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CAGNY2014 February 20, 2014

White wave Strategy Presentation

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Page 1: White wave Strategy Presentation

CAGNY2014 February 20, 2014

Page 2: White wave Strategy Presentation

GREGG ENGLES Chairman & Chief Executive Officer

Page 3: White wave Strategy Presentation

CAGNY2014 3

Page 4: White wave Strategy Presentation

Forward-looking statements

This presentation contains “forward-looking statements” that are made in reliance on the safe harbor provision of the Private Securities Litigation Reform Act of 1995, including statements relating to (1) financial forecasts for Q1 and full year 2014, including projected net sales, operating income and earnings per share, and financial information under the heading “2014 outlook considerations,” (2) our branding initiatives and planned brand expansions, (3) our innovation and research and development plans, and (4) our growth plans and anticipated capital expenditures, and other statements that begin with words such as “believe,” “expect” or “anticipate.” These statements involve risks and uncertainties that may cause results to differ materially from those set forth in this presentation. We have a limited history as a stand-alone company, which makes our future financial performance difficult to predict. Financial projections are based on a number of assumptions, and actual results could be materially different than projected if those assumptions are erroneous. Sales, operating income, net income, financial performance and earnings per share can vary based on a variety of economic, governmental and competitive factors, including those more fully described in our 2012 Form 10-K filed with the SEC on February 19, 2013, as updated in our Form 8-K filed with the SEC on June 14, 2013. Our ability to profit from our branding initiatives depends on a number of factors including consumer acceptance of our products. Our growth plans depend, in part, on our ability to innovate successfully and on a cost-effective basis. Our financial outlook for the first quarter and full 2014 may be impacted by our ability to effectively operate and grow our recently acquired Earthbound Farm business, the amount of our future additional investments in our joint venture in China and timeline for the joint venture to commence operations, and out ability to continue to execute our strategic growth plans. All forward-looking statements in this presentation speak only as of the date of this presentation. We expressly disclaim any obligation or undertaking to public update or revise any such statement to reflect any change in our expectations or the events, conditions or circumstances on which any such statement is based.

Certain non-GAAP historical and pro forma financial measures contained in this presentation, including net sales, diluted earnings per share, operating income and net income, are from continuing operations and have been adjusted to eliminate the net expense or net gain related to certain items identified in our press release. A full reconciliation of these measures calculated according to GAAP, on a pro forma basis and on a pro forma adjusted basis is contained in our press release issued today and in a separate reconciliation document posted on our website at www.whitewave.com/investors.

CAGNY2014 4

Page 5: White wave Strategy Presentation

Our mission

CAGNY2014 5

Convenient

Flavorful

Responsibly produced

Nutritious

Innovative

Great tasting

CHANGING THE WAY THE WORLD EATS

FOR THE BETTER

Page 6: White wave Strategy Presentation

Our company

CAGNY2014 6

2013 Total net sales: $2,542MM

North America 2013 Net sales: $2,124MM*

Europe 2013 Net sales: $418MM

Plant-based foods & beverages

Brand position: #1

1. Represents International Delight only *Excludes results of Earthbound Farm acquired on January 2, 2014

Premium dairy

Brand position: #1

Organic greens & produce

Brand position: #1

Coffee creamers & beverages

Brand position: #21

Plant-based foods & beverages

Brand position: #1

Page 7: White wave Strategy Presentation

High-growth food & beverage company

CAGNY2014 7

$2,044

$2,306

$2,542

2011 2012 2013

Net sales* ($MM)

* Net sales is presented on a pro forma adjusted basis for 2011 and 2012 ** Operating income is presented on a pro forma adjusted basis for 2011 and 2012 and on an adjusted basis for 2013 See appendix for reconciliations of non-GAAP financial measures to GAAP financial measures

12% CAGR $142

$173

$209

2011 2012 2013

Operating income** ($MM / % Margin)

