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EX-32.2 - EXHIBIT 32.2 - WHITEWAVE FOODS Cowwav-20150630xex322.htm
EX-10.4 - EXHIBIT 10.4 - WHITEWAVE FOODS Cowwav-20150630xex104.htm
EX-10.3 - EXHIBIT 10.3 - WHITEWAVE FOODS Cowwav-20150630xex103.htm
EX-32.1 - EXHIBIT 32.1 - WHITEWAVE FOODS Cowwav-20150630xex321.htm
EX-31.2 - EXHIBIT 31.2 - WHITEWAVE FOODS Cowwav-20150630xex312.htm
EX-10.2 - EXHIBIT 10.2 - WHITEWAVE FOODS Cowwav-20150630xex102.htm
EX-31.1 - EXHIBIT 31.1 - WHITEWAVE FOODS Cowwav-20150630xex311.htm
EX-10.1 - EXHIBIT 10.1 - WHITEWAVE FOODS Cowwav-20150630xex101.htm
EX-10.5 - EXHIBIT 10.5 - WHITEWAVE FOODS Cowwav-20150630xex105.htm
EX-10.6 - EXHIBIT 10.6 - WHITEWAVE FOODS Cowwav-20150630xex106.htm


 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 _______________________________ 
Form 10-Q
 _______________________________  
(Mark One)
ý
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the Quarterly Period Ended June 30, 2015
or
 
¨
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the Transition Period from                      to                     
Commission File Number 001-35708
  _______________________________  
 
 
The WhiteWave Foods Company
(Exact name of the registrant as specified in its charter)
 _______________________________   
 
Delaware
 
46-0631061
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. employer
identification no.)
1225 Seventeenth Street, Suite 1000
Denver, Colorado 80202
(303) 635-4500
(Address, including zip code, and telephone number, including area code, of the registrant’s principal executive offices)
  _______________________________   
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ý    No  ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ý    No  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (Check one):
 
Large accelerated filer
 
ý
  
Accelerated filer
 
¨
 
 
 
 
Non-accelerated filer
 
o  (Do not check if a smaller reporting company)
  
Smaller reporting company
 
¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.)    Yes  ¨    No  ý
As of July 31, 2015, there were 175,759,310 outstanding shares of common stock, par value $0.01 per share.
 



Table of Contents
 
 
 
Page
Part I — Financial Information
 
 
 
 
Item 1
 
 
 
Item 2
 
 
 
Item 3
 
 
 
Item 4
 
 
Part II — Other Information
 
 
 
 
Item 1
 
 
 
Item 1A
 
 
 
Item 2C
 
 
 
Item 6
 
 



ii


Part I — Financial Information
Item 1. Condensed Consolidated Financial Statements (Unaudited)
The WhiteWave Foods Company
Condensed Consolidated Balance Sheets
(Unaudited)
 
June 30, 2015
 
December 31, 2014
 
(In thousands, except share data)
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
27,408

 
$
50,240

Trade receivables, net of allowance of $2,492 and $2,343
214,643

 
192,692

Inventories
258,161

 
215,669

Deferred income taxes
22,435

 
30,263

Income tax receivable
34,502

 
14,455

Prepaid expenses and other current assets
27,738

 
35,868

Total current assets
584,887

 
539,187

Investment in equity method investments
37,038

 
43,160

Property, plant, and equipment, net
1,057,628

 
993,207

Identifiable intangible and other assets, net
737,270

 
729,011

Goodwill
1,068,540

 
1,068,276

Total Assets
$
3,485,363

 
$
3,372,841

LIABILITIES AND SHAREHOLDERS’ EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable and accrued expenses
$
468,408

 
$
469,764

Current portion of debt and capital lease obligations
21,194

 
21,158

Income tax payable
1,792

 
496

Total current liabilities
491,394

 
491,418

Long-term debt and capital lease obligations
1,533,447

 
1,495,822

Deferred income taxes
272,341

 
267,010

Other long-term liabilities
40,143

 
42,104

Total liabilities
2,337,325

 
2,296,354

Commitments and Contingencies (Note 12)

 

Shareholders’ equity:
 
 
 
Preferred stock, $0.01 par value; 170,000,000 shares authorized, no shares issued and outstanding at June 30, 2015 and December 31, 2014

 

Common stock, $0.01 par value; 1,700,000,000 shares authorized, 175,621,613 issued and outstanding at June 30, 2015; 174,388,132 issued and outstanding at December 31, 2014
1,756

 
1,744

Class B common stock, $0.01 par value; 175,000,000 shares authorized, no shares issued and outstanding at June 30, 2015 and December 31, 2014

 

Additional paid-in capital
906,320

 
878,549

Retained earnings
328,103

 
257,312

Accumulated other comprehensive loss
(88,141
)
 
(61,118
)
Total shareholders’ equity
1,148,038

 
1,076,487

Total Liabilities and Shareholders’ Equity
$
3,485,363

 
$
3,372,841

See notes to condensed consolidated financial statements (unaudited).

1


The WhiteWave Foods Company
Condensed Consolidated Statements of Income
(Unaudited)
 
 
Three months ended June 30,
 
Six months ended June 30,
 
2015
 
2014
 
2015
 
2014
 
(In thousands, except share and per share amounts)
Net sales
$
923,632

 
$
837,926

 
$
1,834,773

 
$
1,668,149

Cost of goods sold
597,474

 
552,666

 
1,200,041

 
1,109,675

Gross profit
326,158

 
285,260

 
634,732

 
558,474

Operating expenses:
 
 
 
 
 
 
 
Selling, distribution, and marketing
174,311

 
156,910

 
342,072

 
304,301

General and administrative
74,845

 
61,630

 
145,589

 
133,916

Asset disposal and exit costs

 
(55
)
 

 
(703
)
Total operating expenses
249,156

 
218,485

 
487,661

 
437,514

Operating income
77,002

 
66,775

 
147,071

 
120,960

Other expense:
 
 
 
 
 
 
 
Interest expense
13,933

 
7,512

 
22,600

 
13,234

Other expense, net
988

 
3,548

 
4,787

 
4,356

Total other expense
14,921

 
11,060

 
27,387

 
17,590

Income before income taxes
62,081

 
55,715

 
119,684

 
103,370

Income tax expense
22,214

 
20,766

 
42,396

 
36,061

Income before loss in equity method investments
39,867

 
34,949

 
77,288

 
67,309

Loss in equity method investments
2,423

 
542

 
6,497

 
542

Net income
$
37,444

 
$
34,407

 
$
70,791

 
$
66,767

Weighted average common shares:
 
 
 
 
 
 
 
Basic
175,317,750

 
173,966,917

 
175,007,291

 
173,796,646

Diluted
180,044,401

 
177,589,222

 
179,662,304

 
177,200,630

Net income per share:
 
 
 
 
 
 
 
Basic
$
0.21

 
$
0.20

 
$
0.40

 
$
0.38

Diluted
$
0.21

 
$
0.19

 
$
0.39

 
$
0.38

See notes to condensed consolidated financial statements (unaudited).

2


The WhiteWave Foods Company
Condensed Consolidated Statements of Comprehensive Income
(Unaudited)
 
 
Three months ended June 30,
 
Six months ended June 30,
 
2015
 
2014
 
2015
 
2014
 
(In thousands)
Net income
$
37,444

 
$
34,407

 
$
70,791

 
$
66,767

Other comprehensive income (loss), net of tax
 
 
 
 
 
 
 
Change in defined benefit pension plan, net of tax benefit (expense) of $34, ($2), ($82), and ($16)
(69
)
 
4

 
162

 
45

Foreign currency translation adjustment
16,422

 
(660
)
 
(27,248
)
 
556

Change in fair value of derivative instruments, net of tax benefit (expense) of $223, ($104), ($33), and $213
(433
)
 
202

 
63

 
(330
)
Other comprehensive income (loss), net of tax
15,920

 
(454
)
 
(27,023
)
 
271

Comprehensive income
$
53,364

 
$
33,953

 
$
43,768

 
$
67,038

See notes to condensed consolidated financial statements (unaudited).

3


The WhiteWave Foods Company
Condensed Consolidated Statements of Shareholders’ Equity
(Unaudited)
 
 
Common Stock
 
 
 
 
 
 
 
 
 
Shares
 
Amount
 
Additional Paid-In
Capital
 
Retained
Earnings
 
Accumulated
Other
Comprehensive
Loss
 
Total
Equity
 
(In thousands, except share data)
Balance at December 31, 2014
174,388,132

 
$
1,744

 
$
878,549

 
$
257,312

 
$
(61,118
)
 
$
1,076,487

Net income

 

 

 
70,791

 

 
70,791

Share-based compensation

 

 
20,433

 

 

 
20,433

Excess tax benefit from share-based compensation

 

 
11,345

 

 

 
11,345

Shares issued in connection with share-based compensation
1,233,481

 
12

 
3,558

 

 

 
3,570

Minimum tax withholdings related to net share settlements of restricted stock units

 

 
(7,565
)
 

 

 
(7,565
)
Other comprehensive loss

 

 

 

 
(27,023
)
 
(27,023
)
Balance at June 30, 2015
175,621,613

 
$
1,756

 
$
906,320

 
$
328,103

 
$
(88,141
)
 
$
1,148,038

See notes to condensed consolidated financial statements (unaudited).

