2. Forward Looking Statements
The following statements made in this presentation are “forward looking” and are made
pursuant to the safe harbor provision of the Securities Litigation Reform Act of 1995:
statements relating to (1) the proposed special dividend transaction, (2) the estimated total
amount of the special dividend, (3) our plans to complete and the final terms of, the new
credit facility, (4) projected sales (including for individual segments, for specific product
lines and for the company as a whole), profit margins, net income and earnings per share,
(5) our growth strategy, (6) our branding initiatives (7) our integration plans, and (8) our
cost-savings initiatives. These statements involve risks and uncertainties that may cause
results to differ materially from those set forth in this presentation. The proposed special
dividend transaction remains subject to successfully completing a syndicated credit facility
transaction. Financial projections are based on a number of assumptions. Actual results
could be materially different than projected if those assumptions are erroneous. Sales,
profit margins, net income and earnings per share can vary based on a variety of
economic, governmental and competitive factors, which are identified in our filings with the
Securities and Exchange Commission, including our most recent Annual Report on Form
10K and Quarterly Reports on Form 10Q (which can be accessed on our website at
www.deanfoods.com or the website of the Securities and Exchange Commission at
www.sec.gov). The success of our branding initiatives will depend on a number of factors,
including customer and consumer acceptance of both the products themselves and the
prices that we intend to charge for those products. We have many competitors with
greater resources than ours, and significant additional spending or innovations by our
competitors could render our products less successful than we currently expect. All forward
looking statements in this presentation speak only as of the date of this presentation. We
expressly disclaim any obligation or undertaking to release publicly any updates or
revisions to any such statements to reflect any change in our expectations with regard
thereto or any changes in the events, conditions or circumstances on which any such
statement is based.
2
3. Returning Significant Capital to
Shareholders Through A Special Dividend
Returning $15.00 per share in cash to shareholders
through a special dividend
Equates to approximately $2 billion, final amount
dependent on actual number of outstanding shares
Payable on April 2, 2007 to shareholders of record
as of March 27, 2007
Conditioned on completion of new $4.8 billion senior
secured credit facility
3
4. Convergence of Factors
Strong, Stable
Shifting Focus to
Business &
Internal Growth &
Cash Flow
Capabilities
4
• Stable business
• Significant organic
Focused on model in a clear
growth opportunity,
Strong,
leadership position
in line with
$15.00 Per Share
Internal
consumer trends
Stable
• Consistent record
2
1 Special
Growth of performance
• Multi-year capability
Business
building and Dividend
Opportunities • Increasingly
productivity program &
challenged to
in place effectively return
Cash Flow
capital via share
• Limited acquisition
repurchases
opportunities, both
due to number and
valuation 3
Attractive Environment for Recapitalization
• Robust capital market conditions
Attractive Environment for
• Historically low interest rate environment; corporate spreads at
record lows
Recapitalization
4
5. Dean’s Strategy Has Achieved
Great Success
Dean is the #1 dairy and #3 non-alcoholic beverage
company in North America
40+ acquisitions since 1993 have created industry
leader with leading national and regional brands
Built the industry’s only nationwide manufacturing and
distribution footprint
Demonstrated ability to drive market share growth
Portfolio rationalization to focus on largest opportunities
Increased profits through cost reduction & improved
efficiency 5
6. Historical EPS Growth
$2.12
2002 - 2006
$1.83
Adjusted EPS*
CAGR = 17%
$1.48
$1.31
$1.15
2002 2003 2004 2005 2006
GAAP EPS
$1.28 $1.67 $2.01
$1.08 $1.53
from continuing
operations
See reconciliation of these at www.deanfoods.com and in Appendix A of this presentation
6
*Adjusted to omit the net impact of facility closing costs, reorganizations, non-recurring charges and discontinued operations
