5. Debt

Our outstanding debt as of March 31, 2012 and December 31, 2011 consisted of the following:


	March 31, 2012						December 31, 2011
	Amount Outstanding			Interest Rate			Amount Outstanding			Interest Rate
	(In thousands, except percentages)
Dean Foods Company debt obligations:
Senior secured credit facility	$	2,509,326			2.77	%*	$	2,477,160			3.00	%*
Senior notes due 2016		499,010			7.00			498,959			7.00
Senior notes due 2018		400,000			9.75			400,000			9.75

		3,408,336						3,376,119
Subsidiary debt obligations:
Senior notes due 2017		129,543			6.90			129,117			6.90
Receivables-backed facility		279,490			1.25	**		260,000			1.31	**
Capital lease obligations and other		371						692
Alpro revolving credit facility		—						—

		409,404						389,809

		3,817,740						3,765,928
Less current portion		(253,661	)					(202,539	)

Total long-term portion	$	3,564,079					$	3,563,389

*	Represents a weighted average rate, including applicable interest rate margins, for the senior secured revolving credit facility, term loan A and term loan B.

**	Represents a weighted-average rate, including applicable interest rate margins, for indebtedness outstanding under the receivables securitization facility.

The scheduled maturities of long-term debt at March 31, 2012 were as follows (in thousands):


	Total			Term Loan A		Term Loan B			Other*
2012	$	195,689		$	160,481	$	13,256		$	21,952
2013		511,319			213,975		17,675			279,669
2014		1,076,054			276,384		676,230			123,440
2015		10,535			—		10,535			—
2016		970,923			—		470,923			500,000
Thereafter		1,066,667			—		524,667	**		542,000

Subtotal		3,831,187			650,840		1,713,286			1,467,061
Less discounts		(13,447	)		—		—			(13,447	)

Total outstanding debt	$	3,817,740		$	650,840	$	1,713,286		$	1,453,614

*	Includes our senior secured revolving credit facility, receivables-backed facility, Dean Foods Company senior notes, subsidiary senior notes, capital lease obligations and other debt.

The scheduled maturity of a portion of term loan B is April 2, 2017, subject to the condition that we meet certain leverage, debt, cash or credit rating tests as of December 31, 2015. However, if at least one of these tests is not met, the maturity date for this portion of term loan B will be April 2, 2016.

Senior Secured Credit Facility — Our senior secured credit facility consists of an original combination of a $1.5 billion five-year revolving credit facility, a $1.5 billion five-year term loan A and a $1.8 billion seven-year term loan B. In June 2010, we amended and restated the agreement governing the senior secured credit facility, and entered into a further amendment in December 2010, which included extension of the maturity dates for certain principal amounts, amendment of the maximum permitted leverage ratio and minimum interest coverage ratio and the addition of a senior secured leverage ratio (each as defined in our credit agreement), and the amendment of certain other terms. At March 31, 2012, there were outstanding borrowings of $651 million under the term loan A, $1.71 billion under the term loan B and $145 million under the revolving credit facility. Our average daily balance under the revolving credit facility during the three months ended March 31, 2012 was $109.0 million. Letters of credit in the aggregate amount of $2.2 million were issued under the revolving credit facility but undrawn.

Effective April 2, 2012, pursuant to the terms of our amended and restated credit agreement dated June 30, 2010, the total commitment amount available to us under the senior secured revolving credit facility decreased from $1.5 billion to $1.275 billion, and any principal borrowings on a pro rata basis related to the $225 million of non-extended revolving credit facility commitments became payable. No principal payments are due on the remaining revolving credit facility commitments until April 2, 2014. The amended and restated senior secured revolving credit facility is available for the issuance of up to $350 million of letters of credit and up to $150 million of swing line loans. Our credit agreement requires mandatory principal prepayments upon the occurrence of certain asset sales (provided that such sales, in total, exceed $250 million in any fiscal year), recovery events or as a result of exceeding certain leverage limits.

