment - During the first nine months of 2009, conventional raw milk prices have been significantly lower than the historically high levels experienced in 2008 and 2007 with a generally increasing price trend as we closed out the third quarter. We expect the average Class I mover will continue to rise over the balance of the year and into 2010. However, with continued sluggish global demand and United States and global dairy inventories at relatively high levels, we do not expect a return in 2010 to the record conventional milk prices we experienced in 2008 or 2007.

Organic Milk Environment - During the first nine months of 2009, we have continued to experience a slowing of growth in the organic milk category from 2008, declining to relatively flat year-over-year levels in the third quarter of 2009 as consumers have become more price sensitive to organic milk due to the current decline in the economic environment coupled with the lower cost of conventional milk and, as a result, we may experience a continued softening in sales in this category. 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 branded position as we balance market share considerations against profitability.

Appointment of Joe Scalzo as Dean Foods Chief Operating Officer ("COO") - On October 21, 2009, we announced the promotion of Joe Scalzo to COO, effective November 1. In his new role, Mr. Scalzo will oversee all of our operations, including Fresh Dairy Direct, WhiteWave, Morningstar, Alpro and the Hero/Whitewave joint venture, as well as key strategic functions including worldwide supply chain and research and development.

Acquisitions - On July 2, 2009, we completed the acquisition of the Alpro division of Vandemoortele, N.V. ("Alpro"), a privately held food company based in Belgium, for an aggregate purchase price of €313.5 million ($439.0 million), excluding transaction costs that were expensed as incurred. Alpro manufactures and sells branded soy-based beverages and food products in Europe. The acquisition of Alpro will provide opportunities to leverage the collective strengths of our combined businesses across a global soy beverages and related products category. During the nine months ended September 30, 2009, we completed three other acquisitions of businesses for an aggregate purchase price of approximately $53.0 million subject to final closing adjustments and excluding transaction costs that were expensed as incurred. All of these acquisitions were funded with borrowings under our senior revolving credit facility.

We recorded approximately $11.6 million and $24.4 million in acquisition-related expenses during the three and nine months ended September 30, 2009, respectively, in connection with these acquisitions, as well as other non-material transactional activities. These costs were included in general and administrative expenses in our condensed consolidated statements of income.

On October 11, 2009, we completed the acquisition of a manufacturer, marketer and distributor of quality branded milk, juice, chilled beverages and other dairy products for an aggregate purchase price of $90.0 million, subject to final closing adjustments and excluding transaction costs that were expensed as incurred.

Facility Closings and Reorganization Activities - We approved and announced our intent to effect the closure of four facilities within Fresh Dairy Direct during 2009. We recorded approximately $14.9 million in related impairment charges and $11.0 million in employee termination and other costs associated with these closures during the nine months ended September 30, 2009. Total facility closing and reorganization costs were $26.0 million during the nine months ended September 30, 2009. See Note 11 to our condensed consolidated financial statements.

Equity Offering - In May 2009, we issued and sold 25.4 million shares of our common stock in a public offering. We received net proceeds of $444.5 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.

Noncontrolling Interest - Beginning January 1, 2009, in conjunction with entering into several new agreements between us and the Hero/WhiteWave joint venture, we have concluded that, despite the legal ownership structure, we are the primary beneficiary of the joint venture and 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 noncontrolling interest's share in the equity of the joint venture is presented in the condensed consolidated balance sheets and condensed consolidated statement of stockholders' equity and the net loss attributable to the noncontrolling interest is presented in the condensed consolidated statements of income. We recorded a net loss attributable to our noncontrolling interest of $5.4 million during the nine months ended September 30, 2009.

Results of Operations

The following table presents certain information concerning our financial
results, including information presented as a percentage of net sales.



                                           Three Months Ended September 30                    Nine Months Ended September 30
                                            2009                     2008                     2009                     2008
                                      Dollars    Percent       Dollars    Percent       Dollars    Percent       Dollars    Percent
                                                                         (Dollars in millions)
Net sales                            $ 2,773.5     100.0 %    $ 3,194.7     100.0 %    $ 8,157.7     100.0 %    $ 9,374.2     100.0 %
Cost of sales                          1,985.5      71.6        2,463.0      77.1        5,846.8      71.7        7,214.6      77.0

Gross profit(1)                          788.0      28.4          731.7      22.9        2,310.9      28.3        2,159.6      23.0
Operating costs and expenses:
Selling and distribution                 474.5      17.1          468.5      14.6        1,339.0      16.4        1,368.1      14.6
General and administrative               167.5       6.0          120.7       3.8          453.2       5.6          345.0       3.7
Amortization of intangibles                2.5       0.1            1.7       0.1            6.4       0.1            5.0       0.1
Facility closing, reorganization           6.3       0.2            9.0       0.3           26.0       0.3           16.4       0.1

Total operating costs and expenses       650.8      23.4          599.9      18.8        1,824.6      22.4        1,734.5      18.5

Total operating income               $   137.2       5.0 %    $   131.8       4.1 %    $   486.3       5.9 %    $   425.1       4.5 %

(1) As disclosed in Note 1 to our condensed consolidated financial statements in our 2008 Annual Report on Form 10-K, 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.