4


The WhiteWave Foods Company
Condensed Consolidated Statements of Shareholders’ Equity
(Unaudited)
 
 
Common Stock
 
 
 
 
 
 
 
 
 
Shares
 
Amount
 
Additional Paid-
In Capital
 
Retained
Earnings
 
Accumulated
Other
Comprehensive
Loss
 
Total
Equity
 
(In thousands, except share data)
Balance at December 31, 2013
173,452,896

 
$
1,735

 
$
851,017

 
$
117,127

 
$
(8,440
)
 
$
961,439

Net income






66,767




66,767

Share-based compensation




15,426






15,426

Excess tax benefit from share-based compensation




3,010






3,010

Shares issued in connection with share-based compensation
659,672


6


1,281






1,287

Minimum tax withholdings related to net share settlements of restricted stock units




(3,491
)





(3,491
)
Conversion of phantom shares into restricted stock units




956






956

Other comprehensive income








271


271

Balance at June 30, 2014
174,112,568

 
$
1,741

 
$
868,199

 
$
183,894

 
$
(8,169
)
 
$
1,045,665

See notes to condensed consolidated financial statements (unaudited).

5


The WhiteWave Foods Company
Condensed Consolidated Statements of Cash Flows
(Unaudited)
 
Six months ended June 30,
 
2015
 
2014
 
(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
 
Net income
$
70,791

 
$
66,767

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation and amortization
55,337

 
54,868

Share-based compensation expense
20,433

 
15,426

Amortization of debt issuance costs
2,017

 
1,448

Asset disposal and exit costs

 
(703
)
(Gain) loss on fixed asset disposal
(2,010
)
 
1,189

Deferred income taxes
16,439

 
(6,463
)
Mark-to-market on derivative instruments
(262
)
 
4,356

Noncash patronage dividends received
(1,270
)
 
(410
)
Loss in equity method investments
6,497

 
542

Other
(492
)
 
130

Net change in operating assets and liabilities, net of acquisition/divestitures
(60,617
)
 
(19,401
)
Net cash provided by operating activities
106,863

 
117,749

CASH FLOWS FROM INVESTING ACTIVITIES:
 
 
 
Investment in equity method investments
(701
)
 
(47,285
)
Payments for acquisitions, net of cash acquired of $1,530 and $5,638
(38,672
)
 
(603,373
)
Proceeds from acquisition adjustments
346

 

Payments for property, plant, and equipment
(140,637
)
 
(139,850
)
Proceeds from sale of fixed assets
8,880

 
122

Net cash used in investing activities
(170,784
)
 
(790,386
)
CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
 
Proceeds from the issuance of debt

 
500,000

Repayment of debt
(10,000
)
 
(10,000
)
Payments on capital lease obligations
(584
)
 
(508
)
Proceeds from revolver line of credit
270,345

 
489,850

Payments on revolver line of credit
(222,100
)
 
(340,060
)
Proceeds from exercise of stock options
3,558

 
1,281

Minimum tax withholding paid on behalf of employees for restricted stock units
(7,565
)
 
(3,491
)
Excess tax benefit from share-based compensation
11,345

 
3,196

Payment of deferred financing costs
(39
)
 
(3,378
)
Net cash provided by financing activities
44,960

 
636,890

Effect of exchange rate changes on cash and cash equivalents
(3,871
)
 
595

DECREASE IN CASH AND CASH EQUIVALENTS
(22,832
)
 
(35,152
)
Cash and cash equivalents, beginning of period
50,240

 
101,105

Cash and cash equivalents, end of period
$
27,408

 
$
65,953

SUPPLEMENTAL CASH FLOW INFORMATION
 
 
 
Non-cash activity - Unpaid purchases of plant and equipment
$
21,673

 
$
32,854

Non-cash activity - Conversion of phantom shares to restricted stock units

 
956

See notes to condensed consolidated financial statements (unaudited).

6


THE WHITEWAVE FOODS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Three and Six Months Ended June 30, 2015 and 2014
(Unaudited)
Unless otherwise indicated, references in these notes to the unaudited condensed consolidated financial statements to “we,” “us,” “our,” “WhiteWave,” or the “Company” refer to The WhiteWave Foods Company’s operations, taken as a whole.
1. General
Nature of Our Business — We are a leading consumer packaged food and beverage company focused on high-growth product categories that are aligned with emerging consumer trends. We manufacture, market, distribute, and sell branded plant-based foods and beverages, organic greens and produce, coffee creamers and beverages, and premium dairy products throughout North America and Europe. We also hold a 49% ownership interest in a joint venture that manufactures, markets, distributes, and sells branded plant-based beverages in China. Our brands distributed in North America include Silk and So Delicious plant-based foods and beverages, Earthbound Farm organic salads, fruits and vegetables, International Delight and LAND O LAKES coffee creamers and beverages, and Horizon Organic premium dairy products and branded macaroni and cheese and snack foods, while our European brands of plant-based foods and beverages include Alpro and Provamel, and plant-based beverages in China are sold under the Silk ZhiPuMoFang brand.
On May 29, 2015, the Company acquired substantially all of the assets and liabilities of EIEIO, Inc. the company that owns the Magicow ("Magicow") brand and other brands for $40.2 million in cash. Magicow, which is based outside Austin, Texas, manufactures, markets and distributes bulk, bag-in-box and shelf stable creamers, coffee beverages and whip toppings.  The acquisition of Magicow expands our portfolio of bulk coffee creamer and flavor dispensing products and provides new product capabilities to support growth in our away-from-home channel. Magicow's results of operations have been included in our condensed consolidated statements of income of our Americas Foods & Beverages segment from the date of acquisition.
On June 9, 2015, the Company announced that it agreed to acquire Sequel Naturals Ltd, the company that owns the Vega brand ("Vega") and is a pioneer and leader in plant-based nutrition products, for approximately $550 million in cash funded by borrowings under our existing credit facility. Vega offers a broad range of plant-based nutrition products - primarily powdered shakes and snack bars. This acquisition represents an opportunity for the Company to extend its plant-based foods and beverages platform into nutritional powders and bars, and pursue additional innovation opportunities. The Company completed this acquisition on August 1, 2015.
Basis of Presentation — The unaudited condensed consolidated financial statements contained in this Quarterly Report on Form 10-Q (“Form 10-Q”) have been prepared on the same basis as the audited consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2014, which was filed with the Securities and Exchange Commission ("SEC") on February 27, 2015.
In our opinion, we have made all necessary adjustments (which generally include normal recurring adjustments) in order to present fairly, in all material respects, our consolidated financial position, results of operations and cash flows as of the dates and for the periods presented. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been omitted pursuant to SEC rules and regulations. Our results of operations for the three and six months ended June 30, 2015 and 2014 may not be indicative of our operating results for the full year. The unaudited condensed consolidated financial statements contained in this Form 10-Q should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2014 contained in our Annual Report on Form 10-K for the year ended December 31, 2014.
Certain reclassifications of previously reported amounts have been made to conform to current year presentation in the unaudited condensed consolidated balance sheets, unaudited condensed consolidated statements of shareholders' equity, Note 13 "Segment, Geographic, and Customer Information" and Note 15 “Supplemental Guarantor Financial Information.” These reclassifications did not impact previously reported amounts on the Company’s unaudited condensed consolidated balance sheets, statements of income and statements of cash flows.
Recently Issued Accounting Pronouncements — In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers: Topic 606, to clarify the principles used to recognize revenue for all entities. In July 2015, the FASB approved a one-year deferral of the effective date of ASU 2014-09. The new guidance will be effective for annual and interim periods beginning on or after December 15, 2017 and will replace most existing revenue recognition guidance under U.S.

7


GAAP when it becomes effective. Early adoption will be permitted as of the December 31, 2016 original effective date. We are currently evaluating the effects, if any, adoption of this guidance will have on the Company's consolidated financial statements.

In June 2014, the FASB issued ASU No. 2014-12, Compensation—Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period which amends the guidance in ASC 718 and clarifies that entities should treat performance targets that can be met after the requisite service period of a share-based payment award as performance conditions that affect vesting. Accordingly, an entity would not record compensation expense (measured as of the grant date without taking into account the effect of the performance target) related to an award for which transfer to the employee is contingent on the entity’s satisfaction of a performance target until it becomes probable that the performance target will be met. The ASU’s guidance is effective for reporting periods (including interim periods) beginning after December 15, 2015. The adoption will not have an impact to the Company’s consolidated financial statements.
In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, to provide guidance on management's responsibility to perform interim and annual assessments of an entity’s ability to continue as a going concern and to provide related disclosure requirements. This guidance applies to all entities and is effective for annual periods ending after December 15, 2016, and interim periods thereafter, with early adoption permitted. The adoption will not have an impact to the Company’s consolidated financial statements.

In February 2015, the FASB issued ASU No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis, which amends the consolidation requirements in ASC 810 and significantly changes the consolidation analysis required under U.S. GAAP. The guidance in the ASU is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2015. We are currently evaluating the effects, if any, adoption of this guidance will have on the Company's consolidated financial statements.

In April 2015, the FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs, which requires debt issuance costs to be presented in the balance sheet as a direct deduction from the associated debt liability. For public business entities, the standard is effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early adoption is permitted for financial statements that have not been previously issued. The new guidance will be applied on a retrospective basis. We are currently evaluating the effects adoption of this guidance will have on the Company's consolidated financial statements.