Our credit agreement permits us to complete acquisitions that meet all of the following conditions without obtaining prior approval: (1) the acquired company is involved in the manufacture, processing and distribution of food or packaging products or any other line of business in which we were engaged as of April 2007; (2) the net cash purchase price for any single acquisition is not greater than $500 million and not greater than $100 million if our leverage ratio is greater than 4.50 times on a pro-forma basis; (3) we acquire at least 51% of the acquired entity; (4) the transaction is approved by the board of directors or shareholders, as appropriate, of the target; and (5) after giving effect to such acquisition on a pro-forma basis, we would have been in compliance with all financial covenants. All other acquisitions must be approved in advance by the required lenders.

The senior secured credit facility contains limitations on liens, investments and the incurrence of additional indebtedness, prohibits certain dispositions of property and restricts certain payments, including dividends. There are no restrictions on these certain payments, including dividends, when our leverage ratio is below 4.50 times on a pro-forma basis. The senior secured credit facility is secured by liens on substantially all of our domestic assets, including the assets of our domestic subsidiaries, but excluding the capital stock of subsidiaries of the former Dean Foods Company ("Legacy Dean"), the real property owned by Legacy Dean and its subsidiaries, and accounts receivable associated with the receivables-backed facility.

The credit agreement contains standard default triggers, including without limitation: failure to maintain compliance with the financial and other covenants contained in the credit agreement, default on certain of our other debt, a change in control and certain other material adverse changes in our business. The credit agreement does not contain any requirements to maintain specific credit rating levels, except as described above with respect to determining the maturity date for the 2017 tranche of term loan B.

Receivables-Backed Facility — We have a $600 million receivables securitization facility pursuant to which certain of our subsidiaries sell their accounts receivable to four wholly-owned entities intended to be bankruptcy-remote. The entities then transfer the receivables to third-party asset-backed commercial paper conduits sponsored by major financial institutions. The assets and liabilities of these four entities are fully reflected in our unaudited Condensed Consolidated Balance Sheets, and the securitization is treated as a borrowing for accounting purposes. The receivables-backed facility is available for the issuance of letters of credit of up to $300 million.

The total amount of receivables sold to these entities as of March 31, 2012 was $886.9 million. During the first quarter of 2012, we borrowed $874.5 million and subsequently repaid $855.0 million under the facility with a remaining drawn balance of $279.5 million at March 31, 2012, excluding letters of credit in the aggregate amount of $245.5 million that were issued but undrawn. Our average daily balance under this facility during the three months ended March 31, 2012 was $271.2 million. The receivables-backed facility bears interest at a variable rate based upon commercial paper and one-month LIBOR rates plus an applicable margin. Our ability to re-borrow under this facility is subject to a monthly borrowing base formula. Based on this formula, we could fully access the $600 million commitment as of March 31, 2012.

As discussed in Note 11, on February 14, 2012, the United States District Court for the Eastern District of Tennessee granted preliminary approval of our settlement agreement with the plaintiffs in the Tennessee dairy farmer actions. As part of the proposed settlement agreement, on February 21, 2012 we issued a standby letter of credit in the amount of $80 million, representing the subsequent payments due under the terms of the settlement agreement.

We are currently in compliance with all covenants under our credit agreements, and based on our internal projections we expect to maintain such compliance for the foreseeable future.

Dean Foods Company Senior Notes due 2018 — On December 16, 2010, we issued $400 million aggregate principal amount of 9.75% senior unsecured notes in a private placement to qualified institutional buyers and in offshore transactions, and on August 3, 2011, we exchanged $400 million of the senior notes for new notes that are registered under the Securities Act and do not have restrictions on transfer, rights to special interest or registration rights. These notes are our senior unsecured obligations and mature on December 15, 2018 with interest payable on June 15 and December 15 of each year. The indenture under which we issued the senior notes due 2018 does not contain financial covenants but does contain covenants that, among other things, limit our ability to incur certain indebtedness, enter into sale-leaseback transactions and engage in mergers, consolidations and sales of all or substantially all of our assets. The carrying value of these notes at March 31, 2012 was $400.0 million.

