hese financial results reflect the January 2013 sale of the Company's Morningstar business, the gain of which is the primary driver of the diluted earnings of $2.63 per share and is reflected in discontinued operations, as well as the Company's majority ownership interest in its consolidated subsidiary, The WhiteWave Foods Company. The publicly-held minority interest is reflected as a non-controlling interest. On an adjusted basis, first quarter 2013 diluted earnings were $0.29 per share. Excluding the Company's ownership interest in WhiteWave, the Company's Ongoing Dean Foods segment, which includes the former FDD segment and Corporate costs, reported adjusted diluted earnings of $0.16 per share.First quarter consolidated operating income totaled $71 million, compared to first quarter 2012 consolidated operating income of $90 million. First quarter adjusted consolidated operating income totaled $115 million, compared to $119 million in the year-ago period. The Ongoing Dean Foods business segment, which excludes Dean Foods' WhiteWave interest, but includes all corporate costs, reported adjusted first quarter operating income of $74 million, a 12 percent increase from $66 million in the first quarter of 2012 on a pro forma and comparative basis.
"Our continued focus on the fundamentals of cost, volume and price delivered a solid start to the year in the first quarter," said Gregg Tanner, Chief Executive Officer of Dean Foods. "The narrowed focus on the key drivers of the business, coupled with our Company-wide 'say what you'll do and do what you say' attitude, have helped deliver nine consecutive quarters of results at or above our guidance."
Consolidated net income attributable to Dean Foods totaled $493 million for the first quarter of 2013. Consolidated adjusted net income attributable to Dean Foods totaled $54 million. Adjusted net income for the Ongoing Dean Foods segment, was $30 million.
Net sales for the first quarter of 2013 totaled $2.9 billion, compared to $2.9 billion of net sales in the first quarter of 2012. Net sales for the Ongoing Dean Foods segment, totaled $2.3 billion in the first quarter of 2013, compared to $2.4 billion in the same period last year.
Dean Foods' share of U.S. fluid milk sales volume remained relatively steady at 38 percent during the first quarter. Industry fluid milk volumes declined approximately 3.6 percent in the first quarter on an unadjusted basis, based on USDA data and company estimates. On the same basis, Dean Foods unadjusted fluid milk volumes declined 4.1 percent on a year-over-year basis. Management estimates more than half of the decline in Dean Foods fluid milk volumes is attributable to the overlap of leap year and the quality of days in the quarter. USDA adjusted volume data for the first quarter is not available at this time.
The first quarter 2013 average Class I Mover, a measure of raw milk costs, was $18.33 per hundred-weight, an increase of 6 percent from the first quarter of 2012, and 10 percent below the fourth quarter 2012 level.
Consolidated net cash used in continuing operations for the first quarter of 2013 totaled $109 million. Free cash flow from continuing operations, which is defined as net cash provided by continuing operations less capital expenditures, was negative $146 million for first quarter of 2013. Net cash used in continuing operations at Ongoing Dean Foods in the first quarter of 2013 totaled $89 million. This, combined with capital expenditures of $16 million in the quarter resulted in Free Cash Flow at Ongoing Dean Foods of negative $105 million for the first quarter of 2013.
Negative cash flow in the quarter was driven in part by two significant one-time items, specifically the shift in Morningstar accounts receivables from intercompany to third party and swap termination fees associated with the debt repayments made by the Company using the Morningstar sale proceeds. Also impacting cash flow in the quarter were higher incentive compensation payouts reflecting a strong 2012 performance, and increased inventories of ice cream and butter. A reconciliation between net cash used in continuing operations and free cash flow used in continuing operations is provided in the tables below. Total cash flow was supplemented by the receipt of $1.45 billion of proceeds from the sale of the Morningstar division, for which the tax obligations will be paid throughout the remainder of 2013, offset by the repayment of $1.3 billion of Dean Foods' debt.
For purposes of credit facility compliance, at the Ongoing Dean Foods level, which excludes WhiteWave and its debt, total debt at March 31, 2013, net of $19 million cash on hand, was approximately $1.0 billion. The Company's funded debt to EBITDA ratio, as defined by its credit agreements, was 2.13 times as of the end of the first quarter of 2013 versus a maximum leverage ratio covenant of 5.25 times.