Quarter Ended September 30, 2009 Compared to Quarter Ended September 30, 2008 -
Consolidated Results

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



                                            Quarter Ended September 30
                                                       $ Increase/       % Increase/
                                2009        2008       (Decrease)        (Decrease)
                                              (Dollars in millions)
     Fresh Dairy Direct       $ 2,061.6   $ 2,523.4   $      (461.8 )          (18.3 )%
     WhiteWave-Morningstar        709.7       671.3            38.4              5.7 %
     Corporate and Other(1)         2.2          -              2.2               -

     Total                    $ 2,773.5   $ 3,194.7   $      (421.2 )          (13.2 )%

(1) Includes Hero/WhiteWave joint venture.

The change in net sales was due to the following:

                                                         Quarter Ended September 30, 2009
                                                        vs Quarter Ended September 30, 2008
                                                                          Pricing
                                                                        And Product          Total Increase/
                                      Acquisitions      Volume          Mix Changes             (Decrease)
                                                               (Dollars in millions)
Fresh Dairy Direct                   $         57.7     $ (31.9 )      $      (487.6 )      $           (461.8 )
WhiteWave-Morningstar                          82.4       (30.7 )              (13.3 )                    38.4
Corporate and Other(1)                           -          2.2                   -                        2.2

Total                                $        140.1     $ (60.4 )      $      (500.9 )      $           (421.2 )

(1) Includes Hero/WhiteWave joint venture.

Net sales decreased $421.2 million during the third quarter of 2009 as compared to the third quarter of 2008 primarily due to lower pricing in our Fresh Dairy Direct segment as significantly lower commodity costs were passed through to customers. Within Fresh Dairy Direct, recent acquisitions and strong execution drove higher fluid milk sales volumes of 2.5%, partly offset by lower sales volumes in other products. Net sales in our WhiteWave-Morningstar segment increased primarily due to the acquisition of Alpro, partly offset by lower net sales at Morningstar due to the pass through of lower commodity costs to customers and slightly lower sales volume, coupled with the exit of certain business relationships within the WhiteWave business.

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, including costs to operate and maintain our coolers and freezers. Cost of sales decreased $477.5 million, or 19%, in the third quarter of 2009 from the third quarter of 2008 primarily due to continued favorable commodity prices, particularly raw milk costs, as well as benefits from our strategic initiatives across our manufacturing network. Although commodity prices remain low compared to 2008 levels, we anticipate that these conditions will moderate in the near term.

Operating Costs and Expenses - Our operating expenses increased $50.9 million, or 8%, in the third quarter of 2009 as compared to the same period in the prior year. Significant changes to operating costs and expenses include the following:

• General and administrative costs increased $46.8 million primarily driven by investments in supply chain, information technology and research and development; higher personnel-related costs, including incentive-based compensation, defined benefit plan expenses, share-based compensation expense and additional headcount; higher professional fees and other outside services primarily related to our strategic initiatives, as well as higher legal fees and transaction-related costs.

• Selling and distribution costs increased $6.0 million primarily due to incremental selling and marketing costs particularly related to our Hero/WhiteWave joint venture and our recent acquisition of Alpro, partly offset by lower fuel costs and benefits from our strategic initiatives across our distribution network.

• Net facility closing and reorganization costs decreased $2.7 million during the third quarter of 2009 compared to the third quarter of 2008. See Note 11 to our condensed consolidated financial statements for further information on our facility closing and reorganization activities.

Other (Income) Expense - Interest expense decreased to $59.5 million in the third quarter of 2009 from $74.7 million in the third quarter of 2008, primarily due to lower average debt balances and lower interest rates during the third quarter of 2009 compared to the prior year.

Income Taxes - Income tax expense was recorded at an effective rate of 38.9% in the third quarter of 2009 compared to 34.1% in the third quarter of 2008. Our effective tax rate varies primarily based on the relative earnings of our business units. During the third quarter of 2008, our effective tax rate was reduced due to settlement of taxing authority examinations, adjustments to credit carryforwards, and the effects of state tax law changes.

Quarter Ended September 30, 2009 Compared to Quarter Ended September 30, 2008 -
Results by Segment

Fresh Dairy Direct

The key performance indicators of our Fresh Dairy Direct segment are sales
volumes, gross profit and operating income.