In April 2015, the FASB issued ASU No. 2015-04, Practical Expedient for the Measurement Date of an Employer’s Defined Benefit Obligation and Plan Assets, which permits an entity with a fiscal year-end that does not fall on a month-end to measure defined benefit plan obligations and assets as of the month-end that is closest to the entity’s fiscal year-end, and apply that methodology consistently from year to year. The ASU also requires an entity to adjust the measurement of defined benefit plan obligations and assets to reflect contributions or significant events that occur between the month-end date used to measure defined benefit plan obligations and assets and the entity’s fiscal year-end. ASU 2015-04 is effective for public business entities for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. The ASU requires prospective application and permits earlier application for all entities. We do not believe the adoption of this guidance will have an impact on the Company's consolidated financial statements.

In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory. This ASU discusses amendments to existing accounting guidance to modify the subsequent measurement of inventory. Under existing guidance, an entity measures inventory at the lower of cost or market, with market defined as replacement cost, net realizable value (NRV), or NRV less a normal profit margin. An entity uses current replacement cost provided that it is not above NRV (ceiling) or below NRV less a normal profit margin (floor). Amendments in the new guidance require an entity to subsequently measure inventory at the lower of cost or net realizable value and eliminates the need to determine replacement cost and evaluate whether it is above the ceiling or below the floor. NRV is defined as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. For public business entities, the ASU is effective for interim and annual periods beginning after December 15, 2016. Early application is permitted for all entities and should be applied prospectively. We are currently evaluating the effects adoption of this guidance will have on the Company's consolidated financial statements.
2. Acquisitions and Divestitures
Acquisitions

8


Earthbound Farm
On January 2, 2014, the Company acquired Earthbound Farm, one of the largest organic produce brands in North America, from the existing shareholders in accordance with an Agreement and Plan of Merger dated December 8, 2013. The acquisition added to our focus on high-growth product categories that are aligned with emerging customer trends. The total consideration for the acquisition was approximately $608.7 million in cash. The acquisition was funded by approximately $615 million in borrowings under our senior secured credit facilities.
The acquisition was accounted for using the acquisition method of accounting. Assets acquired and liabilities assumed in connection with the acquisition have been recorded at their fair values. The fair values were determined by management based in part on an independent valuation of assets acquired, which includes intangible assets of $255.6 million. Intangible assets subject to amortization of $104.9 million are being amortized over a weighted average period of 15 years and relate primarily to customer and supplier relationships. We have completed the purchase price allocation related to the Earthbound acquisition, and negotiations regarding final purchase price adjustments were completed subsequent to the end of the second quarter. The gain from the final negotiation will be recorded in the third quarter of 2015 in our unaudited condensed consolidated statements of income.
The following table summarizes allocation of the purchase price to the fair value of assets acquired.
 
 
January 2, 2014
 
(In thousands)
Assets acquired:
 
Cash and cash equivalents
$
5,638

Inventories
22,299

Other current assets
54,260

Property, plant and equipment
147,390

Trademarks
150,700

Intangible assets with finite lives
104,900

Liabilities assumed:
 
Accounts payable and other accruals
58,328

Income taxes and deferred taxes, net
26,857

Obligations under capital leases
22,646

Total identifiable net assets
377,356

Goodwill
231,309

Total purchase price
$
608,665

Goodwill is calculated as the excess of consideration paid over the net assets acquired and represents synergies, organic growth and other benefits that are expected to arise from integrating the Earthbound Farm assets into our operations. Goodwill was recorded in the Americas Fresh Foods segment. The amount of goodwill expected to be tax deductible is approximately $88.4 million.
So Delicious Dairy Free
On October 31, 2014, the Company acquired the company that owns So Delicious® Dairy Free ("So Delicious") from its existing shareholders for total consideration of approximately $196.6 million in cash. So Delicious manufactures, markets and distributes plant-based beverages, creamers, cultured products and frozen desserts and is based in Springfield, Oregon. The acquisition of So Delicious expands our portfolio of plant-based food and beverage products and provides the company with an entry into the growing, plant-based frozen dessert category. So Delicious’ results of operations have been included in our statements of income in our Americas Foods & Beverages segment from the date of acquisition.
The acquisition was accounted for using the acquisition method of accounting. Assets acquired and liabilities assumed in connection with the acquisition have been recorded at their fair values. The fair values were determined by management based in part on an independent valuation of assets acquired, which includes intangible assets of $83.0 million. Intangible assets subject to amortization of $29.8 million are being amortized over a weighted average period of 15 years and relate primarily to customer relationships. Certain estimated values for the So Delicious acquisition are not yet finalized pending the final

9


purchase price allocations. In the six months ended June 30, 2015, we recorded $1.8 million of purchase accounting adjustments. We expect to finalize the allocation of the purchase price in 2015.
The following table summarizes allocation of the purchase price to the fair value of assets acquired and liabilities assumed. The allocation of the purchase price in the table below is preliminary and subject to change based on the finalization of the purchase price.
 
 
October 31, 2014
 
(In thousands)
Assets acquired:
 
Cash and cash equivalents
$
1,552

Inventories
21,528

Other current assets
10,585

Property, plant and equipment
8,504

Trademarks
53,216

Intangible assets with finite lives
29,768

Liabilities assumed:
 
Accounts payable and other accruals
11,050

Other long-term liabilities
429

Total identifiable net assets
113,674

Goodwill
82,951

Total purchase price
$
196,625

Goodwill is calculated as the excess of consideration paid over the net assets acquired and represents synergies, organic growth and other benefits that are expected to arise from integrating the So Delicious assets into our operations. Goodwill is recorded in the Americas Foods & Beverages segment. All of the goodwill is tax deductible.
EIEIO
On May 29, 2015, the Company acquired substantially all of the assets and liabilities of EIEIO, Inc. the company that owns the Magicow ("Magicow") brand and other brands for $40.2 million in cash. Magicow, which is based outside Austin, Texas, manufactures, markets and distributes bulk, bag-in-box and shelf stable creamers, coffee beverages and whip toppings.  The acquisition of Magicow expands our portfolio of bulk coffee creamer and flavor dispensing products and provides new product capabilities to support growth in our away-from-home channel. In connection with the acquisition of Magicow, we incurred $0.3 million in expenses for the three and six months ended June 30, 2015 related to due diligence, investment advisors and regulatory matters. The expenses directly associated with the acquisition were recorded in general and administrative expenses in our condensed consolidated statements of income and were not allocated to our segments and are reflected entirely within corporate and other. Magicow's results of operations have been included in our condensed consolidated statements of income of our Americas Foods & Beverages segment from the date of acquisition. Net sales were $1.5 million from the acquisition date to June 30, 2015.
The acquisition was accounted for using the acquisition method of accounting. Assets acquired and liabilities assumed in connection with the acquisition have been recorded at their fair values. The fair values were determined by management based in part on an independent valuation of assets acquired, which includes intangible assets of approximately $21.8 million and relate primarily to tradenames. Intangible assets subject to amortization of approximately $10.2 million are being amortized over a 15 year term and relate primarily to customer relationships. Certain estimated values for the acquisition are not yet finalized pending the final purchase price allocations. We expect to finalize the allocation of the purchase price within one year of the acquisition.
The following table summarizes allocation of the purchase price to the fair value of assets acquired and liabilities assumed. The allocation of the purchase price in the table below is preliminary and subject to change based on the finalization of the purchase price.

10


 
 
May 29, 2015
 
(In thousands)
Assets acquired:
 
Cash and cash equivalents
$
1,530

Inventories
2,654

Other current assets
2,010

Property, plant and equipment
554

Trademarks
11,600

Intangible assets with finite lives
10,160

Liabilities assumed:
 
Accounts payable and other accruals
1,963

Other long-term liabilities
48

Total identifiable net assets
26,497

Goodwill
13,705

Total purchase price
$
40,202

Goodwill is calculated as the excess of consideration paid over the net assets acquired and represents synergies, organic growth and other benefits that are expected to arise from integrating the Magicow assets into our operations. Goodwill is recorded in the Americas Foods & Beverages segment. All of the goodwill is tax deductible.
Divestitures
SoFine
On March 31, 2014, we completed the sale of SoFine Foods BV (“SoFine”), a wholly-owned subsidiary that operated a soy-based meat-alternatives business in the Netherlands. Management’s intention to pursue a sale was based on the strategic decision to exit this non-core business of the Europe Foods & Beverages segment. In the fourth quarter of 2013, a write-down of $9.8 million was recorded and included in operating expenses in our financial statements.
Idaho Dairy Farm
In 2013, management approved a plan to sell the assets of its dairy farm located in Idaho which was completed in the fourth quarter of 2013. Management’s decision to sell the Idaho dairy farm was based on the strategic decision to focus on Americas Foods & Beverages' core processing, marketing and distribution capabilities. In conjunction with the sale of the Idaho dairy farm, we recorded an impairment charge of $11.1 million included in asset disposal and exit costs in our financial statements. Cash received at the time of sale in the fourth quarter of 2013 was $31.0 million, net of disposal costs. In addition, we recorded a note receivable for $6.4 million which was fully collected by the second quarter of 2014.
In addition to the impairment charge, we recorded a charge of $3.3 million related to lease liabilities, severance and related costs in connection with the Idaho dairy farm sale. Liabilities recorded and the changes therein for the six months ended June 30, 2014 were as follows: 
 
Accrued charges at December 31, 2013
 
Costs paid or otherwise settled
 
Reversal of prior expense
 
Accrued charges at June 30, 2014
 
(In thousands)
Lease liability
$
2,674

 
$
(762
)
 
$
(351
)
 
$
1,561

Severance and related costs
632

 
(598
)
 
(55
)
 
(21
)
Total
$
3,306

 
$
(1,360
)
 
$
(406
)
 
$
1,540


During the six months ended June 30, 2014, we recorded a reversal of $0.7 million of the prior period expenses of which $0.3 million related to the impairment charge and $0.4 million related to the lease liability and severance costs. All liabilities were fully settled as of December 31, 2014.

