"As we complete the spin-off of WhiteWave we will continue to focus on driving value in our core business and delivering solid 2013 growth," continued Tanner. "Based on recent industry trends, and the forthcoming volume losses primarily related to a single previously disclosed RFP, we now expect volumes to decline low-to-mid single digits for the year. The dairy commodity environment looks to be a neutral factor in our forecast. Diesel, resin and sugar are expected to be modest tailwinds. We believe the momentum behind our cost reduction activities will deliver solid bottom-line results. In addition to the three plant closures announced late last year, we have initiated the closing of our Shreveport, LA and Buena Park, CA fluid milk plant so far in 2013. Overall for the year, we continue to expect to substantially offset the financial impact of the lost volume through accelerated cost reduction activities, resulting in a low to mid-single digit increase in full year 2013 Ongoing Dean Foods' operating income from the rebased 2012 results we issued last quarter."
Excluding WhiteWave's operating results, Dean Foods continues to expect to deliver adjusted diluted earnings per share of between $0.45 and $0.55 for the full year 2013. For the second quarter, Dean Foods expects to earn between $0.11 and $0.15 per share, excluding WhiteWave's operating results.
On May 1, the Company announced that its board of directors had approved the distribution to Dean Foods stockholders of a portion of its remaining equity interest in The WhiteWave Foods Company and had determined the approximate distribution ratios, record date and distribution date for the spin-off.
On May 23, 2013, the distribution date, Dean Foods will distribute to its stockholders an aggregate of 47,686,000 shares of WhiteWave Class A common stock and 67,914,000 shares of WhiteWave Class B common stock as a pro rata dividend on the outstanding shares of Dean Foods common stock outstanding at the close of business on the record date of May 17, 2013. Based on the number of shares of Dean Foods common stock outstanding as of March 31, 2013, Dean Foods estimates that each share of Dean Foods common stock will receive approximately 0.256 shares of WhiteWave Class A common stock and approximately 0.364 shares of WhiteWave Class B common stock in the distribution. The actual distribution ratios for the WhiteWave Class A common stock and the WhiteWave Class B common stock to be distributed per share of Dean Foods common stock will be determined based on the number of shares of Dean Foods common stock outstanding on the record date.
Fractional shares of WhiteWave Class A common stock and WhiteWave Class B common stock will not be distributed to Dean Foods stockholders. Instead, the fractional shares of WhiteWave Class A common stock and WhiteWave Class B common stock will be aggregated and sold in the open market, with the net proceeds distributed pro rata in the form of cash payments to Dean Foods stockholders who would otherwise receive WhiteWave fractional shares. The spin-off has been structured to qualify as a tax-free distribution to Dean Foods stockholders for U.S. federal tax purposes. Cash received in lieu of fractional shares will, however, be taxable. Dean Foods stockholders should consult their tax advisors with respect to U.S. federal, state, local and foreign tax consequences of the distribution.
Upon completion of the spin-off, the Company will cease to own a controlling financial interest in WhiteWave and Dean Foods will no longer consolidate WhiteWave for financial reporting purposes, with a non-controlling interest adjustment for the economic interest in WhiteWave that the Company does not own. Additionally, upon completion of the spin-off, WhiteWave's results will be presented as discontinued operations.
Following the distribution, the Company will retain ownership of 34.4 million shares of WhiteWave's Class A common stock, which Dean Foods expects to dispose of within 18 months of the distribution in one or more debt-for-equity exchanges or other tax-free dispositions. The disposition of Dean Foods' remaining ownership interest in WhiteWave in one or more tax-free dispositions after the spin-off would be subject to various conditions, including Board approval, the receipt of any necessary regulatory or other approvals, the existence of satisfactory market conditions and maintenance of the private letter ruling from the Internal Revenue Service. There can be no assurance as to when or whether any further disposition will occur.
