Segment, Geographic And Customers Information

3 Months Ended

Mar. 31, 2012

Segment, Geographic And Customers Information [Abstract]

Segment, Geographic And Customers Information

12. Segment, Geographic and Customers 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 now consist 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-Alpro manufactures, develops, markets and sells a variety of nationally branded value-added dairy products, such as Horizon Organic milk; nationally branded coffee creamers and beverages, including International Delight and LAND O LAKES; and nationally and internationally branded plant-based foods and beverages, such as Silk soy, almond and coconut milks, and Alpro and Provamel soy, almond and hazelnut drinks and food products. 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 is a leading U.S. manufacturer of ESL creams and creamers, beverages 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 and are sold under a wide 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 sold by its internal sales force and independent brokers and are delivered through warehouse delivery systems.

During the first quarter of 2012 we completed the shutdown of the operations of our 50% owned joint venture between WhiteWave and Hero Group, which was part of our WhiteWave-Alpro segment. For the three months ended and as of March 31, 2012, the joint venture's operations were immaterial and only an immaterial amount of assets remain as part of our investment. We may incur additional charges related to our final settlement with Hero Group.

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, 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.

	Three Months Ended March 31
	2012			2011
	(In thousands)
Net sales to external customers:
Fresh Dairy Direct	$	2,318,142		$	2,234,522
WhiteWave-Alpro		571,215			506,560
Morningstar		324,737			308,772
Total	$	3,214,094		$	3,049,854
Intersegment sales:
Fresh Dairy Direct	$	13,380		$	17,372
WhiteWave-Alpro		29,298			27,785
Morningstar		72,564			83,694
Total	$	115,242		$	128,851
Operating income:
Fresh Dairy Direct	$	101,196		$	86,038
WhiteWave-Alpro		60,310			46,091
Morningstar		28,750			25,444
Total reportable segment operating income		190,256			157,573
Corporate and Other		(38,428	)		(60,493	)
Facility closing and reorganization costs		(28,822	)		(10,643	)
Other operating income		—			19,490
Total	$	123,006		$	105,927

	March 31, 2012		December 31, 2011
	(In thousands)
Assets:
Fresh Dairy Direct	$	2,650,241	$	2,669,001
WhiteWave-Alpro		2,111,413		2,086,097
Morningstar		675,221		670,870
Corporate		321,757		325,213
Assets held for sale		—		3,182
Total	$	5,758,632	$	5,754,363

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

	Three Months Ended March 31
	2012		2011
	(In thousands)
Net sales to external customers:
Domestic	$	3,116,723	$	2,952,807
Foreign		97,371		97,047

	March 31, 2012		December 31, 2011
	(In thousands)
Long-lived assets:
Domestic	$	3,581,587	$	3,594,443
Foreign		454,156		443,598

Significant Customers — Our largest customer accounted for approximately 20% of our consolidated net sales in the three months ended March 31, 2012 and 2011. Sales to this customer were included in our Fresh Dairy Direct, WhiteWave-Alpro and Morningstar segments.