19.

SEGMENT, GEOGRAPHIC AND CUSTOMER INFORMATION

We have three reportable segments: Fresh Dairy Direct, WhiteWave-Alpro and Morningstar.

In the fourth quarter of 2011, our Chief Executive Officer, who is our chief operating decision maker, changed the way he determines strategy and investment plans for our operations. As a result, beginning in the fourth quarter of 2011, our Fresh Dairy Direct and Morningstar operations were separated so that our three reporting segments consisted of Fresh Dairy Direct, WhiteWave-Alpro and Morningstar. This change reflects the divergence between the go-to market strategies, customer bases and objectives of our businesses and reflects a change in how we expect to deploy our capital in the future. We believe these revised segments have increased internal focus and offered management and investors improved visibility into the performance of the segments against their specific objectives. All segment results set forth herein have been recast to present results on a comparable basis. These changes had no impact on consolidated net sales or operating income.

Fresh Dairy Direct is our largest segment with 77 manufacturing facilities geographically located largely based on local and regional customer needs and other market factors. Fresh Dairy Direct manufactures, markets and distributes a wide variety of branded and private label dairy case products, including milk, ice cream, cultured dairy products, creamers, ice cream mix and other dairy products to retailers, distributors, foodservice outlets, educational institutions and governmental entities across the United States. Our products are primarily delivered through what we believe to be one of the most extensive refrigerated direct store delivery ("DSD") systems in the United States.

WhiteWave manufactures, develops, markets and sells a variety of nationally branded plant-based beverages and other soy products, including Silk plant-based beverages such as soy, almond and coconut milks and cultured soy products; dairy and dairy-related products, such as Horizon Organic milk and other dairy products; and International Delight coffee creamers and LAND O LAKES creamers and fluid dairy products. Alpro is a leading provider of branded plant-based beverages, such as soy, almond and hazelnut drinks, and food products in Europe and markets its products under the Alpro and Provamel brands. WhiteWave-Alpro 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. The majority of the WhiteWave-Alpro products are delivered through warehouse delivery systems.

Morningstar Foods is a leading U.S. manufacturer of ESL creams and creamers, beverage and cultured dairy products with an emphasis on foodservice and private label retail customers. These products include half and half, whipping cream, ice cream mix, value-added milks, sour cream and cottage cheese under an array of private labels and the Friendship brand. Morningstar sells its products to a variety of customers, including food distributors, national restaurant chains, grocery stores and mass merchandisers. Morningstar currently operates 12 manufacturing facilities domestically and has one of the most extensive manufacturing networks for these products in the United States. Morningstar products are delivered through warehouse delivery systems and are sold by its internal sales force and independent brokers.

In the second quarter of 2011, we began evaluating strategic alternatives related to our 50% owned joint venture between WhiteWave and Hero Group, which is a part of our WhiteWave-Alpro segment. During the third quarter of 2011, due to continued poor performance by the venture and a desire on our part to invest in core operations, a recommendation was made to, and approved by, the joint venture partners to wind down the joint venture operations during the fourth quarter of 2011. In conjunction with this action plan, we wrote down the joint venture's long-lived assets to fair value less cost to sell as of September 30, 2011. Additionally, based on our continuing level of involvement with the joint venture, we have continued to consolidate the venture in our Consolidated Financial Statements. We completed the majority of the wind down of the joint venture during the fourth quarter of 2011. Upon completion of the wind down in the first half of 2012, we may incur additional charges related to the final settlement with our joint venture partner, Hero Group.

During the second quarter of 2010, we committed to a plan to sell the business operations of Rachel's, which provided organic branded dairy-based chilled yogurt, milk and related dairy products primarily in the United Kingdom. The sale of these operations was completed on August 4, 2010. All Rachel's operations, previously reported within the WhiteWave-Alpro segment, have been reclassified as discontinued operations in our Consolidated Financial Statements for the years ended December 31, 2010 and 2009. See Note 2.