Dean Foods Company Senior Notes due 2016 — On May 17, 2006, we issued $500 million aggregate principal amount of 7.0% senior unsecured notes. The senior unsecured notes mature on June 1, 2016, and interest is payable on June 1 and December 1 of each year. The indenture under which we issued the senior notes due 2016 does not contain financial covenants but does contain covenants that, among other things, limit our ability to incur certain indebtedness, enter into sale-leaseback transactions and engage in mergers, consolidations and sales of all or substantially all of our assets. The carrying value of these notes at March 31, 2012 was $499.0 million.

Subsidiary Senior Notes due 2017 — Legacy Dean had certain senior notes outstanding at the time of its acquisition, of which one series ($142 million aggregate principal amount) remains outstanding with a maturity date of October 15, 2017. The carrying value of these notes at March 31, 2012 was $129.5 million at 6.90% interest. The indenture governing the Legacy Dean senior notes does not contain financial covenants but does contain certain restrictions, including a prohibition against Legacy Dean and its subsidiaries granting liens on certain of their real property interests and a prohibition against Legacy Dean granting liens on the stock of its subsidiaries. The Legacy Dean senior notes are not guaranteed by Dean Foods Company or Legacy Dean's wholly-owned subsidiaries.

Capital Lease Obligations and Other — Capital lease obligations and other subsidiary debt includes various promissory notes for financing the purchase of property, plant and equipment and capital lease obligations. The various promissory notes payable provide for interest at varying rates and are payable in periodic installments of principal and interest until maturity, when the remaining principal balances are due. Capital lease obligations represent machinery and equipment financing obligations, which are payable in periodic installments of principal and interest and are collateralized by the related assets financed. See Note 11.

Alpro Revolving Credit Facility —Alpro Comm VA has a multicurrency revolving credit facility with a borrowing capacity of €1 million (or its currency equivalent). The facility is unsecured and is guaranteed by Dean Foods Company and various Alpro Comm VA subsidiaries. Proceeds under the facility may be used for working capital and other general corporate purposes of Alpro Comm VA. The subsidiary revolving credit facility is available for the issuance of up to €1 million (or its currency equivalent) of letters of credit. No principal payments are due under the subsidiary revolving credit facility until maturity on July 2, 2012. At March 31, 2012, there were no outstanding borrowings under this facility.

Interest Rate Agreements — See Note 6 for information related to interest rate swap arrangements associated with our debt.

Guarantor Information — The 2016 and 2018 senior notes described above are our unsecured obligations and are fully and unconditionally, joint and severally guaranteed by substantially all of our wholly-owned U.S. subsidiaries other than our receivables securitization subsidiaries.

The following condensed consolidating financial statements present the financial position, results of operations and cash flows of Dean Foods Company ("Parent"), the wholly-owned subsidiary guarantors of the senior notes and separately the combined results of the wholly-owned subsidiaries that are not a party to the guarantees. The wholly-owned non-guarantor subsidiaries reflect certain foreign and other operations, including our Hero/WhiteWave joint venture for the three months ended March 31, 2011 and as of December 31, 2011, in addition to our receivables securitization subsidiaries.

As disclosed in our 2011 Annual Report on Form 10-K, we have restated the presentation of our condensed guarantor financial information to correct certain errors. Accordingly, the unaudited condensed consolidating financial information for the three months ended March 31, 2011 shown below has been restated to properly reflect the investment in and equity earnings of the non-guarantor subsidiaries by certain guarantor subsidiaries in accordance with SEC Regulation S-X, which were previously only presented in the Parent column. We have also restated amounts previously disclosed to (i) properly present the equity in earnings of consolidated subsidiaries in the Parent column which was previously presented in pre-tax income from subsidiaries and non-controlling interest, (ii) properly reflect guarantor subsidiaries' cash flows from operations which were included in the Parent column and correct the associated intercompany balances, and (iii) properly reflect the allocation of certain deferred income taxes and other current and long-term tax liabilities from the Parent column to the guarantor and non-guarantor subsidiaries columns in the corresponding changes to cash flows from operating and financing activities. These corrections had no impact on consolidated results as previously reported.