22% CAGR

6.9%

7.5%

8.2%

Page 8: White wave Strategy Presentation

Strong track record of growing through innovation & investments

CAGNY2014 8

1997 2013

1997 2004 2008 2009 2012 2013

2002 2007 2009 2010 2011 2013

Page 9: White wave Strategy Presentation

Large & growing categories aligned with consumer trends

CAGNY2014 9

$32BN US organic food &

beverage sales

$1.3BN US organic milk 2013

2-yr CAGR: 6%

$1.2BN US organic packaged

salad 2013

2-yr CAGR: 17%

$11BN US coffee &

coffee creamers

$4.2BN US coffee creamers & coffee beverages

2013

2-yr CAGR: 8%

$51BN US dairy &

dairy alternatives

$2.4BN US & EU

plant-based foods & beverages 2013

2-yr US CAGR: 16%

Note: CAGRs from 2011-2013; Category size for US organic is for 2012; category sizes for US dairy & dairy alternatives and US coffee & coffee creamers are for 2013 Source: Category size for US organic from Organic Trade Association, US Coffee & Coffee Creamers from Nielsen xAOC; US Dairy & Dairy Alternatives from xAOC; Narrow category definitions and CAGRs from Nielsen xAOC

2-yr EU CAGR: 7%

Page 10: White wave Strategy Presentation

Significant upside potential in household penetration

CAGNY2014 10

Year-end 2013 US household penetration

US Organic Milk Organic milk Organic packaged salad Plant-based beverages Refrigerated flavored

coffee creamers

13% 22% 26% 36%

Source: Household penetration IRI and Nielsen Panel Data, coffee creamers includes half & half, dairy and non-dairy creamers

Page 11: White wave Strategy Presentation

Attractive growth opportunities for the future

CAGNY2014 11

Household penetration

growth

Broader household

usage

Innovative, new products

Expanded distribution

in core markets

International expansion

Strategic investments

Page 12: White wave Strategy Presentation

Recent strategic actions: acquisition of Earthbound Farm

Branded platform in on-trend, high-growth category

Now have two most popular gateways to enter organic category: produce & dairy

Strengthens WhiteWave’s scale and brand presence

Closed on January 2, 2014; ~$0.07 EPS accretion expected in 2014

Pro forma leverage ~3.2x; maintain flexibility for future strategic opportunities

Industry veteran Kevin Yost to lead business

CAGNY2014 12

Page 13: White wave Strategy Presentation

Recent strategic actions: Mengniu joint venture

Joint venture with Mengniu Dairy Company Limited, leading Chinese dairy company

JV intends to manufacture, market and sell range of nutritious products in China

Consistent with strategy to expand into new geographies

Access to world’s largest consumer group, shifting toward high-quality, nutritious diet

Excellent partner – strong sales and distribution expertise

Production facility under construction – expect to manufacture products by end of 2014

CAGNY2014 13

Page 14: White wave Strategy Presentation

BLAINE MCPEAK President, WhiteWave

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Trusted brands driving growth

CAGNY2014 15

Plant-based foods and beverages are better for people and the planet

Helping moms nourish their families

Bringing the benefits of organic food to all

Everyone deserves a great cup of coffee

Page 16: White wave Strategy Presentation

Top 25 food & beverage companies 1-yr Growth Rate 2-yr Growth Rate 4-yr Growth Rate