11


3. Joint Venture with China Mengniu Dairy Company
On January 5, 2014, the Company entered into a joint venture agreement with China Mengniu Dairy Company Limited (“Mengniu”), a leading Chinese dairy company. The joint venture manufactures, markets and sells a range of premium plant-based beverage products and other nutritious products in China. Under the terms of the agreement, the Company owns a 49% stake in the venture while Mengniu owns a 51% stake. In the second quarter of 2014, the joint venture completed its purchase of Yashili Zhengzhou (“Zhengzhou”), a subsidiary of Yashili International Holdings, Ltd (“Yashili”). Zhengzhou’s primary asset is a production facility in China, where the joint venture manufactures its products. Mengniu was the majority owner of Yashili. The purchase price for Zhengzhou was approximately $80.9 million (Chinese Renminbi ("RMB") 504 million), including $60.3 million (Chinese RMB 376.7 million) for the purchase of equity and the balance for the repayment and assumption of debt and other obligations.
Based on the joint venture agreement, the Company has the ability to exert significant influence over the operations and financial policies of the joint venture and has in-substance common stock in the joint venture. Thus, the joint venture is accounted for as an equity-method investment. During the six months ended June 30, 2014, we contributed $47.3 million of cash to the joint venture. No contributions were made during the three and six months ended June 30, 2015 as the joint venture entered into a credit facility with Mengniu for up to Chinese RMB 120 million ($19.4 million USD) that is expected to support its liquidity requirements for 2015. We guarantee up to 49% on the total commitment amount of this credit facility or Chinese RMB 58.8 million ($9.5 million USD). As of June 30, 2015, the joint venture had borrowed Chinese RMB 80 million ($12.9 million USD) under the facility.
In connection with the formation of the joint venture, we incurred nil and $0.3 million in expenses for the three and six months ended June 30, 2014, respectively, related to due diligence, investment advisors and regulatory matters. The expenses have been recorded in general and administrative expenses in our unaudited condensed consolidated statements of income and have not been allocated to our segments and are reflected entirely within corporate and other.

4. Inventories
Inventories consisted of the following:
 
June 30,
2015
 
December 31,
2014
 
(In thousands)
Raw materials and supplies
$
121,674

 
$
101,418

Finished goods
136,487

 
114,251

Total
$
258,161

 
$
215,669

5. Goodwill and Intangible Assets
The changes in the carrying amount of goodwill for the six months ended June 30, 2015 are as follows:
 
 
Americas Foods & Beverages
 
Americas Fresh Foods
 
Europe Foods & Beverages
 
Total
 
(In thousands)
Balance at December 31, 2014
$
685,173

 
$
231,309

 
$
151,794

 
$
1,068,276

Acquisition
13,705

 

 

 
13,705

Purchase price adjustment
(1,906
)
 

 

 
(1,906
)
Foreign currency translation

 

 
(11,535
)
 
(11,535
)
Balance at June 30, 2015
$
696,972

 
$
231,309

 
$
140,259

 
$
1,068,540

The gross carrying amount and accumulated amortization of our intangible assets, other than goodwill, as of June 30, 2015 and December 31, 2014 are as follows:
 

12


 
June 30, 2015
 
December 31, 2014
 
Gross 
carrying
amount
 
Accumulated
amortization
 
Net carrying
amount
 
Gross 
carrying
amount
 
Accumulated
amortization
 
Net carrying
amount
 
(In thousands)
Intangible assets with indefinite lives:
 
 
 
 
 
 
 
 
 
 
 
Trademarks (1)
$
552,034

 
$

 
$
552,034

 
$
547,072

 
$

 
$
547,072

Intangible assets with finite lives:
 
 
 
 
 
 
 
 
 
 
 
Customer-related and other (1)
168,670

 
(31,589
)
 
137,081

 
158,302

 
(26,677
)
 
131,625

Supplier relationships
12,000

 
(1,440
)
 
10,560

 
12,000

 
(960
)
 
11,040

Non-compete agreements
660

 
(300
)
 
360

 
600

 
(200
)
 
400

        Trademarks
968


(964
)

4


968


(964
)

4

Total
$
734,332

 
$
(34,293
)
 
$
700,039

 
$
718,942

 
$
(28,801
)
 
$
690,141


 (1) The change in the carrying amount of intangible assets with indefinite and finite lives is the result of foreign currency translation adjustments.

Amortization expense on finite-lived intangible assets for the three months ended June 30, 2015 and 2014 was $3.0 million and $2.5 million, respectively. Amortization expense on finite-lived intangible assets for the six months ended June 30, 2015 and 2014 was $5.8 million and $5.1 million, respectively. Estimated aggregate finite-lived intangible asset amortization expense for the next five years is as follows (in millions):
 
2015
$
12.5

2016
12.5

2017
12.3

2018
12.2

2019
11.1

6. Income Taxes
For each interim period, the Company estimates the effective tax rate expected to be applicable for the full year and applies that rate to income before income taxes for the period. Additionally, the Company records discrete income tax items in the period in which they are incurred.
The effective tax rate for the three months ended June 30, 2015 was 35.8% compared to 37.3% for the three months ended June 30, 2014. The effective tax rate for the six months ended June 30, 2015 was 35.4% compared to 34.9% for the six months ended June 30, 2014. The decrease in the effective tax rate for the three month period was primarily due to nondeductible transaction costs incurred in the second quarter 2014. The increase in the effective tax rate for the six month period was primarily due to a reduction in our deferred tax liabilities recognized in 2014 as a result of lower state apportionment driven by the sale of the Idaho dairy farm. Changes in the relative profitability of our operating segments, as well as changes to federal, state and foreign tax laws may cause the rate to change from historical rates.
7. Debt and Capital Lease Obligations
Our outstanding debt and capital lease obligations as of June 30, 2015 and December 31, 2014 consisted of the following: 
 
June 30, 2015
 
December 31, 2014
 
 
Amount
outstanding
 
Interest
rate
 
Amount
outstanding
 
Interest
rate
 
 
(In thousands, except percentages)
 
Senior secured credit facilities
$
1,033,245

 
2.12
%
$
995,000

 
2.11
%
Senior unsecured notes
500,000

 
5.38
%
 
500,000

 
5.38
%
 
Capital lease obligations
21,396

 
 
 
21,980

 
 
 
Less current portion
(21,194
)
 
 
 
(21,158
)
 
 
 
Total long-term debt
$
1,533,447

 
 
 
$
1,495,822

 
 
 
*
Represents a weighted average rate, including applicable interest rate margins.
Senior Secured Credit Facilities
On October 12, 2012, we entered into a credit agreement, among us, the subsidiary guarantors listed therein, Bank of America, N.A., as administrative agent, JPMorgan Chase Bank, N.A., as syndication agent, and the other lenders party thereto (the “Credit Agreement”). The Credit Agreement governs our senior secured credit facilities, consisting of a five-year revolving credit facility in a principal amount of $850 million, an original five-year $250 million term loan A-1, and an original seven-year $250 million term loan A-2. We capitalized $12.4 million of deferred financing fees, which were being amortized over the respective revolving and term loan commitments up until the Amendment on August 29, 2014 as described below.

In conjunction with the January 2, 2014 acquisition of Earthbound Farm, under the terms of the Credit Agreement, we entered into an Incremental Term Loan Agreement to establish a new incremental seven-year term loan A-3 facility in an aggregate principal amount of $500.0 million (the “Incremental Term Loan Agreement”). We capitalized $3.3 million of financing fees, which were being amortized over the term of the term loan facility up until the amendment on August 29, 2014 as described below. We also amended the Credit Agreement on January 2, 2014, to, among other things, reset an accordion feature that allows for our senior secured credit facilities to be increased by up to $500.0 million, subject to lenders commitments, and increased the limit of swing line loans to $85.0 million.

