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 for any reason. 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 this Form 10-Q, "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. Our WhiteWave-Morningstar segment ("WhiteWave-Morningstar") markets and sells a variety of nationally branded dairy and dairy-related products, such as Silk® soymilk and cultured soy products, Horizon Organic® milk and other dairy products, The Organic Cow® dairy products, International Delight® coffee creamers, LAND O'LAKES® creamers and fluid dairy products and Rachel's Organic ® dairy products. Additionally, our WhiteWave-Morningstar segment markets and sells private label cultured and extended shelf life dairy products.

Fresh Dairy Direct - Fresh Dairy Direct is our largest segment, with approximately 77% of our consolidated net sales in the three and six months ended June 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 - Our WhiteWave-Morningstar's net sales were approximately 23% of our consolidated net sales in the three and six months ended June 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 addition of Morningstar, WhiteWave-Morningstar now includes private label cultured and extended shelf life dairy products

such as 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 its internal sales force and through independent brokers.

Recent Developments

Developments Since January 1, 2009

Current Dairy Environment - Throughout most of 2008, we experienced historically high conventional raw milk prices. Contributors to the high prices included high feed and energy costs, as well as global demand for dry powdered milk. This was compounded by significant and sustained increases in diesel fuel and resin costs. These historically high prices supported an unprecedented expansion of the domestic dairy herd. Despite the volatility of the average Class I mover throughout 2007 and 2008, the average for the 12 months ended December 31, 2008 approximated that of 2007. Beginning in the fourth quarter of 2008, the industry experienced a sharp decline for export demands and a strengthening of the dollar against other currencies which resulted in declines in conventional raw milk prices. This trend has continued in the first half of 2009, resulting in an oversupply in the dairy industry.

Throughout the first six months of 2009, the Class I mover has declined significantly from the average for the fourth quarter of 2008 and remains significantly below comparable 2008 months. Based on the cyclical nature of the industry and currently challenged dairy economics, we expect formal herd reductions to lead to reduced supply and we anticipate the average Class I mover will increase gradually in the back half of 2009. However, on a full year basis, we believe the Class I mover will be significantly below the peak levels experienced in 2007 and 2008.

Organic Milk Environment - The organic dairy industry continues to experience significant swings in supply and demand. Beginning in the fourth quarter of 2008, we started to experience a slowing of growth in the organic milk category, and this trend has continued during the first six months of 2009. As a result of the continuing economic downturn, we believe milk consumers have become and will continue to be increasingly price sensitive to organic 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.

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.

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 $444.8 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.

Acquisitions - On April 1, 2009, our Fresh Dairy Direct segment completed an acquisition for an aggregate purchase price of $35.0 million subject to final closing adjustments and excluding transaction costs which were expensed as incurred. At the acquisition date, the purchase price was allocated to assets acquired, including

identifiable intangibles and liabilities assumed based on their estimated fair values. The excess of the net purchase price over the fair value of the net assets acquired represented goodwill. The proforma impact of the acquisition on consolidated net earnings would not have materially changed reported net earnings. The acquisition was funded with borrowings under our existing senior secured revolving credit facility.

In April 2009, our Fresh Dairy Direct segment also entered into an asset purchase agreement for another acquisition for an aggregate purchase price of $90.0 million subject to final closing adjustments and excluding transaction costs which were expensed as incurred, subject to certain closing conditions, including regulatory approval, which are still pending.

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. 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. The aggregate purchase price was $455.1 million substantially paid in cash, subject to final closing adjustments and excluding transaction costs which were expensed as incurred. The acquisition was funded with borrowings under our existing senior secured revolving credit facility. Alpro will be reported within our WhiteWave-Morningstar segment.

We recorded approximately $10.2 million and $12.8 million in acquisition-related expenses during the three and six months ended June 30, 2009, respectively, in connection with these acquisitions, as well as other transactional activities. We expect to incur additional costs, particularly in the third quarter, related to the acquisitions discussed above.

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 $12.4 million in related impairment charges and $3.9 million in employee termination costs associated with these closures during the six months ended June 30, 2009. Total facility closing and reorganization costs were $19.7 million during the six months ended June 30, 2009. See Note 11.