WhiteWave Foods +7.1% +10.2% +9.7% Danone Group +7.1% +6.0% +5.3%

The Hershey Co. +5.9% +5.2% +5.6%

Tyson Food Inc. +4.9% +2.9% +1.0%

Mondelez Int’l Inc. +4.1% +3.0% +2.0%

Campbell Soup Co. +3.4% +2.5% +1.0%

Grupo Bimbo S.A. de C.V. +1.9% +0.5% +0.9%

CTL BR +1.2% +1.2% +3.3%

Mars Incorporated +0.5% +0.4% +1.1%

Mccormick Company, Inc. +0.4% +1.1% +2.1%

Nestle Holdings Inc. +0.2% +0.6% +0.9%

Hormel Foods Corporation -0.0% +1.2% +1.3%

Pepsico Inc. -0.2% -0.1% +0.0%

Kellogg Company -0.8% +0.1% +0.6%

Kraft Foods, Inc. -0.8% +0.2% +0.8%

General Mills -0.9% -1.3% +0.0%

Coca Cola Company -1.3% -0.3% +0.9%

Pinnacle Foods Group LLC -1.5% -1.7% -1.9%

J.M. Smucker Company -1.8% +1.6% +3.6%

ConAgra Inc. -2.5% -1.7% -0.5%

Dr. Pepper Snapple Group Inc. -2.6% -2.0% +0.0%

HJ Heinz Company -4.0% -3.4% -1.6%

Unilever Group -4.1% -2.8% -1.1%

Dean Foods Inc. -4.3% -2.5% +0.7%

Del Monte Foods Company -4.3% -2.1% -1.0%

One of fastest growing food and beverage companies in America

CAGNY2014 16

#1 growth rate for the last

1 year 2 years 4 years

Source: Nielsen 52wk period ending 12/21/13. Dollar sales for all vendors in Dairy/Deli/Frozen/Dry Grocery.

Page 17: White wave Strategy Presentation

Driving growth

CAGNY2014 17

Driving Growth

Strengthening our brands

Stretching where we compete

Strengthening our retail partnerships

Enabling through supply chain

Page 18: White wave Strategy Presentation

CAGNY2014 18

Delicious plant-based foods and beverages for healthier living

Page 19: White wave Strategy Presentation

Overcoming barriers to drive household penetration

CAGNY2014 19

15 16 18

21 24

26

2008 2009 2010 2011 2012 2013

US HH penetration for total plant-based beverages %

Launch of Silk Almond

Plant-based beverages becoming mainstream

Launch of Silk Coconut

Stepped up marketing investments

Silk is driving the category

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New Silk brand ambassador

CAGNY2014 20

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Silk helps you Bloom

CAGNY2014 21

Page 22: White wave Strategy Presentation

Expanding the Silk brand

CAGNY2014 22

New packaging New products New categories

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Building the category and the Alpro brand

CAGNY2014 24

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Feed your curiosity

CAGNY2014 25

Page 26: White wave Strategy Presentation

Broadening our brand presence

CAGNY2014 26

Expanding beyond soy Expanding geographic scope

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Developing our yogurt portfolio

CAGNY2014 27

New packaging New products New sizes

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CAGNY2014 28

Bringing nutritious solutions to moms, so they can provide a healthy foundation for their families

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The leading share of voice in organic

CAGNY2014 29

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Fat-free, lactose-free milk Single-serve DHA

Expanding our core dairy offering

CAGNY2014 30

Page 31: White wave Strategy Presentation

Expanding the power of the Horizon brand to center of the store

CAGNY2014 31

Kids meals Kids snacks

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CAGNY2014 32

Everyone deserves a great cup of coffee

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Strong coffee consumption trends fueling growth

CAGNY2014 33

-6.0

-5.0

-4.0

-3.0

-2.0

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

2011 2012 2013

Pe

rce

nta

ge p

oin

t ch

ange

Share change of coffee creaming occasions

27%

15%

17%

33%

Note: Chart excludes “All Other” whiteners (~3.5% of total coffee occasions); Whitened coffee accounts for ~48% of all coffee occasions Source: NPD Group / National Eating Trends Survey, 52 weeks ending May 2011-2013

Total share

Page 34: White wave Strategy Presentation

2014 rebranding: “Bringing Delight to Life”

CAGNY2014 34

Page 35: White wave Strategy Presentation

Bringing more delight to consumers

CAGNY2014 35

New products New flavors

Page 36: White wave Strategy Presentation

Expanding portfolio: “America Runs on Dunkin’ SM”

