Friday, 2 March 2007

Dean Foods Announces Plan to Return Approximately $2.0 Billion to Shareholders Through Special Cash Dividend of $15.00 Per Share

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Friday, 2 March 2007

Reflects Strong Confidence in Business and Future Cash Flows; Commitment to Enhancing Shareholder Value Financed By $4.8 Billion Senior Secured Credit FacilityDALLAS, March 2, 2007 /PRNewswire-FirstCall via COMTEX News Network/ — Dean Foods Company (NYSE: DF)
today announced plans to return $15.00 per share to shareholders through a
one-time special cash dividend totaling approximately $2 billion. The special
dividend will be financed by a recapitalization of the Company’s balance sheet
through $4.8 billion in new senior secured credit facilities.

“Dean Foods is an organization with strong momentum as reflected in our
2006 results and positive outlook for 2007,” said Gregg Engles, Chairman and
Chief Executive Officer. “Over the past several years we’ve consolidated the
industry and developed a leading market position through significant strategic
acquisitions and investments in building out our branded portfolio. With this
platform in place, we are now entering the next phase of our evolution. Over
the next few years, we will be focused primarily on leveraging our scale to
drive internal growth through maximizing productivity and efficiencies across
our business.”

Engles continued, “Given our internal focus, our strong cash flows, and
the incredible liquidity and flexibility of today’s debt capital markets, the
appropriate finance decision for Dean Foods today is to increase our exposure
to the debt markets and return equity capital to shareholders, while enabling
them to continue to participate in the Company’s future performance and
growth.”

The special dividend declared by Dean Foods’ Board of Directors is payable
on April 2, 2007, to shareholders of record as of March 27, 2007. The dividend
is subject to the completion of the Company’s new senior secured credit
facilities. Dean Foods common stock will start trading on an ex-dividend basis
beginning on April 3, 2007, the day after the payment date, in accordance with
NYSE rules. Shareholders who sell their shares prior to or on the payment date
of April 2, 2007 will also be selling their right to receive the special cash
dividend. Shareholders are advised to contact their financial advisor before
selling their shares.

The total aggregate size of the dividend will depend upon the number of
shares outstanding on the March 27, 2007 record date. The Company will
distribute $15.00 per share to shareholders as of the record date. As of
February 23, 2007, Dean Foods had 128.95 million shares outstanding, which
would result in a total dividend of $1.93 billion.

“Given our financial and business characteristics, Dean Foods is ideally
positioned to take advantage of current attractive credit market conditions to
recapitalize our balance sheet and lower our total cost of capital,” said Jack
Callahan, Executive Vice President and Chief Financial Officer. “After a
thorough analysis, we have targeted an initial leverage level that we believe
is a prudent and efficient use of our balance sheet while preserving
flexibility to meet our capital needs and growth objectives, including
pursuing highly compelling tuck-in acquisitions.”

For U.S. federal income tax purposes, shareholders will receive a Form
1099-DIV in early 2008 to notify them of the division between the dividend and
non-dividend portions of the special dividend. The process of determining
these amounts, which entails a comprehensive review and analysis of the
Company’s history, is well underway. Shareholders are encouraged to consult
with their own tax and financial advisors regarding the implications of this
special distribution.

The $4.8 billion fully underwritten financing package is being arranged by
JPMorgan Securities, Bank of America Securities LLC, and Wachovia Capital
Markets. Completion of the facility, which will replace the Company’s current
facility, is subject to customary closing conditions. The new facility is
currently planned to consist of a 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. The Company
will also be replacing its existing receivables facility with a new secured
$500 million facility. The Company’s publicly traded notes will remain
outstanding without modification.

As previously announced, on November 29, 2006, the Company’s Board of
Directors authorized an increase in the share repurchase program of up to $300
million, of which approximately $220 million remains. As a result of the
recapitalization and one-time cash dividend distribution, the Company does not
anticipate making additional stock repurchases in the near term.

Banc of America Securities LLC is acting as financial advisor to Dean
Foods in this transaction.

Forward Outlook

“For the first quarter, which will conclude before the recapitalization
becomes effective, we continue to expect adjusted earnings per share of
between $0.44 and $0.46,” said Callahan. “For the full year 2007, we continue
to expect operating profit growth of around 7%, consistent with our previous
guidance. However, with the increase in interest expense we are taking on for
the remainder of the year, we now expect full year adjusted earnings of
between $1.72 and $1.78 per share for 2007, depending, in part, on the
finalization of the new capital structure.” The adjustments to the earnings
per share calculation exclude the net impact of facility closing costs,
reorganizations, non-recurring charges and discontinued operations.

Conference Call & Webcast

The Company will be conducting a conference call today at 9.00 a.m. ET to
discuss the details of the special cash dividend and recapitalization. To
access the call, please dial (800) 289-0569 (toll free) or (913) 981-5542
(international). You may access the live webcast by visiting the “Webcasts”
section of the Company site at https://www.deanfoods.com .

About Dean Foods

Dean Foods Company is one of the leading food and beverage companies in
the United States. Its Dairy Group division 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. The Company’s WhiteWave Foods subsidiary markets and sells a
variety of well-known dairy and dairy-related products, such as Silk(R)
soymilk, Horizon Organic(R) milk and other dairy products and International
Delight(R) coffee creamers. WhiteWave Foods’ Rachel’s Organic(R) brand is the
largest organic milk brand and third largest organic yogurt brand in the
United Kingdom.

Forward-Looking Statements

Some of the statements in this press release are “forward-looking” and are
made pursuant to the safe harbor provision of the Securities Litigation Reform
Act of 1995. These “forward-looking” statements include statements relating
to, among other things, (1) projected sales, operating income, net income and
earnings per share, (2) our plans to pay the special dividend, (3) the
estimated amount of the total size of the special dividend, and (4) our plans
to complete and the final terms of, the new credit facility. These statements
involve risks and uncertainties that may cause results to differ materially
from the statements set forth in this press release. The Company’s ability to
meet targeted financial and operating results, including targeted sales,
operating income, net income and earnings per share depends on a variety of
economic, competitive and governmental factors, including raw material costs,
many of which are beyond the Company’s control and which are described in the
Company’s filings with the Securities and Exchange Commission. The Company’s
ability to profit from its branding initiatives depends on a number of factors
including consumer acceptance of the Company’s products. Our ability to pay
the special dividend will depend upon our successful completion of the new
credit facility, and the total amount of the dividend will depend upon the
actual number of shares outstanding on the record date. The forward-looking
statements in this press release speak only as of the date of this release.
The Company expressly disclaims any obligation or undertaking to release
publicly any updates or revisions to such statements to reflect any change in
its expectations with regard thereto or any changes in the events, conditions
or circumstances on which any such statement is based.

Investor Contact: Barry Sievert
Senior Director, Investor Relations
(214) 303-3437

Media Contact: Marguerite Copel
Vice President, Corporate Communications
(214) 721-1273

SOURCE Dean Foods Company

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