On August 29, 2014, we entered into the Third Amendment to the Credit Agreement with Bank of America, N.A., as administrative agent, and the subsidiary guarantors, lenders and voting participants party thereto (the “Third Amendment”). The Third Amendment extended maturity dates, reset amortization requirements, increased liquidity and added additional operating flexibility under the Credit Agreement. The applicable interest rates and fees under the Credit Agreement were not modified in the Third Amendment. As a result of the Third Amendment, we expensed $0.8 million of deferred financing fees related to the Credit Agreement. We capitalized $4.8 million of new deferred financing fees related to the Third Amendment which, in conjunction with $10.1 million of deferred financing fees remaining related to the Credit Agreement, are being amortized over the term of the revolving and term loan commitments as described below. Deferred financing fees are included in identifiable intangible and other assets in our unaudited condensed consolidated balance sheets.
As of June 30, 2015, we had outstanding borrowings of $1.0 billion under our original $2.0 billion senior secured credit facilities, which consisted of $985.0 million of term loan borrowings and $48.2 million borrowed under our $1.0 billion revolving credit facility commitment. We further had $5.9 million in outstanding letters of credit issued under our revolving credit facility, based on our current commitment level and subject to financial covenant requirements. As of June 30, 2015, the revolving credit facility and term loan A-1 bear interest at a rate of LIBOR plus 1.75% and the term loan A-2 at a rate of LIBOR plus 2.00%.
Alpro Revolving Credit Facility
Alpro maintained a revolving credit facility not to exceed €20.0 million ($22.3 million USD) or its currency equivalent up until June 29, 2015. On June 29, 2015, Alpro entered into a new revolving credit facility not to exceed €30.0 million ($33.4 million USD) or its currency equivalent. The facility is unsecured and guaranteed by The WhiteWave Foods Company.
The Alpro revolving credit facility is available for working capital and other general corporate purposes of Alpro and for the issuance of up to €30.0 million letters of credit ($33.4 million USD) or its currency equivalent. At June 30, 2015 and December 31, 2014, there were no outstanding borrowings under these facilities. Principal payments, if any, are due under the subsidiary revolving credit facility upon maturity on June 29, 2016.
Senior Unsecured Notes
On September 17, 2014, we issued $500.0 million in aggregate principal amount of senior notes. The notes mature on October 1, 2022 and bear interest at a rate of 5.375% per annum payable on April 1 and October 1 of each year, which began on April 1, 2015. The net proceeds from the issuance and sale of the notes, after deducting underwriting discounts and commission and offering expenses, was approximately $490.7 million. We utilized the proceeds of the issuance to pay down all outstanding borrowings under our senior secured revolving commitment, with the remaining proceeds increasing our cash balances at that time.
Capital Lease Obligations

13



We are party to leases of certain operating facilities and equipment under capital lease arrangements which bear interest at rates from 3.1% to 8.0% and have expiration dates through 2033. These assets are included in property, plant, and equipment, net, on the unaudited condensed consolidated balance sheets.
8. Derivative Financial Instruments and Fair Value Measurement
Interest Rates
We maintain an interest rate swaps portfolio with a total notional value of $650 million and all with a maturity date of March 31, 2017 (the “2017 swaps”). We are the counterparty to the financial institutions under these swap agreements and are responsible for any required settlements, and the sole beneficiary of any receipts of funds, pursuant to their terms. We are subject to market risk with respect to changes in the underlying benchmark interest rate that impact the fair value of the interest rate swaps.
The following table summarizes the terms of the interest rate swap agreements as of June 30, 2015:
 
Fixed Interest Rates
 
Expiration Date
 
Notional Amount
 
 
 
 
(In thousands)
2.75% to 3.19%
 
March 31, 2017
 
$
650,000

We have not designated such contracts as hedging instruments; therefore, the interest rate swap agreements are marked-to-market at the end of each reporting period and a derivative asset or liability is recorded on our unaudited condensed consolidated balance sheets. Losses on these contracts were $1.0 million and $4.8 million for the three and six months ended June 30, 2015, respectively. Losses on these contracts were $3.6 million and $4.4 million for the three and six months ended June 30, 2014, respectively. Gains and losses are recorded in other expense in our unaudited condensed consolidated statements of income. A summary of these open swap agreements recorded at fair value in our unaudited condensed consolidated balance sheets at June 30, 2015 and December 31, 2014 is included in the table below.
Credit risk under these arrangements is believed to be remote as the counterparties to the interest rate swap agreements are major financial institutions; however, if any of the counterparties to the swap agreements become unable to fulfill their obligation, we may lose any financial benefits of these arrangements.

Commodities
We are exposed to commodity and raw material price fluctuations, including organic and conventional milk, butterfat, almonds, organic and non-genetically modified (“non-GMO”) soybeans, sweeteners, and other commodity costs used in the manufacturing, packaging, and distribution of our products, including utilities, natural gas, resin, and diesel fuel. To secure adequate supplies of materials and bring greater stability to the cost of ingredients and their related manufacturing, packaging, and distribution, we routinely enter into forward purchase contracts and other purchase arrangements with suppliers. Under the forward purchase contracts, we commit to purchasing agreed-upon quantities of ingredients and commodities at agreed-upon prices at specified future dates. The outstanding purchase commitment for these commodities at any point in time typically ranges from one month’s to one year’s anticipated requirements, depending on the ingredient or commodity, but can be longer in some cases. These contracts are considered normal purchases.
In addition to entering into forward purchase contracts, from time to time we may purchase over-the-counter contracts from qualified financial institutions for commodities associated with the production and distribution of our products. Certain of the contracts offset the risk of increases in our commodity costs and are designated as cash flow hedges when appropriate. These contracts are recorded as an asset or liability in our unaudited condensed consolidated balance sheets at fair value, with an offset to accumulated other comprehensive loss to the extent the hedge is effective. Derivative gains and losses included in accumulated other comprehensive loss are reclassified into earnings as the underlying transaction occurs. Any ineffectiveness in our commodity hedges is recorded as an adjustment to distribution expense or cost of goods sold, depending on commodity type, in our unaudited condensed consolidated statements of income.
Derivatives not designated as hedges are not speculative and are used to manage the Company’s exposure to commodity price risk but do not meet the authoritative guidance for hedge accounting. From time to time, the Company enters into commodity forward contracts to fix the price of natural gas and diesel fuel purchases and other commodities at a future delivery date. Changes in the fair value of derivatives not designated as hedges are allocated to cost of goods sold and selling, distribution, and marketing expenses in our unaudited condensed consolidated statements of income. For the three and six

14


months ended June 30, 2015, we recorded a gain of $4.2 million and $5.1 million, respectively, related to our unhedged commodities contracts.
There was no material hedge ineffectiveness related to our commodities contracts designated as hedging instruments during the three and six months ended June 30, 2015 and 2014. A summary of our open commodities contracts recorded at fair value in our unaudited condensed consolidated balance sheets at June 30, 2015 and December 31, 2014 is included in the table below.
Although we may utilize forward purchase contracts and other instruments to mitigate the risks related to commodity price fluctuation, such strategies do not fully mitigate commodity price risk. Adverse movements in commodity prices over the terms of the contracts or instruments could decrease the economic benefits we derive from these strategies.
Foreign Currency
Our international operations represented approximately 19.3% and 18.6% of our long-lived assets as of June 30, 2015 and December 31, 2014, respectively, and 18.8% and 20.0% of net sales for the six months ended June 30, 2015 and 2014, respectively. Sales in foreign countries, as well as certain expenses related to those sales, are transacted in currencies other than our reporting currency, the U.S. Dollar. Our exposures to foreign exchange rates are the Euro, the British Pound, the Canadian dollar, the Mexican peso, and the Chinese RMB against the U.S. dollar. We employ derivative financial instruments to manage our exposure to fluctuations in foreign currency rates related to the purchase of raw materials. We have foreign exchange contracts through July 2016. These contracts are recorded as an asset or liability in our unaudited condensed consolidated balance sheets at fair value, with an offset to accumulated other comprehensive loss to the extent the hedge is effective. Derivative gains and losses included in accumulated other comprehensive loss are reclassified into earnings as the underlying transaction occurs. Any ineffectiveness in our foreign currency exchange hedges is recorded as an adjustment to cost of goods sold in our unaudited condensed consolidated statements of income. There was no material hedge ineffectiveness related to our foreign currency exchange contracts designated as hedging instruments during the three and six months ended June 30, 2015 and 2014.

Fair Value - Derivatives
As of June 30, 2015 and December 31, 2014, derivatives recorded at fair value in our unaudited condensed consolidated balance sheets were as follows:
 
 
Derivative assets
 
Derivative liabilities
 
June 30,
2015
 
December 31,
2014
 
June 30,
2015
 
December 31,
2014
 
(In thousands)
Derivatives designated as Hedging Instruments
 
 
 
 
 
 
 
Foreign currency contracts - current (1)
$
644

 
$
1,159

 
$

 
$

Derivatives not designated as Hedging Instruments
 
 
 
 
 
 
 
Interest rate swap contracts - current (1)

 

 
17,219

 
17,562

Commodities contracts - current (1)

 

 
4,834

 
9,886

Interest rate swap contracts - noncurrent (2)

 

 
9,744

 
13,853

Total derivatives
$
644

 
$
1,159

 
$
31,797

 
$
41,301

 
(1)
Derivative assets and liabilities that have settlement dates equal to or less than 12 months from the respective balance sheet date were included in prepaid expenses and other current assets and accounts payable and accrued expenses, respectively, in our unaudited condensed consolidated balance sheets.
(2)
Derivative liabilities that have settlement dates greater than 12 months from the respective balance sheet date were included in other long-term liabilities in our unaudited condensed consolidated balance sheets.