CAGNY2014 36

Over 95% brand awareness

Over 7,000 retail stores

Over 1.5 billion cups of coffee sold annually

Sizeable player in retail bagged coffee

Over $1 billion unflavored creamer category

Strong brand partnership

Page 37: White wave Strategy Presentation

Strong retail partnerships

CAGNY2014 37

Expanding distribution Strong merchandising Compelling

away-from-home solutions

Page 38: White wave Strategy Presentation

Great partnerships bring our brands to life

CAGNY2014 38

Page 39: White wave Strategy Presentation

Supply chain further enables growth

CAGNY2014 39

Expanding lines Expanding warehousing Expanding for the future

Building our capabilities

Page 40: White wave Strategy Presentation

KEVIN YOST President, Earthbound Farm

Page 41: White wave Strategy Presentation

CAGNY2014 41

Bringing the benefits of organic food to as many people as possible

Page 42: White wave Strategy Presentation

Earthbound Farm overview

Founded 1984; pioneer in development of organic produce

Scale business, over $500 million in 2013 net sales

Competitive advantages in procurement, processing and innovation

Highly experienced management team

Industry-leading brand, significant loyalty

On-trend, high-growth categories

CAGNY2014 42

Leading organic produce brand in North America and largest non-dairy organic brand in US

Salad

Fresh vegetables Fresh fruits Frozen & dried

Page 43: White wave Strategy Presentation

Strong share in high-growth, increasingly organic category

CAGNY2014 43

$386 $422

$489

$547

$655

$803

2008 2009 2010 2011 2012 2013

Organic packaged salad retail sales ($MM, grocery)

13% 14%

16% 17%

20%

23%

2008 2009 2010 2011 2012 2013

US organic packaged salad as a percent of total salad category

(%, grocery)

Earthbound holds a 45% share* of the organic category and a 55% share of the branded organic segment

*45% share includes both Earthbound branded products and private label products produced by Earthbound Source: Nielsen US Food – 52 weeks ending early January 2009-2014

16% CAGR

Page 44: White wave Strategy Presentation

Brand strength provides growth opportunities

Significant potential for brand growth

Growth opportunities through category segmentation

Recent launch of frozen line provides additional growth opportunities

Potential for brand extensions

CAGNY2014 44

Page 45: White wave Strategy Presentation

KELLY HAECKER Executive Vice President &

Chief Financial Officer

Page 46: White wave Strategy Presentation

Financial priorities

CAGNY2014 46

Drive continued top- and bottom-line growth

Invest capital to support volume growth and margin expansion

Maintain financial flexibility for strategic initiatives

Drive shareholder value

Page 47: White wave Strategy Presentation

Strong top-line growth continues

Category growth continues behind favorable consumer trends

Strong organic top-line growth – Driven by volume

Double-digit growth in both North America and Europe segments

Growth across all brand platforms

Growth in both retail & away-from-home channels

CAGNY2014 47

$2,306

$2,542

2012 2013

Net sales* ($MM)

10% Growth

* Net sales is presented on a pro forma adjusted basis for 2012 See appendix for reconciliations of non-GAAP financial measures to GAAP financial measures

Page 48: White wave Strategy Presentation

Strong growth in profitability

Strong operating income growth in both North America and Europe

Significant operating cost leverage

+70 basis points of margin expansion

Supporting category-leading marketing investments

CAGNY2014 48

* Operating income is presented on a pro forma adjusted basis for 2012 and on an adjusted basis for 2013 See appendix for reconciliations of non-GAAP financial measures to GAAP financial measures

$173

$209

2012 2013

Operating income* ($MM/%Margin)

7.5%

21% Growth

8.2%

Page 49: White wave Strategy Presentation

Delivering strong earnings growth

Strong earnings growth in 2013

EPS growth rate over 2x topline growth rate

Creating value for shareholders

CAGNY2014 49

* Diluted earnings per share is presented on a pro forma adjusted basis for 2012 and on an adjusted basis for 2013 See appendix for reconciliations of non-GAAP financial measures to GAAP financial measures

$0.60

$0.74

2012 2013

Diluted earnings per share*

23% Growth

Page 50: White wave Strategy Presentation

Investing for growth

CAGNY2014 50

2013 3 South central filling lines 2 East coast filling lines 1 West coast filling line