	Unaudited Condensed Consolidating Balance Sheet as of March 31, 2012
	Parent			Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations			Consolidated Totals
	(In thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	11,534		$	—	$	118,775	$	—		$	130,309
Receivables, net		793			63,203		868,915		—			932,911
Income tax receivable		28,152			—		22		—			28,174
Inventories		—			449,642		26,610		—			476,252
Intercompany receivables		5,979			4,809,045		—		(4,815,024	)		—
Intercompany note receivable		—			70,723		—		(70,723	)		—
Other current assets		24,968			119,185		11,090		—			155,243

Total current assets		71,426			5,511,798		1,025,412		(4,885,747	)		1,722,889
Property, plant and equipment, net		751			1,898,694		183,987		—			2,083,432
Goodwill		—			993,249		166,972		—			1,160,221
Identifiable intangible and other assets, net		113,035			566,763		112,292		—			792,090
Investment in subsidiaries		7,862,861			503,325		—		(8,366,186	)		—

Total	$	8,048,073		$	9,473,829	$	1,488,663	$	(13,251,933	)	$	5,758,632

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable and accrued expenses	$	150,601		$	942,828	$	79,792	$	—		$	1,173,221
Intercompany payables		4,350,657			—		464,367		(4,815,024	)		—
Intercompany note payable		—			—		70,723		(70,723	)		—
Current portion of debt		253,408			253		—		—			253,661

Total current liabilities		4,754,666			943,081		614,882		(4,885,747	)		1,426,882
Long-term debt		3,154,927			129,662		279,490		—			3,564,079
Other long-term liabilities		118,687			538,225		90,966		—			747,878
Long-term litigation settlement		72,525			—		—		—			72,525
Stockholders' equity (deficit):
Total stockholders' equity (deficit)		(52,732	)		7,862,861		503,325		(8,366,186	)		(52,732	)

Total	$	8,048,073		$	9,473,829	$	1,488,663	$	(13,251,933	)	$	5,758,632


	Unaudited Condensed Consolidating Balance Sheet as of December 31, 2011
	Parent			Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations			Consolidated Totals
	(In thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	3,061		$	6,221	$	105,569	$	—		$	114,851
Receivables, net		104			61,156		884,849		—			946,109
Income tax receivable		24,934			—		26					24,960
Inventories		—			426,126		26,024		—			452,150
Intercompany receivables		—			4,821,647		—		(4,821,647	)		—
Intercompany note receivable		—			125,000		—		(125,000	)		—
Other current assets		44,779			117,952		12,339		—			175,070
Assets held for sale		—			—		3,182		—			3,182

Total current assets		72,878			5,558,102		1,031,989		(4,946,647	)		1,716,322
Property, plant and equipment, net		413			1,931,787		182,180		—			2,114,380
Goodwill		—			993,250		162,021		—			1,155,271
Identifiable intangible and other assets, net		69,904			587,442		111,044		—			768,390
Investment in subsidiaries		7,738,221			356,983		—		(8,095,204	)		—

Total	$	7,881,416		$	9,427,564	$	1,487,234	$	(13,041,851	)	$	5,754,363

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable and accrued expenses	$	148,543		$	1,012,736	$	70,886	$	—		$	1,232,165
Intercompany payables		4,245,143			—		576,504		(4,821,647	)		—
Current portion of debt		202,012			259		268		—			202,539
Intercompany note payable		—			—		125,000		(125,000	)		—
Current portion of litigation settlements		60,838			—		—		—			60,838

Total current liabilities		4,656,536			1,012,995		772,658		(4,946,647	)		1,495,542
Long-term debt		3,174,107			129,282		260,000		—			3,563,389
Other long-term liabilities		81,171			547,066		92,846		—			721,083
Long-term litigation settlements		73,000			—		—		—			73,000
Stockholders' equity (deficit):
Dean Foods Company stockholders' equity (deficit)		(103,398	)		7,738,221		356,983		(8,095,204	)		(103,398	)
Non-controlling interest		—			—		4,747		—			4,747

Total stockholders' equity (deficit)		(103,398	)		7,738,221		361,730		(8,095,204	)		(98,651	)