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 June 30                         Six Months Ended June 30
                                            2009                     2008                     2009                     2008
                                      Dollars    Percent       Dollars    Percent       Dollars    Percent       Dollars    Percent
                                                                         (Dollars in millions)
Net sales                            $ 2,681.3     100.0 %    $ 3,102.5     100.0 %    $ 5,384.2     100.0 %    $ 6,179.5     100.0 %
Cost of sales                          1,917.0      71.5        2,363.2      76.2        3,861.3      71.7        4,751.6      76.9

Gross profit(1)                          764.3      28.5          739.3      23.8        1,522.9      28.3        1,427.9      23.1
Operating costs and expenses:
Selling and distribution                 440.3      16.4          461.6      14.9          864.4      16.1          899.6      14.6
General and administrative               154.1       5.7          113.6       3.6          285.6       5.3          224.3       3.6
Amortization of intangibles                2.0       0.1            1.7       0.1            3.9       0.1            3.3       0.1
Facility closing, reorganization          11.4       0.4            5.2       0.1           19.7       0.4            7.4       0.1

Total operating costs and expenses       607.8      22.6          582.1      18.7        1,173.6      21.9        1,134.6      18.4

Total operating income               $   156.5       5.9      $   157.2       5.1 %    $   349.3       6.4 %    $   293.3       4.7 %

(1) As disclosed in Note 1 to our 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 June 30, 2009 Compared to Quarter Ended June 30, 2008 -
Consolidated Results

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



                                              Quarter Ended June 30
                                                       $ Increase/       % Increase/
                                2009        2008       (Decrease)        (Decrease)
                                              (Dollars in millions)
     Fresh Dairy Direct       $ 2,057.4   $ 2,450.2   $      (392.8 )          (16.0 )%
     WhiteWave-Morningstar        622.2       652.3           (30.1 )           (4.6 )%
     Corporate and Other(1)         1.7          -              1.7               -

     Total                    $ 2,681.3   $ 3,102.5   $      (421.2 )          (13.6 )%

(1) Includes Hero/WhiteWave joint venture.

The change in net sales was due to the following:

                                            Quarter Ended June 30, 2009
                                           vs Quarter Ended June 30, 2008
                                                          Pricing
                                                        And Product        Total Increase/
                          Acquisitions    Volume        Mix Changes          (Decrease)
                                               (Dollars in millions)
Fresh Dairy Direct       $         60.4   $ (33.5 )    $      (419.7 )    $          (392.8 )
WhiteWave-Morningstar               0.8     (28.4 )             (2.5 )                (30.1 )
Corporate and Other(1)               -        1.7                 -                     1.7

Total                    $         61.2   $ (60.2 )    $      (422.2 )    $          (421.2 )

(1) Includes Hero/WhiteWave joint venture.

Net sales decreased $421 million during the second quarter of 2009 as compared to the second 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%, partly offset by lower sales volumes in other products. Net sales in our White-Wave Morningstar segment declined primarily due to slowing category growth across premium branded categories, as well as 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, including costs to operate and maintain our coolers and freezers. Cost of sales decreased $446 million, or 19%, in the second quarter of 2009 from the second quarter of 2008 primarily due to continued favorable commodity trends, particularly raw milk costs, as well as benefits from our strategic initiatives across our manufacturing network.

Operating Costs and Expenses - Our operating expenses increased $26 million, or 4%, in the second 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 $41 million primarily driven by our decision to accelerate 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 decreased primarily due to lower fuel costs and benefits from our strategic initiatives across our distribution network.

Other (Income) Expense - Interest expense decreased to $60.0 million in the second quarter of 2009 from $76.5 million in the second quarter of 2008, primarily due to lower average debt balances and lower interest rates during the second quarter of 2009 compared to the prior year. Additionally, a $5.1 million gain was recognized in the second quarter of 2009 related to a Euro-based forward contract which is discussed in Note 7 to the Condensed Consolidated Financial Statements.

Income Taxes - Income tax expense was recorded at an effective rate of 38.5% in the second quarter of 2009 compared to 39.3% in the second quarter of 2008. Our effective tax rate varies primarily based on the relative earnings of our business units.