2014

Europe filling line East coast filling line East coast warehouse expansion South central warehouse expansion

New North America manufacturing facility Europe plant expansion West coast warehouse consolidation 2 South central filling lines

6 filling lines ≈1 plant

7 filling lines under development

2015

Page 51: White wave Strategy Presentation

Strong balance sheet to support future growth

CAGNY2014 51

1 Pro forma for additional indebtedness incurred in conjunction with the acquisition of Earthbound Farm on January 2, 2014 2 As defined by credit agreement

Actual Pro forma1

Cash $101 $101

$850MM revolving credit facility 178 293

Term loans 485 985

Total net debt $562 $1,177

Leverage ratio2 <2.0x ~3.2x

Capital structure as of 12/31/2013 ($MM)

Page 52: White wave Strategy Presentation

2014 outlook considerations

CAGNY2014 52

Top line Volume growth main driver across platforms Modest pricing benefit due to actions taken to offset inflation

Operating items Continue marketing investments behind product launches and brand building Remain focused on improving supply chain costs & operating margin expansion

Corporate items Corporate costs estimated to be around $65 million

– Annualized standalone functions / Earthbound corporate cost shifts / China JV support – Q1 highest quarter with remaining quarters relatively balanced

Capital investments Capital expenditures estimated to be $230 to $260 million – N. America manufacturing facility / Europe capacity expansion / Earthbound requirements

Other items Interest expense forecasted to be $33 to $37 million Tax rate expected to be around 35% with potential quarterly variability Operating investments in China joint venture

Page 53: White wave Strategy Presentation

Continued growth in 2014

CAGNY2014 53

* As compared to 2013 on an adjusted basis See appendix for reconciliations of non-GAAP financial measures to GAAP financial measures

7% - 8% organic top-line growth forecasted Expect continued strong earnings growth in 2014

2014 Forecast*

Q1 Full Year

Net sales growth + High twenties % + High twenties %

Adjusted operating income growth + High teens to low twenties %

+ Mid thirties %

Adjusted diluted EPS $0.17 - $0.19 $0.85 - $0.89

Adjusted diluted EPS – excluding JV $0.18 - $0.20 $0.90 - $0.94

Diluted shares outstanding ~177MM ~178MM

Page 54: White wave Strategy Presentation

GREGG ENGLES Chairman & Chief Executive Officer

Page 55: White wave Strategy Presentation

A compelling opportunity

Leading portfolio of large scale brands

Highly attractive, fast-growing categories aligned with consumer trends

Leading innovator and pioneer

Significant growth opportunities for the future

Experienced management

CAGNY2014 55

CHANGING THE WAY THE WORLD EATS

FOR THE BETTER

Page 56: White wave Strategy Presentation

CAGNY2014 February 20, 2014

Page 57: White wave Strategy Presentation

APPENDIX

Page 58: White wave Strategy Presentation

Reconciliation of GAAP to non-GAAP information

CAGNY2014 58

GAAP

FY 2011

Pro forma

adjustments Pro forma

Additional

adjustments

Pro Forma

Adjusted

FY 2011

GAAP

FY 2012

Pro forma

adjustments Pro forma

Additional

adjustments

Pro Forma

Adjusted

FY 2012

GAAP

FY 2013 Adjustments

Adjusted

FY 2013

Total net sales 2,025,751$ 26,837$ (a) 2,052,588$ (8,781)$ (f) 2,043,807$ 2,289,438$ 19,738$ (a) 2,309,176$ (3,643)$ (f) 2,305,533$ 2,542,063$ -$ 2,542,063$

Cost of sales 1,341,310 9,898 (a) 1,351,208 (21,778) (f) 1,329,430 1,485,494 8,917 (a) 1,494,411 (16,545) (f) 1,477,866 1,634,646 - 1,634,646

Gross profit 684,441 16,939 701,380 12,997 714,377 803,944 10,821 814,765 12,902 827,667 907,417 - 907,417