Total	$	7,881,416		$	9,427,564	$	1,487,234	$	(13,041,851	)	$	5,754,363


	Unaudited Condensed Consolidating Statements of Comprehensive Income for the Three Months Ended March 31, 2012
	Parent			Guarantor Subsidiaries		Non- Guarantor Subsidiaries			Eliminations			Consolidated Totals
	(In thousands)
Net sales	$	—		$	3,116,724	$	97,370		$	—		$	3,214,094
Cost of sales		—			2,369,974		56,267			—			2,426,241

Gross profit		—			746,750		41,103			—			787,853
Selling and distribution		—			477,477		26,758			—			504,235
General and administrative		2,880			116,388		10,237			—			129,505
Amortization of intangibles		—			1,954		331						2,285
Facility closing and reorganization costs		—			28,822		—			—			28,822
Interest expense		56,383			2,346		2,018			—			60,747
Other (income) expense, net		(2,900	)		2,997		457			—			554

Income (loss) before income taxes and equity in earnings of subsidiaries		(56,363	)		116,766		1,302			—			61,705
Income tax expense (benefit)		(21,551	)		46,009		(636	)		—			23,822

Income (loss) before equity in earnings of subsidiaries		(34,812	)		70,757		1,938			—			37,883
Equity in earnings of consolidated subsidiaries		72,695			1,938		—			(74,633	)		—

Net income		37,883			72,695		1,938			(74,633	)		37,883

Other comprehensive income, net of tax		6,464			132		13,152			—			19,748

Comprehensive income	$	44,347		$	72,827	$	15,090		$	(74,633	)	$	57,631


	Unaudited Condensed Consolidating Statements of Comprehensive Income for the Three Months Ended March 31, 2011
	Parent						Guarantor Subsidiaries						Nonguarantor Subsidiaries			Eliminations						Consolidated Totals
	As Previously Reported			As Restated			As Previously Reported			As Restated						As Previously Reported			As Restated
	(In thousands)
Net sales	$	—		$	—		$	2,949,860		$	2,949,860		$	99,994		$	—		$	—		$	3,049,854
Cost of sales		—			—			2,241,436			2,241,436			58,136			—			—			2,299,572

Gross profit		—			—			708,424			708,424			41,858			—			—			750,282
Selling and distribution		—			—			459,019			459,019			26,783			—			—			485,802
General and administrative		2,659			2,659			152,463			152,463			12,278			—			—			167,400
Facility closing and reorganization costs		—			—			10,643			10,643			—			—			—			10,643
Other operating income		—			—			(19,490	)		(19,490	)		—									(19,490	)
Interest expense		62,321			62,321			2,778			2,778			171			—			—			65,270
Other (income) expense, net		(2,700	)		(2,700	)		3,199			3,199			(547	)		—			—			(48	)
Income from subsidiaries		(102,985	)		—			—			—			—			102,985			—			—

Income (loss) before income taxes and equity in earnings of subsidiaries		40,705			(62,280	)		99,812			99,812			3,173			(102,985	)		—			40,705
Income tax expense (benefit)		17,323			(25,177	)		42,477			42,477			23			(42,500	)		—			17,323

Income (loss) before equity in earnings of subsidiaries		23,382			(37,103	)		57,335			57,335			3,150			(60,485	)		—			23,382
Equity in earnings of consolidated subsidiaries		—			62,366			—			5,031			—			—			(67,397	)		—

Net income		23,382			25,263			57,335			62,366			3,150			(60,485	)		(67,397	)		23,382
Net loss attributable to the non-controlling interest		1,881			—			—			—			1,881			(1,881	)		—			1,881

Net income attributable to Dean Foods Company	$	25,263		$	25,263		$	57,335		$	62,366		$	5,031		$	(62,366	)	$	(67,397	)	$	25,263
Other comprehensive income, net of tax		13,658			13,658			111			111			27,290			—			—			41,059

Comprehensive income attributable to Dean Foods Company	$	38,921		$	38,921		$	57,446		$	62,477		$	32,321		$	(62,366	)	$	(67,397	)	$	66,322