7. Strong Operating Income Growth
Operating Income from
Continuing Operations*
($ millions)
9.2%
7.2% 11.7%
Growth
Growth Growth
$651
$580
$536
GAAP $574
Op Inc
* Excludes facility closings, reorganizations, divestitures and non-recurring items. See Appendix A for reconciliation 7
8. Strong Cash Flow Generation
Cash Flow from
Continuing Operations*
($ millions)
Cash Flow
From
Operations
Free Cash
Flow*
Capital
$301 $287 $237
$260
Expenditures:
* Excludes facility closings, reorganizations, divestures and non-recurring items, See Appendix A for reconciliation Note:
8
Free Cash flow is defined as Cash flow from continuing operations minus capital expenditures as reflected in our public filings
9. Focus on Shareholder Value
Special Dividend
Announced
$45
TreeHouse
CAGR = 26% Spin-off
$40
Acquired 100% of
$35 Horizon Organic
Announced sale of
$30 Iberian operations
Acquired
Acquired minority
Added to
Dean Foods
interest in
$25 S&P 500 Index
Horizon Organic
Began WhiteWave
$20 Acquired consolidation
Southern Foods
$15
IPO Acquired
$10
White Wave
Acquired
$5 Morningstar
$0
2006 2007
1996 1997 1998 1999 2000 2003
2002 2005
2001 2004
YTD
9
Source: Bloomberg as of 2/16/2007 Note: Share price appreciation reflects stock-split adjusted price
10. The Next Phase in Dean Foods’ Evolution
Consolidation
Consolidation
1994 -- 2001
1994 2001
Transition
Transition
2002 -- 2006
2002 2006
The New Dean
The New Dean
2007 - 2010
2007 - 2010
Evolve the operating model to maximize the benefits of scale
advantage
Strengthen functional expertise to sustain year-on-year productivity
Enhance selling capability, brand building and innovation
Ensure pace of change does not inhibit business performance
Opportunity to sustain strong operating profit growth
Focus on internal growth opportunities, margin enhancement &
cash flow generation 10
11. Convergence of Factors: Internal Focus
Strong, Stable
Shifting Focus to
Focused on
Business &
Internal Growth &
Internal Growth Cash Flow
Capabilities
Opportunities
4
• Significant growth Strong,
• Stable business
• Significant organic
model in a clear
opportunity in
growth opportunity,
Stable
leadership position
current businesses,
in line with $15.00 Per Share
in line with trends
consumer • Business
Consistent record
2
1 Special
consumer trends
of performance
• Multi-year capability
&
• Multi-yearand Dividend
building capability • Increasingly
building and program
productivity Cash Flow
challenged to
in place
productivity program effectively return
in place acquisition capital via share
• Limited
repurchases
• Limited large both
opportunities,
due to number and
acquisition
valuation 3
opportunities
Attractive Environment for Recapitalization
• Robust capital market conditions
Attractive Environment for
• Historically low interest rate environment; corporate spreads at
record lows
Recapitalization
11
12. Convergence of Factors: Cash Flow
Strong, Stable
Strong, Stable
Shifting Focus to
Business&
Business &
Internal Growth &
Cash Flow
Cash Flow
Capabilities
4
• Stable and growing
• Stable business
Focused on
• Significant organic
business in clear
a
model in a
growth opportunity,
Internal leadership position
leadership position
in line with $15.00 Per Share
consumer trends • Consistent recordof
Growth • Consistent record of
2
1 Special strong financial
performance
• Multi-year capability
Opportunities Dividend performance
building and • Increasingly
productivity program
• Increasingly to
challenged difficult
in place
to effectively return
effectively return
capital via share
capital viashare
• Limited acquisition
repurchases
opportunities, both repurchases due to
due to number and decreased float,
valuation 3 increasing free cash
flow
Attractive Environment for Recapitalization
• Robust capital market conditions
Attractive Environment for
• Historically low interest rate environment; corporate spreads at
record lows
Recapitalization
12
13. Convergence of Factors: Attractive Markets
Strong, Stable
Shifting Focus to
Business &
Internal Growth &
Cash Flow
Capabilities
4
Focused on Strong,
• Stable business
• Significant organic
model in a clear
growth opportunity,
Internal Stable
leadership position
in line with $15.00 Per Share
Growth
consumer trends
Business
• Consistent record
2
1 Special of performance
Opportunities
• Multi-year capability
&
Dividend
building and • Increasingly