Related party license income 42,680 (42,680) (b) - - - 36,034 (36,034) (b) - - - - - -

Operating expenses:

Selling and distribution 414,724 - 414,724 (1,946) (f) 412,778 492,130 - 492,130 (1,646) (f) 490,484 528,233 - 528,233

General and administrative 136,703 9,825 (c) 146,528 13,462 (g) 159,990 167,595 (9,313) (c) 158,282 5,837 (g) 164,119 197,526 (27,402) (g) 170,124

Asset disposal and exit costs - - - - - - - - - - 26,226 (26,226) (j) -

Total operating expenses 551,427 9,825 561,252 11,516 572,768 659,725 (9,313) 650,412 4,191 654,603 751,985 (53,628) 698,357

Operating income 175,694 (35,566) 140,128 1,481 141,609 180,253 (15,900) 164,353 8,711 173,064 155,432 53,628 209,060

Other expense (income):

Interest expense 9,149 13,904 (d) 23,053 534 (h) 23,587 9,924 13,663 (d) 23,587 - 23,587 18,027 - 18,027

Other expense (income), net 122 - 122 - 122 957 - 957 (1,151) (i) (194) (3,829) 3,410 (i) (419)

Total other expense (income) 9,271 13,904 23,175 534 23,709 10,881 13,663 24,544 (1,151) 23,393 14,198 3,410 17,608

Income from continuing operations before

income taxes 166,423 (49,470) 116,953 947 117,900 169,372 (29,563) 139,809 9,862 149,671 141,234 50,218 191,452

Income tax expense 52,089 (17,315) (e) 34,774 3,543 (e) 38,317 56,858 (10,347) (e) 46,511 (718) (e) 45,793 44,193 18,693 (e) 62,886

Income from continuing operations 114,334$ (32,155)$ 82,179$ (2,596)$ 79,583$ 112,514$ (19,216)$ 93,298$ 10,580$ 103,878$ 97,041$ 31,525$ 128,566$

Earnings per Share, Basic and Diluted:

Basic 0.76$ 0.46$ (k) 0.73$ 0.60$ (k) 0.56$ 0.74$ (k)

Diluted 0.76$ 0.46$ (k) 0.73$ 0.60$ (k) 0.56$ 0.74$ (k)

Weighted Average Shares Outstanding, Basic and Diluted:

Basic 150,000,000 173,000,000 153,770,492 173,000,000 173,120,689 173,120,689

Diluted 150,000,000 173,000,109 153,770,497 173,000,109 174,581,468 174,581,468

Income statement amounts by segment:

Total net sales

North America 1,657,192$ 26,837$ (a) 1,684,029$ (8,781)$ (f) 1,675,248$ 1,921,444$ 19,738$ (a) 1,941,182$ (3,643)$ (f) 1,937,539$ 2,123,997$ -$ 2,123,997$

Europe 368,559 - 368,559 - 368,559 367,994 - 367,994 - 367,994 418,066 - 418,066

Total 2,025,751$ 26,837$ 2,052,588$ (8,781)$ 2,043,807$ 2,289,438$ 19,738$ 2,309,176$ (3,643)$ 2,305,533$ 2,542,063$ -$ 2,542,063$

Operating income

North America 137,807$ 16,939$ (a) 154,746$ 14,943$ (f) 169,689$ 178,960$ 10,821$ (a) 189,781$ 14,548$ (f) 204,329$ 215,155$ 14,426$ (j) 229,581$

Europe 27,873 - 27,873 (953) (g) 26,920 23,735 - 23,735 - 23,735 18,879 11,800 (j) 30,679

Total consolidated segment operating income 165,680 16,939 182,619 13,990 196,609 202,695 10,821 213,516 14,548 228,064 234,034 26,226 260,260

Related party license income 42,680 (42,680) (b) - - - 36,034 (36,034) (b) - - - - - -