                                                Quarter Ended September 30
                                              2009                     2008
                                        Dollars    Percent       Dollars    Percent
                                                  (Dollars in millions)
      Net sales                        $ 2,061.6     100.0 %    $ 2,523.4     100.0 %
      Cost of sales                      1,494.3      72.5        1,958.4      77.6

      Gross profit                         567.3      27.5          565.0      22.4
      Operating costs and expenses         421.7      20.5          424.5      16.8

      Total segment operating income   $   145.6       7.0 %    $   140.5       5.6 %

Net Sales - Fresh Dairy Direct's net sales decreased 18% during the third quarter of 2009 as compared to the third quarter of 2008 primarily due to lower pricing driven by significantly lower commodity costs passed through to customers. Recent acquisitions and strong execution drove higher fluid milk sales volumes of 2.5%, partly offset by lower sales volumes in other products.

Fresh Dairy Direct 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 our Fresh Dairy Direct segment'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 the third quarter of 2009 compared to the third quarter of 2008:

                                                Quarter Ended September 30*
                                                2009         2008     % Change
      Class I mover(1)                       $    10.41    $  18.97        (45 )%
      Class I raw skim milk mover(1)(2)            6.26       13.58        (54 )
      Class I butterfat mover(2)(3)                1.25        1.68        (26 )
      Class II raw skim milk minimum(1)(4)         6.79       11.55        (41 )
      Class II butterfat minimum(3)(4)             1.25        1.75        (29 )

* 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" in our 2008 Annual Report on Form 10-K and "- Known Trends and Uncertainties - Prices of Raw Milk and Other Inputs" below for a more complete description of raw milk pricing.

(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.

Throughout 2009, we have experienced a highly competitive environment with higher pricing sensitivity by our customers, as well as continued consolidation in the retail grocery industry, resulting in increased competition for a smaller customer base. Also, we have faced a continued consumer shift from branded to private label products. Despite these challenges, we continue to focus on cost control and supply chain efficiency through initiatives, improved effectiveness in the pass through of costs to our customers, and our continued focus to drive productivity and efficiency within our operations.

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, including costs to operate and maintain our coolers and freezers. Fresh Dairy Direct's cost of sales decreased $464.1 million, or 24%, in the third quarter of 2009 from the third quarter of 2008, primarily due to continued favorable commodity trends, particularly raw milk costs.

Operating Costs and Expenses - Fresh Dairy Direct's operating costs and expenses decreased by $2.8 million, or 1%, during the third quarter of 2009 from the third quarter of 2008. The decrease was primarily due to lower fuel costs and benefits from our strategic initiatives across our distribution network, largely offset by increased selling and marketing expenses in the quarter related to product line introductions, as well as higher personnel-related costs, including incentive-based compensation and additional headcount.

WhiteWave-Morningstar

The key performance indicators of our WhiteWave-Morningstar segment are sales
volumes, net sales dollars, gross profit and operating income.



                                                Quarter Ended September 30
                                               2009                    2008
                                        Dollars    Percent      Dollars    Percent
                                                  (Dollars in millions)
       Net sales                        $  709.7     100.0 %    $  671.3     100.0 %
       Cost of sales                       492.1      69.3         504.2      75.1

       Gross profit                        217.6      30.7         167.1      24.9
       Operating costs and expenses        149.0      21.0         125.8      18.7

       Total segment operating income   $   68.6       9.7 %    $   41.3       6.2 %

Net Sales - Net sales of the WhiteWave-Morningstar segment increased $38.4 million to $709.7 million in the third quarter of 2009, primarily driven by the acquisition of Alpro, largely offset by lower net sales at Morningstar due to the pass through of lower commodity costs to customers and slightly lower sales volumes impacted by weakness in the retail and foodservice channels, primarily sour cream and yogurt. Net sales at WhiteWave declined slightly driven by the exit of certain foodservice and lactose-free business relationships, as well as our private label milk business in the UK, partially offset by volume increases in our Silk, International Delight, and LAND O LAKES products.

During 2009, we continued to experience a slowing of growth in the organic milk category from 2008. We believe milk consumers have become more price sensitive to organic milk due to the current decline in the economic environment coupled with lower conventional milk prices. Despite these continued challenges, during

the third quarter of 2009, Horizon Organic outperformed the overall category with an increase in market share. 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-Morningstar's cost of sales decreased $12.1 million, or 2%, in the third quarter of 2009 from the third quarter of 2008. This decrease was primarily driven by lower sales volumes, continued trends of lower commodity costs, as well as productivity initiatives partly offset by the impact of our Alpro acquisition.

Operating Costs and Expenses - WhiteWave-Morningstar's operating costs and expenses increased $23.2 million, or 18%, during the third quarter of 2009 from the third quarter of 2008 primarily due to the impact of our acquisition of Alpro, offset by relatively flat operating costs in the WhiteWave and Morningstar operations which was driven by lower fuel costs, productivity and distribution initiatives, as well as tight overall expense control.

Nine Months Ended September 30, 2009 Compared to Nine Months Ended September 30, 2008 - Consolidated Results

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

                                          Nine Months Ended September 30
                                                       $ Increase/       % Increase/
                                2009        2008       (Decrease)        (Decrease)
                                              (Dollars in millions)
. . .