	Unaudited Condensed Consolidating Statement of Cash Flows for the Three Months Ended March 31, 2012
	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidated Totals
	(In thousands)
Net cash provided by (used in) operating activities	$	(79,145	)	$	53,993		$	28,374		$	3,222
Payments for property, plant and equipment		—			(42,658	)		(1,859	)		(44,517	)
Proceeds from insurance claims		—			2,996			—			2,996
Proceeds from sale of fixed assets		—			1,554			—			1,554
Other, net		—			(275	)		(515	)		(790	)

Net cash used in investing activities		—			(38,383	)		(2,374	)		(40,757	)
Repayment of debt		(13,335	)		(51	)		—			(13,386	)
Proceeds from senior secured revolver		633,100			—			—			633,100
Payments for senior secured revolver		(587,600	)		—			—			(587,600	)
Proceeds from receivables-backed facility		—			—			874,490			874,490
Payments for receivables-backed facility		—			—			(855,000	)		(855,000	)
Issuance of common stock, net of share repurchases for withholding taxes		(2,255	)		—			—			(2,255	)
Tax savings on share-based compensation		286			—			—			286
Net change in intercompany balances		57,422			(21,780	)		(35,642	)		—

Net cash provided by (used in) financing activities		87,618			(21,831	)		(16,152	)		49,635
Effect of exchange rate changes on cash and cash equivalents		—			—			3,358			3,358

Increase (decrease) in cash and cash equivalents		8,473			(6,221	)		13,206			15,458
Cash and cash equivalents, beginning of period		3,061			6,221			105,569			114,851

Cash and cash equivalents, end of period	$	11,534		$	—		$	118,775		$	130,309


	Unaudited Condensed Consolidating Statement of Cash Flows for the Three Months Ended March 31, 2011
	Parent						Guarantor Subsidiaries						Non- Guarantor Subsidiaries						Consolidated Totals
	As Previously Reported			As Restated			As Previously Reported			As Restated			As Previously Reported			As Restated
	(In thousands)
Net cash provided by (used in) operating activities	$	43,906		$	(12,058	)	$	36,391		$	92,556		$	(43,114	)	$	(43,315	)	$	37,183
Payments for property, plant and equipment		—			—			(36,442	)		(36,442	)		(3,969	)		(3,969	)		(40,411	)
Proceeds from divestitures		—			—			91,780			91,780			—			—			91,780
Proceeds from sale of fixed assets		—			—			1,767			1,767			40			40			1,807

Net cash provided by (used in) investing activities		—			—			57,105			57,105			(3,929	)		(3,929	)		53,176
Repayment of debt		(101,625	)		(101,625	)		(4,056	)		(4,056	)		(256	)		(256	)		(105,937	)
Proceeds from senior secured revolver		1,090,800			1,090,800			—			—			—			—			1,090,800
Payments for senior secured revolver		(1,063,900	)		(1,063,900	)		—			—			—			—			(1,063,900	)
Proceeds from receivables-backed facility		—			—			—			—			1,105,000			1,105,000			1,105,000
Payments for receivables-backed facility		—			—			—			—			(1,105,000	)		(1,105,000	)		(1,105,000	)
Issuance of common stock, net of share repurchases for withholding taxes		(580	)		(580	)		—			—			—			—			(580	)
Capital contribution from non-controlling interest		—			—			—			—			2,913			2,913			2,913
Net change in intercompany balances		43,087			99,051			(88,629	)		(144,794	)		45,542			45,743			—

Net cash provided by (used in) financing activities		(32,218	)		23,746			(92,685	)		(148,850	)		48,199			48,400			(76,704	)
Effect of exchange rate changes on cash and cash equivalents		—			—			—			—			2,947			2,947			2,947

Increase in cash and cash equivalents		11,688			11,688			811			811			4,103			4,103			16,602
Cash and cash equivalents, beginning of period		307			307			9,750			9,750			81,950			81,950			92,007

Cash and cash equivalents, end of period	$	11,995		$	11,995		$	10,561		$	10,561		$	86,053		$	86,053		$	108,609