Gains and losses on derivatives designated as cash flow hedges reclassified from accumulated other comprehensive loss into income for the three and six months ended June 30, 2015 and 2014 were as follows:
 

15


 
Three months ended June 30,
 
Six months ended June 30,
 
 
2015
 
2014
 
2015
 
2014
 
 
(In thousands)
Losses/(gains) on foreign currency contracts (1)
$
(347
)
 
$
148

 
$
(359
)
 
$
308

 
Losses/(gains) on commodities contracts (2)

 
(354
)
 

 
(1,177
)
 
 
(1)
Recorded in cost of goods sold in our unaudited condensed consolidated statements of income.
(2)
Recorded in distribution expense or cost of goods sold, depending on commodity type, in our unaudited condensed consolidated statements of income.
Based on current exchange rates, we estimate that $0.6 million of hedging activity related to our foreign currency contracts will be reclassified from accumulated other comprehensive loss within the next 12 months.
Fair Value Measurements
Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering assumptions, we follow a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:
 
Level 1 — Quoted prices for identical instruments in active markets.
Level 2 — Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-derived valuations, in which all significant inputs are observable in active markets.
Level 3 — Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

A summary of our financial assets and liabilities subject to recurring fair value measurements and the basis for that measurement according to the levels in the fair value hierarchy as of June 30, 2015 and December 31, 2014 is as follows:
 
 
Fair value as of June 30, 2015
 
Level 1
 
Level 2
 
Level 3
 
(In thousands)
Assets:
 
 
 
 
 
 
 
Cash equivalents
$
23

 
$
23

 
$

 
$

Supplemental Executive Retirement Plan investments
3,164

 
3,164

 

 

Foreign currency contracts
644

 

 
644

 

Deferred compensation investments
4,566

 

 
4,566

 

 
$
8,397

 
$
3,187

 
$
5,210

 
$

Liabilities:
 
 
 
 
 
 
 
Senior unsecured notes
$
530,000

 
$
530,000

 
$

 
$

Commodities contracts
4,834

 

 
4,834

 

Interest rate swap contracts
26,963

 

 
26,963

 

 
$
561,797

 
$
530,000

 
$
31,797

 
$


As of June 30, 2015, we had no transfers between Level 1 and Level 2. New derivative contracts transacted during the six months ended June 30, 2015 were included in Level 2.

16


 
Fair value as of December 31, 2014
 
Level 1
 
Level 2
 
Level 3
 
(In thousands)
Assets:
 
 
 
 
 
 
 
Cash equivalents
$
25

 
$
25

 
$

 
$

Supplemental Executive Retirement Plan investments
2,635

 
2,635

 

 

Foreign currency contracts
1,159




1,159



Deferred compensation investments
4,674

 

 
4,674

 

 
$
8,493

 
$
2,660

 
$
5,833

 
$

Liabilities:
 
 
 
 
 
 
 
Senior unsecured notes
$
516,250


$
516,250


$


$

Commodities contracts
9,886

 

 
9,886

 

Interest rate swap contracts
31,415

 

 
31,415

 

 
$
557,551

 
$
516,250

 
$
41,301

 
$

The fair value of our interest rate swaps is determined based on the notional amounts of the swaps and the forward LIBOR curve relative to the fixed interest rates under the swap agreements. The fair value of our commodities contracts is based on the quantities and fixed prices under the agreements and quoted forward commodity prices. The fair value of our foreign currency contracts is based on the notional amounts and rates under the contracts and observable market forward exchange rates. We classify these instruments in Level 2 because quoted market prices can be corroborated utilizing observable benchmark market rates at commonly quoted intervals and observable market transactions of spot currency rates, forward currency prices and the forward LIBOR curve. We did not significantly change our valuation techniques from prior periods.
The Supplemental Executive Retirement Plan (“SERP”) investments are classified as trading securities and are primarily invested in money market funds and held at fair value. We classify these assets as Level 1 as fair value can be corroborated based on quoted market prices for identical instruments in active markets.
The deferred compensation investments are primarily invested in mutual funds and are held at fair value. We classify these assets as Level 2 as fair value can be corroborated based on quoted market prices for identical or similar instruments in markets that are not active.
The fair value of the senior unsecured notes is based on fair value and is determined using Level 1 inputs. We classify the senior notes as Level 1 as fair value can be corroborated based on quoted market prices in active markets.
Due to their near-term maturities, the carrying amounts of trade accounts receivable and accounts payable are considered equivalent to fair value. In addition, because the interest rates on our senior secured credit facilities are variable, their fair values approximate their carrying values.

9. Share-Based Compensation
Under the 2012 Stock Incentive Plan (the "2012 SIP"), a total of 26,850,000 million shares of our common stock were reserved for issuance upon the exercise of stock options or the vesting of restricted stock units (“RSUs”), performance stock units ("PSUs") or restricted stock awards that may be issued to our employees, non-employee directors and consultants. The 2012 SIP also permits awards of stock appreciation rights (“SARs”) and phantom shares as part of our long-term incentive compensation program. In general, awards granted to our employees under the 2012 SIP vest one-third on the first anniversary of the grant date, one-third on the second anniversary of the grant date, and one-third on the third anniversary of the grant date. Unvested awards vest immediately upon a change of control, except for PSUs and all equity awards granted in and after 2015 to the Company’s executive officers. Unvested awards vest immediately in the following additional circumstances: (i) an employee retires after reaching the age of 65, (ii) in certain cases upon an employee’s death or qualified disability, and (iii) except for awards granted in connection with the Company’s initial public offering, an employee with 10 years of service retires after reaching the age of 55.
Share-Based Compensation Expense
The following table summarizes the share-based compensation expense recognized for the Company’s equity and liability classified plans in the three and six months ended June 30, 2015 and 2014:

17


 
 
Three months ended June 30,
 
Six months ended June 30,
 
2015
 
2014
 
2015
 
2014
 
(In thousands)
Share-based compensation expense:
 
 
 
 
 
 
 
Stock options
$
2,381

 
$
2,065

 
$
7,057

 
$
6,605

RSUs
3,648

 
3,736

 
9,601

 
8,821

PSUs
1,608

 

 
3,775

 

Phantom shares
376

 
253

 
740

 
2,196

SARs
4,196

 
388

 
4,975

 
559

Total share-based compensation expense
$
12,209

 
$
6,442

 
$
26,148

 
$
18,181


Stock Options
Under the terms of the 2012 SIP, options may be granted to purchase our common stock at a price equal to the market price on the date the option is granted. Our employee options vest one-third on each of the first, second and third anniversary of the grant date.
Share-based compensation expense for stock options is recognized ratably over the vesting period within general and administrative expense. The expense totaled $2.4 million and $2.1 million for the three months ended June 30, 2015 and 2014, respectively, and $7.1 million and $6.6 million for the six months ended June 30, 2015 and 2014, respectively. The fair value of each option award is estimated on the date of grant using the Black-Scholes valuation model with the following assumptions: 
 
Six months ended June 30,
 
2015
 
2014
Expected volatility
28% - 29%
 
28% - 29%
Expected dividend yield
0%
 
0%
Expected option term
6 years
 
6 years
Risk-free rate of return
1.45% to 1.79%
 
1.82% to 2.10%
Forfeiture rate
—%
 
—%
Since the Company’s common stock did not have a long history of being publicly traded at grant date, the expected term was determined under the simplified method, using an average of the contractual term and vesting period of the stock options. The expected volatility assumption was calculated based on a compensation peer group analysis of stock price volatility with a six-year look back period ending on the grant date. The risk-free rates were based on the average implied yield available on five-year and seven-year U.S. Treasury issues. We have not paid, and do not anticipate paying, a cash dividend on our common stock.
The following table summarizes stock option activity during the six months ended June 30, 2015:
 
 
Number of options
 
Weighted average
exercise price
 
Weighted average
contractual life
 
Aggregate
intrinsic value
Options outstanding at January 1, 2015
11,349,286

 
$
18.03

 
 
 
 
Granted
653,328

 
38.86

 
 
 
 
Forfeited, cancelled and expired (1)
(24,201
)
 
26.10

 
 
 
 
Exercised (1)
(1,605,392
)
 
21.54

 
 
 
 
Options outstanding at June 30, 2015
10,373,021

 
$
18.78

 
6.24
 
$
312,213,360

Options vested and expected to vest at June 30, 2015
10,373,021

 
$
18.78

 
6.24
 
$
312,213,360

Options exercisable at June 30, 2015
7,777,058

 
$
16.82

 
5.55
 
$
249,353,008

 
(1)
Pursuant to the terms of the 2012 SIP, options that are forfeited, cancelled or expired may be available for future grants; however shares delivered to or withheld by the Company for the payment of the exercise price of an option and/or minimum statutory tax withholding related to an exercise, and shares subject to an option that are not issued upon the net exercise of such option, are not added back to the pool of shares available for future awards.

18



During the six months ended June 30, 2015, we received $3.6 million of cash from stock option exercises. At June 30, 2015, there was $10.2 million of unrecognized stock option expense, all of which is related to non-vested awards. This compensation expense is expected to be recognized over the weighted-average remaining vesting period of 1.29 years.
Restricted Stock Units
RSUs are issued to certain senior employees under the 2012 SIP as part of the long-term incentive program. An RSU represents the right to receive one share of common stock in the future. RSUs have no exercise price. RSUs granted to employees vest ratably over three years.

The following table summarizes RSU activity during the six months ended June 30, 2015:
 
RSUs outstanding January 1, 2015
1,347,855

RSUs issued
323,165

Shares issued upon vesting of RSUs (1)
(547,840
)
RSUs cancelled or forfeited (1)
(15,022
)
RSUs outstanding at June 30, 2015
1,108,158

Weighted average grant date fair value per share
$
26.93

 
(1)
Pursuant to the terms of the 2012 SIP, RSUs that are cancelled or forfeited before they vest may be available for future grants; however shares delivered to or withheld by the Company for the payment of the employee's minimum statutory tax withholding related to an RSU vesting are not added back to the pool of shares available for future awards.