Corporate and other (32,666) (9,825) (c) (42,491) (12,509) (g) (55,000) (58,476) 9,313 (c) (49,163) (5,837) (g) (55,000) (78,602) 27,402 (g) (51,200)

Total operating income 175,694$ (35,566)$ 140,128$ 1,481$ 141,609$ 180,253$ (15,900)$ 164,353$ 8,711$ 173,064$ 155,432$ 53,628$ 209,060$

(In thousands, except share and per share data)(In thousands, except share and per share data) (In thousands, except share and per share data)

Page 59: White wave Strategy Presentation

Reconciliation of GAAP to non-GAAP information

CAGNY2014 59

The adjusted results differ from the Company’s results under GAAP due to the following:

a) The adjustment reflects:

i. An agreement with two wholly-owned Dean Foods subsidiaries, Suiza Dairy Group, LLC ("Suiza Dairy") and Dean Dairy Holdings, LLC ("Dean Dairy"), pursuant to which those subsidiaries continue to sell and distribute certain WhiteWave products. This agreement modifies our historical intercompany arrangements and reflects new pricing. The net effect of the agreement is an estimated increase in total net sales and an estimated increase in cost of sales for the following periods:

$26.8 million and $8.8 million for the year ended December 31, 2011.

$19.7 million and $7.0 million for the year ended December 31, 2012.

$nil million and $nil million for the year ended December 31, 2013.

ii. Manufacturing agreements with (1) Morningstar pursuant to which Morningstar continues manufacturing various WhiteWave products on our behalf and (2) Suiza Dairy and Dean Dairy pursuant to which they continue manufacturing WhiteWave fresh organic milk products on our behalf. The agreements modify our historical intercompany arrangements and reflect new pricing. The net effect of the agreements is an estimated increase in cost of sales for the following periods:

$1.1 million for the year ended December 31, 2011.

$1.9 million for the year ended December 31, 2012.

$nil million for the year ended December 31, 2013.

b) The adjustment reflects the elimination of license income associated with our intellectual property license agreement with Morningstar. In connection with our initial public offering, this agreement was terminated and we transferred the intellectual property subject to this license agreement to Morningstar. The effect of this agreement is to eliminate the related party license income for all periods presented.

c) The adjustment reflects:

i. The recurring impact on stock compensation expense for grants to the Company’s Named Executive Officers and other executives made in connection with our initial public offering (the "IPO grants").

$9.8 million for the year ended December 31, 2011.

$8.2 million for the year ended December 31, 2012.

$nil million for the year ended December 31, 2013.

ii. Elimination of non-recurring transaction costs we incurred in connection with our initial public offering of $17.5 million for the year ended December 31, 2012.

d) The adjustment reflects:

i. Elimination of the interest expense related to our historical indebtedness.

$15.7 million for the year ended December 31, 2011.

$10.5 million for the year ended December 31, 2012.

$nil million for the year ended December 31, 2013.

ii. Expected interest expense and the amortization of deferred financing costs on our new borrowings under the revolving credit facility and term loan facilities.

$23.5 million for the year ended December 31, 2011.

$17.8 million for the year ended December 31, 2012.

$nil million for the year ended December 31, 2013.

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Reconciliation of GAAP to non-GAAP information

CAGNY2014 60

iii. Elimination of interest income associated with our loan agreement with Morningstar related to the license income under the intellectual property license agreement.

$6.1 million for the year ended December 31, 2011.

$6.4 million for the year ended December 31, 2012.

$nil million for the year ended December 31, 2013.

e) The adjustment reflects:

i. Applying the 35% U.S. federal statutory rate to the pro forma adjustments in the 2012 periods.

ii. The elimination of the tax effect of uncertain tax positions related to non-recurring transaction costs and assets held for sale.

iii. The income tax expense required to adjust the U.S. GAAP effective rate to the estimated effective rate on all adjustments in the pro forma adjustments, the additional adjustments, and the adjustments columns for all periods.

f) The adjustment reflects:

i. A transitional sales agreement with Morningstar pursuant to which Morningstar will transfer back to us responsibility for sales and associated costs of certain WhiteWave products. The net effect of the agreement is an estimated increase in total net sales for the following periods:

$22.3 million for the year ended December 31, 2011.