We evaluate the performance of our segments based on sales and operating income or loss before gains and losses on the sale of businesses, facility closing and reorganization costs, litigation settlements, goodwill impairment, foreign exchange gains and losses and write downs related to the wind down of our joint venture. The reporting segments do not include an allocation of the costs related to shared services such as audit services, corporate development, human resources, strategy, tax or treasury. In addition, the expense related to share-based compensation has not been allocated to our segments and is reflected entirely within the caption "Corporate and Other". Therefore, the measure of segment profit or loss presented below is before such items. Additionally, a portion of our WhiteWave-Alpro products are sold by Fresh Dairy Direct and Morningstar. Those sales, together with their related costs, are included in the WhiteWave-Alpro segment for reporting purposes. A portion of our Fresh Dairy Direct products are manufactured by our Morningstar segment. Sales of those products, together with their related costs, are included in the Fresh Dairy Direct segment for reporting purposes.

The amounts in the following tables are obtained from reports used by our executive management team and do not include any allocated income taxes or management fees. There are no significant non-cash items reported in segment profit or loss other than depreciation and amortization.

		$000,000,0		$000,000,0		$000,000,0
	Year Ended December 31
	2011		2010		2009
	(In thousands)
Net sales to external customers:
Fresh Dairy Direct	$	9,596,928	$	8,968,484	$	8,456,219
WhiteWave-Alpro		2,109,892		1,937,983		1,632,970
Morningstar		1,348,673		1,216,420		1,024,593

Total	$	13,055,493	$	12,122,887	$	11,113,782

Intersegment sales:
Fresh Dairy Direct	$	65,641	$	56,321	$	53,161
WhiteWave-Alpro		108,921		107,923		137,997
Morningstar		331,961		333,476		298,316

Total	$	506,523	$	497,720	$	489,474

Operating income (loss):
Fresh Dairy Direct	$	349,488	$	413,486	$	642,410
WhiteWave-Alpro		199,673		166,269		130,268
Morningstar		95,404		90,956		114,263

Total reportable segment operating income		644,565		670,711		886,941
Corporate and Other		(210,134)		(210,266)		(234,025)
Facility closing and reorganization costs		(45,688)		(30,761)		(30,162)
Litigation settlements		(131,300)		(30,000)		—
Goodwill impairment		(2,075,836)		—		—
Other operating income		16,831		—		—

Total		(1,801,562)		399,684		622,754
Other (income) expense:
Interest expense		252,951		248,301		246,510
Other (income) expense, net		(1,915)		161		(4,221)

Consolidated income (loss) from continuing operations before tax	$	(2,052,598)	$	151,222	$	380,465

Depreciation and amortization:
Fresh Dairy Direct	$	161,326	$	157,725	$	146,730
WhiteWave-Alpro		70,075		68,353		58,933
Morningstar		26,438		28,841		29,527
Corporate and Other		27,928		21,161		18,740

Total	$	285,767	$	276,080	$	253,930


	December 31
	2011		2010		2009
	(In thousands)
Assets:
Fresh Dairy Direct	$	2,669,001	$	4,755,240	$	4,847,151
WhiteWave-Alpro		2,086,097		1,984,893		1,985,619
Morningstar		670,870		686,989		673,662
Corporate		325,213		412,431		307,421
Assets Held For Sale		3,182		117,114		30,088

Total	$	5,754,363	$	7,956,667	$	7,843,941

Capital expenditures:
Fresh Dairy Direct	$	164,833	$	173,608	$	180,541
WhiteWave-Alpro		127,209		52,255		35,252
Morningstar		20,317		26,052		31,058
Corporate and Other		13,125		50,059		20,839

Total	$	325,484	$	301,974	$	267,690

Geographic Information — Net sales and long-lived assets for domestic and foreign operations are shown in the table below.


	December 31
	2011		2010		2009
	(In thousands)
Net sales to external customers:
Domestic	$	12,678,363	$	11,773,644	$	10,934,271
Foreign		377,130		349,243		179,511


Long-lived assets:
Domestic	$	3,594,443	$	5,652,676	$	5,672,529
Foreign		443,598		487,775		523,819

During the second half of 2009 and during 2010, net sales from our foreign operations increased due to the acquisition of Alpro, which was completed in July 2009, offset by the exit of certain business relationships within our previously existing foreign operations.

Significant Customers — Our largest customer accounted for approximately 19% of our consolidated net sales in 2011, 2010 and 2009. Sales to this customer were included in our Fresh Dairy Direct, WhiteWave-Alpro and Morningstar segments.