Compensation expense for RSUs is recognized ratably over the vesting period. RSU expense totaled $3.6 million and $3.7 million for the three months ended June 30, 2015 and 2014, respectively, and $9.6 million and $8.8 million for the six months ended June 30, 2015 and 2014, respectively. At June 30, 2015, there was $16.8 million of total unrecognized RSU expense, all of which is related to unvested awards. This compensation expense is expected to be recognized over the weighted-average remaining vesting period of 1.42 years.

Performance Stock Units
In February 2015, we granted PSUs to our executive officers under the 2012 SIP as part of our long-term incentive compensation program. PSUs vest based on a comparison of the Company’s EPS growth over the three-year performance period to the EPS growth of companies in the S&P 500 over the same period. In the first year, one third of the PSUs will vest based on our EPS growth in that year compared to the one-year EPS growth of S&P 500 companies. In the second year, one third of the PSUs will vest based on our cumulative EPS growth over the past two years compared to the cumulative two-year EPS growth of S&P 500 companies. In the third year, one third of the PSUs will vest based on our cumulative EPS growth over the past three years compared to the cumulative three-year EPS growth of S&P 500 companies. PSUs will be converted to common stock upon vesting and the payout range is 0 to 200%.

We recognize share-based compensation expense within general and administrative expenses in the consolidated statements of income over the three year performance period based on the Company’s estimated relative performance for each vesting tranche. Accordingly, in 2015 we recognize 100% of the estimated first year expense, 50% of the estimated second year expense and 33.3% of the estimated third year expense. As of June 30, 2015, we have expensed based upon a target payout assumption of 180%.

The following table summarizes PSU activity during the six months ended June 30, 2015:

19


PSUs outstanding January 1, 2015

PSUs issued
107,358

Shares issued upon vesting of PSUs (1)

PSUs cancelled or forfeited (1)

PSUs outstanding at June 30, 2015
107,358

Weighted average grant date fair value per share
$
38.96

(1)
Pursuant to the terms of the 2012 SIP, PSUs that are cancelled or forfeited before they vest may be available for future grants; however shares delivered to or withheld by the Company for the payment of the employee's minimum statutory tax withholding related to a PSU vesting are not added back to the pool of shares available for future awards.
PSU expense totaled $1.6 million and $3.8 million for the three and six months ended June 30, 2015. At June 30, 2015 there was $2.5 million of total unrecognized PSU expense, all of which is related to unvested awards. This compensation expense is expected to be recognized over the weighted-average remaining vesting period of 1.89 years.
Phantom Shares
We previously granted phantom shares under the 2012 SIP as part of our long-term incentive compensation program, which are similar to RSUs in that they are based on the price of WhiteWave stock and vest ratably over a three-year period, but are cash-settled based upon the value of WhiteWave stock at each vesting period. The fair value of the awards is re-measured at each reporting period. Compensation expense is recognized ratably over the vesting period, which is recorded in general and administrative expenses in the unaudited condensed consolidated statement of income.
Compensation expense for phantom shares totaled $0.4 million and $0.3 million for the three months ended June 30, 2015 and 2014, respectively, and $0.7 million and $2.2 million for the six months ended June 30, 2015 and 2014, respectively. A corresponding liability has been recorded in current liabilities in our consolidated balance sheet totaling $1.5 million and $0.8 million as of June 30, 2015 and December 31, 2014, respectively. The 2015 cash settlement of WhiteWave phantom shares was $0.3 million.
The following table summarizes the phantom share activity during the six months ended June 30, 2015:
 
Shares
 
Weighted-average
grant date fair value
per share
Outstanding at January 1, 2015
32,146

 
$
16.19

Granted

 

Converted/paid
(7,081
)
 
15.16

Forfeited

 

Outstanding at June 30, 2015
25,065

 
$
16.48


Stock Appreciation Rights
We previously granted SARs under the 2012 SIP as part of our long-term incentive compensation program, which are similar to stock options in that they are based on the price of WhiteWave stock and vest ratably over a three-year period, but are cash-settled based upon the value of WhiteWave stock at the exercise date.

     The fair value of the awards is re-measured at each reporting period. Compensation expense is recognized over the vesting period, which is recorded in general and administrative expenses in the consolidated statements of income. The expense totaled $4.2 million and $0.4 million for the three months ended June 30, 2015 and 2014, respectively and $5.0 million and $0.6 million for the six months ended June 30, 2015 and 2014, respectively. A corresponding liability has been recorded in current liabilities in our consolidated balance sheets totaling $6.1 million and $1.1 million as of June 30, 2015 and December 31, 2014, respectively. The following table summarizes SAR activity during the six months ended June 30, 2015:
 

20


 
Number of
SARs
 
Weighted
average
exercise price
 
Weighted
average
contractual life
 
Aggregate
intrinsic value
SARs outstanding at January 1, 2015
263,520

 
$
16.49

 
 
 
 
Granted

 

 
 
 
 
Forfeited and cancelled (1)

 

 
 
 
 
Exercised
(125,472
)
 
16.55

 
 
 
 
SARs outstanding at June 30, 2015
138,048

 
$
16.43

 
7.42
 
$
4,478,984

SARs vested and expected to vest at June 30, 2015
138,048

 
$
16.43

 
7.42
 
$
4,478,984

SARs exercisable at June 30, 2015
47,234

 
$
16.35

 
7.43
 
$
1,536,622

 
(1)
Pursuant to the terms of the 2012 SIP, SARs that are cancelled or forfeited may be available for future grants.

10. Accumulated Other Comprehensive Loss
The changes in accumulated other comprehensive loss by component for the three months ended June 30, 2015 were as follows (net of tax):
 
Derivative
instruments (1)
 
Defined benefit pension plan (2)
 
Foreign currency translation adjustment
 
Total
 
 
 
(In thousands)
 
 
Balance at April 1, 2015
$
1,270

 
$
(1,819
)
 
$
(103,512
)
 
$
(104,061
)
Other comprehensive income/(loss) before reclassifications
(780
)
 
(45
)
 
16,422

 
15,597

Amounts reclassified from accumulated other comprehensive income/(loss)
347

 
(24
)
 

 
323

Other comprehensive income/(loss), net of tax benefit of $257
(433
)
 
(69
)
 
16,422

 
15,920

Balance at June 30, 2015
$
837

 
$
(1,888
)
 
$
(87,090
)
 
$
(88,141
)

(1)
The accumulated other comprehensive loss reclassification components affect cost of goods sold. See Note 8 “Derivative Financial Instruments and Fair Value Measurement.”
(2)
The accumulated other comprehensive loss reclassification components are related to amortization of unrecognized actuarial losses and prior service costs which are both included in the computation of net periodic pension cost. See Note 11 “Employee Retirement Plans.”

The changes in accumulated other comprehensive loss by component for the six months ended June 30, 2015 were as follows (net of tax):
 
Derivative
instruments (1)
 
Defined benefit pension plan (2)
 
Foreign currency translation adjustment
 
Total
 
 
 
(In thousands)
 
 
Balance at January 1, 2015
$
774

 
$
(2,050
)
 
$
(59,842
)
 
$
(61,118
)
Other comprehensive income/(loss) before reclassifications
(296
)
 
210

 
(27,248
)
 
(27,334
)
Amounts reclassified from accumulated other comprehensive income/(loss)
359

 
(48
)
 

 
311

Other comprehensive income/(loss), net of tax expense of $115
63

 
162

 
(27,248
)
 
(27,023
)
Balance at June 30, 2015
$
837

 
$
(1,888
)
 
$
(87,090
)
 
$
(88,141
)

(1)
The accumulated other comprehensive loss reclassification components affect cost of goods sold. See Note 8 “Derivative Financial Instruments and Fair Value Measurement.”
(2)
The accumulated other comprehensive loss reclassification components are related to amortization of unrecognized actuarial losses and prior service costs which are both included in the computation of net periodic pension cost. See Note 11 “Employee Retirement Plans.”

The changes in accumulated other comprehensive loss by component for the three months ended June 30, 2014 were as follows (net of tax):

21



 
Derivative
instruments (1)
 
Defined benefit pension plan (2)
 
Foreign currency translation adjustment
 
Total
 
 
 
(In thousands)
 
 
Balance at April 1, 2014
$
(327
)
 
$
(752
)
 
$
(6,636
)
 
$
(7,715
)
Other comprehensive income/(loss) before reclassifications
(4
)
 
8

 
(660
)
 
(656
)
Amounts reclassified from accumulated other comprehensive income/(loss)
206

 
(4
)
 

 
202

Other comprehensive income/(loss), net of tax expense of $106
202

 
4

 
(660
)
 
(454
)
Balance at June 30, 2014
$
(125
)
 
$
(748
)
 
$
(7,296
)
 
$
(8,169
)

(1)
The accumulated other comprehensive loss reclassification components affect cost of goods sold. See Note 8 “Derivative Financial Instruments and Fair Value Measurement.”
(2)
The accumulated other comprehensive loss reclassification components are related to amortization of unrecognized actuarial losses and prior service costs which are both included in the computation of net periodic pension cost. See Note 11 “Employee Retirement Plans.”