$21.6 million for the year ended December 31, 2012.

$nil million for the year ended December 31, 2013.

ii. A transitional sales agreement with Morningstar pursuant to which we will transfer to Morningstar responsibility for the sales and associated costs of our aerosol whipped topping and other non-core products. The net effect of the agreement is a decrease in total net sales, a decrease in cost of sales, and a decrease in selling and distribution expense for the following periods:

$31.1 million, $21.8 million, and $1.9 million for the year ended December 31, 2011.

$25.2 million, $16.5 million, and $1.6 million for the year ended December 31, 2012.

$nil million, $nil million, and $nil million for the year ended December 31, 2013.

g) The adjustment reflects:

i. Elimination of the historical corporate costs allocated to us by Dean Foods.

$32.7 million for the year ended December 31, 2011.

$33.7 million for the year ended December 31, 2012.

$nil million for the year ended December 31, 2013.

ii. Elimination of the non-cash impact on stock compensation expense for the IPO grants.

$9.8 million for the year ended December 31, 2011.

$9.7 million for the year ended December 31, 2012.

$10.9 million for the year ended December 31, 2013.

iii. The inclusion of estimated stand-alone public company costs, including the costs of corporate services currently provided by Dean Foods.

$55.1 million for the year ended December 31, 2011.

$50.4 million for the year ended December 31, 2012.

$nil million for the year ended December 31, 2013.

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Reconciliation of GAAP to non-GAAP information

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iv. Elimination of other non-recurring transition costs.

$nil million for the year ended December 31, 2011.

$1.2 million for the year ended December 31, 2012.

$6.8 million for the year ended December 31, 2013.

v. Elimination of non-recurring transaction costs related to the Dean Foods offering of our shares of $1.4 million for the year ended December 31, 2013.

vi. Elimination of non-recurring transaction costs related to acquisitions and other investments of $8.3 million for the year ended December 31, 2013.

vii. Impact of excluding the $0.9 million benefit recorded for the favorable settlement of taxing authority examinations for the year ended December 31, 2011.

h) The adjustment reflects incremental expected interest expense on our new borrowings under our senior secured credit facilities of $0.5 million for the year ended December 31, 2011.

i) The adjustment reflects elimination of the (income) expense related to the mark-to-market adjustment on our interest rate swaps.

$nil million for the year ended December 31, 2011.

$1.2 million for the year ended December 31, 2012.

$(3.4) million for the year ended December 31, 2013.

j) The adjustment reflects elimination of asset disposal and exit costs.

i. Elimination of the loss on assets held for sale related to the Company’s intention to sell the operations of its soy-based meat alternative business located in the Netherlands of $11.8 million for the year ended December 31, 2013.

ii. Elimination of the non-cash write-down of the assets of the dairy farm located in Idaho of $11.1 million for the year ended December 31, 2013.

iii. Elimination of restructuring costs in connection with the sale of the dairy farm located in Idaho of $3.3 million for the year ended December 31. 2013.

k) For 2011 and 2012, the number of shares used to compute basic earnings per share is 173,000,000, which is comprised of 23,000,000 shares of Class A common stock (the number of shares outstanding upon completion of our initial public offering) and 150,000,000 shares of Class B common stock. The number of shares used to compute diluted earnings per share includes the dilutive impact of stock options and RSUs.

On May 23, 2013, Dean Foods distributed to its stockholders an aggregate of 47,686,000 shares of our Class A common stock and 67,914,000 shares of our Class B common stock as a pro rata dividend on shares of Dean Foods common stock outstanding. For the year ended December 31, 2013, the number of shares used to compute basic earnings per share is 173,120,689, which is comprised of 91,506,411 shares of Class A common stock and 81,614,278 shares of Class B common stock on a weighted average basis. The number of shares used to compute diluted earnings per share includes the dilutive impact of stock options and RSUs.