Quarter Ended June 30, 2009 Compared to Quarter Ended June 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 June 30
                                              2009                     2008
                                        Dollars    Percent       Dollars    Percent
                                                  (Dollars in millions)
      Net sales                        $ 2,057.4     100.0 %    $ 2,450.2     100.0 %
      Cost of sales                      1,480.2      71.9        1,884.4      76.9

      Gross profit                         577.2      28.1          565.8      23.1
      Operating costs and expenses         408.6      19.9          411.5      16.8

      Total segment operating income   $   168.6       8.2 %    $   154.3       6.3 %

Net Sales - Fresh Dairy Direct's net sales decreased 16% during the second quarter of 2009 as compared to the second quarter of 2008 primarily due to lower pricing as significantly lower commodity costs were passed through to customers. Recent acquisitions and strong execution drove higher fluid milk sales volumes of 2%, 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 second quarter of 2009 compared to the second quarter of 2008:

                                                   Quarter Ended June 30*
                                                 2009      2008     % Change
         Class I mover(1)                       $ 10.47   $ 17.80      (41.2 )%
         Class I raw skim milk mover(1)(2)         6.49     13.15      (50.6 )
         Class I butterfat mover(2)(3)             1.20      1.46      (17.8 )
         Class II raw skim milk minimum(1)(4)      6.52     10.59      (38.4 )
         Class II butterfat minimum(3)(4)          1.25      1.56      (19.9 )

* 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.

(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, including costs to operate and maintain our coolers and freezers. Fresh Dairy Direct's cost of sales decreased $404 million, or 21%, in the second quarter of 2009 from the second quarter of 2008, primarily due to continued favorable commodity trends, particularly raw milk costs, as well as benefits from our strategic initiatives across our manufacturing network.

Operating Costs and Expenses - Fresh Dairy Direct's operating costs and expenses decreased by $3 million, or 1%, during the second quarter of 2009 from the second quarter of 2008. The decrease was primarily due to lower fuel costs and benefits from our strategic initiatives across our distribution network, partly offset by increased advertising expenses in the quarter related to product line introductions and higher personnel-related costs, including incentive-based compensation and additional headcount.

Fresh Dairy Direct operating income increased 9% above year ago levels to $168.6 million as the increase in gross profit, primarily due to the significant decrease in raw material costs, was coupled with benefits from our strategic initiatives and a modest decrease in operating expenses.

WhiteWave-Morningstar

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



                                                  Quarter Ended June 30
                                               2009                    2008
                                        Dollars    Percent      Dollars    Percent
                                                  (Dollars in millions)
       Net sales                        $  622.2     100.0 %    $  652.3     100.0 %
       Cost of sales                       436.5      70.2         478.4      73.3

       Gross profit                        185.7      29.8         173.9      26.7
       Operating costs and expenses        113.7      18.3         124.6      19.1

       Total segment operating income   $   72.0      11.5 %    $   49.3       7.6 %

Net Sales - Net sales of the WhiteWave-Morningstar segment decreased $30 million to $622.2 million in the second quarter of 2009. Net sales of the WhiteWave platform declined as a result of slowing category growth and our exit of certain foodservice and lactose-free business relationships, as well as, our private label milk business in the UK. The impact of the exited businesses was partially offset by volume increases in our

International Delight and Land O' Lakes products. In addition, net sales of the Morningstar platform declined $21 million 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.

Beginning in the fourth quarter of 2008, we started to experience a slowing of growth in the organic milk category, and this trend has continued during the first half of 2009. As a result of the continuing economic downturn, we believe milk consumers have become and will continue to be increasingly price sensitive to organic 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 banded position as we balance market share considerations against profitability.

Cost of Sales - WhiteWave-Morningstar's cost of sales decreased $42 million, or 9%, in the second quarter of 2009 from the second quarter of 2008. This decrease was primarily driven by lower sales volumes, continued trends of lower commodity costs, as well as productivity initiatives.

Operating Costs and Expenses - WhiteWave-Morningstar's operating costs and expenses decreased by $11 million, or 9%, during the second quarter of 2009 from the second quarter of 2008 primarily due to lower distribution costs driven by lower sales volumes, lower fuel costs, as well as productivity initiatives.

Six Months Ended June 30, 2009 Compared to Six Months Ended June 30, 2008 -
Consolidated Results

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



                                             Six Months Ended June 30
                                                       $ Increase/       % Increase/
                                2009        2008       (Decrease)        (Decrease)
                                              (Dollars in millions)
     Fresh Dairy Direct       $ 4,155.9   $ 4,908.7   $      (752.8 )          (15.3 )%
     WhiteWave-Morningstar      1,226.6     1,270.8           (44.2 )           (3.5 )%
     Corporate and Other(1)         1.7          -              1.7               -
. . .