productivity program Cash Flow
challenged to
in place effectively return
capital via share
• Limited acquisition
repurchases
opportunities, both
due to number and
valuation 3
Attractive Environment for Recapitalization
Attractive Environment for Recapitalization
• Robust capital market conditions
• Robustcapital market conditions
• Historically low interest rate environment; corporate spreads
• Historically low interest rate environment; corporateat
record lows
spreads at record lows
13
14. Convergence of Factors: Summary
Strong, Stable
Strong, Stable
Focused on
Shifting Focus to
Business&
Business &
Internal Growth &
Internal Growth
Cash Flow
Cash Flow
Capabilities
Opportunities 4
•
• Stable and growing
Significant growth
• Stable business
•opportunity in $15.00 Per Share
Significant organic business in a
model in a clear
current opportunity,
growth leadership position
Special Dividend leadership position
in line with
•
businesses, in
•Low execution risk
consumer trends Consistent record of
• Consistent record of
line with 2
1
•Fair and efficient strong financial
performance
•consumer capability
Multi-year trends
performance
•Adequate flexibility
building and • Increasingly
• Multi-year program
•
productivity Increasingly to
challenged difficult
capability building
in place to effectively return
effectively return
and productivity
capital via share
• Limited acquisition capital via share
program in place repurchases
opportunities, both repurchases due to
• Limitednumber and
due to large decreased float,
valuation 3 increasing free cash
acquisition
flow
opportunities
Attractive Environment for Recapitalization
Attractive Environment for Recapitalization
• Robust capital market conditions
• Robustcapital market conditions
• Historically low interest rate environment; corporate spreads
• Historically low interest rate environment; corporateat
record lows
spreads at record lows
14
15. Transaction Details*
Capitalize on robust financial markets to return capital to
shareholders through a one-time $15.00 per share dividend
– Board declared a dividend of $15.00 per share, conditioned on completion
of the new $4.8 billion financing
− Amount of dividend expected to equate to approximately $2 billion in
aggregate, depending on number of shares outstanding on the record date
− Payment expected on April 2, 2007, ex-dividend trading to begin April 3
Underwritten $4.8 billion financing will fund the special dividend
and refinance existing senior secured credit facilities
The financing will be raised exclusively in the syndicated loan
market and will consist of the following (final sizing to be
determined in syndication):
− $1.5 billion 5-year senior secured revolving credit facility
− $1.5 billion 5-year senior secured term loan A
− $1.8 billion 7-year senior secured term loan B
Underwritten refinance of existing A/R Securitization Facility
− $500 million 3-year commitment
Layer-in ~$2 billion of incremental fixed rate swaps to significantly
mitigate interest rate exposure 15
*subject to completion of financing
16. Revised 2007 Guidance
Previous Post-Transaction
Operating
Profit ~7%
Interest
Expense $195-210 ~$315-330*
Tax 39% 39%
Diluted Continued Modest
Share Count Decline Increase
Adjusted** EPS $2.33 – 2.38 $1.72 – 1.78
UpdateUpdate after completion of transaction
after completion of transaction – if necessary
*Includes the financing of Friendship Dairy acquisition
16
**Adjusted to omit the net impact of facility closing costs, reorganizations, non-recurring charges and discontinued
operations
17. Longer Term Guidance
Operating Profit 7% - 8%
Interest Decreasing year over year
interest expense due to rapid
debt pay down
Share Repurchase Low priority until targeted
leverage achieved
Adjusted EPS Stepped-up interest expense
makes year-on-year
comparisons difficult
Year-on-year comparisons
become more meaningful after
Q1 2008
Expect mid teens EPS growth
once transaction overlaps
complete
17
18. Summary
Dean is uniquely positioned to return capital to its
shareholders through a special dividend
Now is an opportune time for Dean to pursue a
recapitalization
We can execute this transaction while continuing to grow
and deliver future value to shareholders
The convergence of compelling internal
opportunities for growth, strong cash flow and
an attractive debt capital market make this the
right transaction for Dean today
18