The changes in accumulated other comprehensive loss by component for the six months ended June 30, 2014 were as follows (net of tax):
 
Derivative
instruments (1)
 
Defined benefit pension plan (2)
 
Foreign currency translation adjustment
 
Total
 
 
 
(In thousands)
 
 
Balance at January 1, 2014
$
205

 
$
(793
)
 
$
(7,852
)
 
$
(8,440
)
Other comprehensive income/(loss) before reclassifications
(1,199
)
 
53

 
556

 
(590
)
Amounts reclassified from accumulated other comprehensive income/(loss)
869

 
(8
)
 

 
861

Other comprehensive income/(loss), net of tax benefit of $197
(330
)
 
45

 
556

 
271

Balance at June 30, 2014
$
(125
)
 
$
(748
)
 
$
(7,296
)
 
$
(8,169
)

(1)
The accumulated other comprehensive loss reclassification components affect cost of goods sold. See Note 8 “Derivative Financial Instruments and Fair Value Measurement.”
(2)
The accumulated other comprehensive loss reclassification components are related to amortization of unrecognized actuarial losses and prior service costs which are both included in the computation of net periodic pension cost. See Note 11 “Employee Retirement Plans.”
11. Employee Retirement Plans
We have employee benefit plans including a 401(k) plan and European pension plans. Additionally, we contribute to one multi-employer pension plan on behalf of our employees. We have separate, stand-alone defined benefit pension plans for Alpro. The benefits under our Alpro defined benefit plans are based on years of service and employee compensation.
The components of net periodic benefit cost for our pension plans for the three and six months ended June 30, 2015 and 2014 are detailed below:

22


 
Three months ended June 30,
 
Six months ended June 30,
 
2015
 
2014
 
2015
 
2014
 
(In thousands)
Components of net periodic benefit cost:
 
 
 
 
 
 
 
Service cost
$
444

 
$
452

 
$
888

 
$
904

Interest cost
84

 
158

 
168

 
316

Expected return on plan assets
(68
)
 
(117
)
 
(136
)
 
(234
)
Amortization:
 
 
 
 
 
 
 
Prior service cost

 
3

 

 
6

Unrecognized net loss
24

 
1

 
48

 
2

Net periodic benefit cost
$
484

 
$
497

 
$
968

 
$
994

12. Commitments and Contingencies
Lease and Purchase Obligations
We lease certain property, plant, and equipment used in our operations under both capital and operating lease agreements. Such leases, which are primarily for operating facilities, office space, machinery, and equipment, have lease terms ranging from one to 20 years. Rent expense was $6.1 million and $4.4 million for the three months ended June 30, 2015 and 2014, respectively, and $10.3 million and $8.8 million for the six months ended June 30, 2015 and 2014, respectively. The Company leases certain operating facilities and equipment under capital lease arrangements. These assets are included in property, plant, and equipment, net, on the unaudited condensed consolidated balance sheets.
We have entered into various contracts, in the normal course of business, obligating us to purchase minimum quantities of raw materials used in our production and distribution processes, including soybeans and organic raw milk. We enter into these contracts from time to time to ensure a sufficient supply of raw materials. In addition, we have contractual obligations to purchase various services that are part of our production process.
Litigation, Investigations, and Audits
The Company is involved in various litigation, investigations, and audit proceedings in the normal course of business. It is management’s opinion, after consultation with counsel and a review of the facts, that a material adverse effect on the financial position, liquidity, or results of operations, or cash flows of the Company is not probable or reasonably possible.
13. Segment, Geographic, and Customer Information

    Our business is organized into three operating and reportable segments, Americas Foods & Beverages, Americas Fresh Foods and Europe Foods & Beverages, based on our go-to-markets strategies, customer bases, and the objectives of our businesses. Our segments align with how our chief operating decision maker, our CEO, monitors operating performance, allocates resources, and deploys capital.
The Americas Foods & Beverages segment offers products in the plant-based foods and beverages, coffee creamers and beverages, and premium dairy product categories throughout North America, our Americas Fresh Foods segment offers organic greens and produce throughout North America, and our Europe Foods & Beverages segment offers plant-based food and beverage products throughout Europe. We sell our products to a variety of customers, including grocery stores, mass merchandisers, club stores, and convenience stores, as well as various away-from-home channels, including foodservice outlets, across North America and Europe. We sell our products in North America and Europe primarily through our direct sales force and independent brokers and distributors. We utilize ten manufacturing plants, multiple distribution centers, and three strategic co-packers across the United States. Additionally, we have three plants across Europe in the United Kingdom, Belgium and France, each supported by an integrated supply chain. We also utilize third-party co-packers across Europe for certain products.
We evaluate the performance of our segments based on sales and operating income. The amounts in the following tables are obtained from reports used by our chief operating decision maker. There are no significant non-cash items reported in segment profit or loss other than depreciation and amortization.
In addition, the expense related to share-based compensation, which has not been allocated to our segments, is reflected entirely within the caption “Corporate and other”.

23



The following table presents the summarized income statement amounts by segment:
 
 
Three months ended June 30,
 
Six months ended June 30,
 
2015
 
2014
 
2015
 
2014
 
(In thousands)
Total net sales:
 
 
 
 
 
 
 
Americas Foods & Beverages
$
639,784


$
556,461


$
1,280,510


$
1,114,971

Americas Fresh Foods
151,231


153,060


290,878


299,151

Europe Foods & Beverages
132,617


128,405


263,385


254,027

Total
$
923,632


$
837,926


$
1,834,773


$
1,668,149

Operating income:







Americas Foods & Beverages
$
74,339


$
60,000


$
148,282


$
126,038

Americas Fresh Foods
14,805


14,052


22,568


22,588

Europe Foods & Beverages
16,744


14,013


31,108


24,410

Total reportable segment operating income
$
105,888


$
88,065


$
201,958


$
173,036

Corporate and other
(28,886
)

(21,290
)

(54,887
)

(52,076
)
Total operating income
$
77,002


$
66,775


$
147,071


$
120,960

Other expense:







Interest expense
$
13,933


$
7,512


$
22,600


$
13,234

Other expense, net
988


3,548


4,787


4,356

Income before taxes
$
62,081


$
55,715


$
119,684


$
103,370

Depreciation and amortization:







Americas Foods & Beverages
$
16,305


$
15,518


$
32,797


$
30,445

Americas Fresh Foods
6,134


6,242


12,166


12,499

Europe Foods & Beverages
4,795


5,677


9,237


11,349

Corporate and other
573


298


1,137


575

Total
$
27,807


$
27,735


$
55,337


$
54,868

The following tables present sales amounts by product categories:

24


 
 
Three months ended June 30,
 
Six months ended June 30,
 
2015
 
2014
 
2015
 
2014
 
(In thousands)
Total net sales:
 
 
 
 
 
 
 
Americas Foods & Beverages
 
 
 
 
 
 
 
Plant-based food and beverages
$
220,933

 
$
175,661

 
$
427,258

 
$
347,160

Coffee creamers and beverages
242,750

 
228,055

 
500,520

 
461,221

Premium dairy
176,101

 
152,745

 
352,732

 
306,590

Americas Foods & Beverages net sales
639,784

 
556,461

 
1,280,510

 
1,114,971

 
 
 
 
 
 
 
 
Americas Fresh Foods







Organic greens and produce
151,231


153,060


290,878


299,151

Americas Fresh Foods net sales
151,231


153,060


290,878


299,151

 
 
 
 
 
 
 
 
Europe Foods & Beverages
 
 
 
 
 
 
 
Plant-based food and beverages
132,617

 
128,405

 
263,385

 
254,027

Europe Foods & Beverages net sales
132,617

 
128,405

 
263,385

 
254,027

 
 
 
 
 
 
 
 
Total net sales
$
923,632

 
$
837,926

 
$
1,834,773

 
$
1,668,149


The following tables present assets and capital expenditures by segment: 
 
June 30, 2015
 
December 31, 2014
 
(In thousands)
Assets:
 
 
 
Americas Foods & Beverages
$
2,041,751


$
1,935,524

Americas Fresh Foods
724,044


713,211

Europe Foods & Beverages
584,602


563,963

Corporate
134,966


160,143

Total
$
3,485,363


$
3,372,841

 
 
Three months ended June 30,
 
Six months ended June 30,
 
2015
 
2014
 
2015
 
2014
 
(In thousands)
Capital expenditures:
 
 
 
 
 
 
 
Americas Foods & Beverages
$
31,355


$
82,679


$
78,086


$
117,689

Americas Fresh Foods
8,442


4,991


14,440


8,261

Europe Foods & Beverages
17,445


13,260


37,823


21,247

Corporate
115


898


243


1,658

Total
$
57,357


$
101,828


$
130,592


$
148,855

Significant Customers
The Company had a single customer that represented 13.2% and 12.7% of our consolidated net sales in the three months ended June 30, 2015 and 2014, respectively. The same customer represented 13.8% and 13.6% of our consolidated net sales in the six months ended June 30, 2015 and 2014, respectively. Sales to this customer are primarily included in our Americas Foods & Beverages segment.

25


14. Earnings Per Share
Basic earnings per share is based on the weighted average number of common shares outstanding during each period. Diluted earnings per share is based on the weighted average number of common shares outstanding and the effect of all dilutive common stock equivalents outstanding during each period.

The following table reconciles the numerators and denominators used in the computations of both basic and diluted earnings per share: 
 
Three months ended June 30,
 
Six months ended June 30,
 
2015
 
2014
 
2015
 
2014
 
(In thousands, except share and per share data)
Basic earnings per share computation:
 
 
 
 
 
 
 
Numerator:
 
 
 
 
 
 
 
Net income
$
37,444

 
$
34,407

 
$
70,791

 
$
66,767

Denominator:
 
 
 
 
 
 
 
Weighted average common shares
175,317,750

 
173,966,917

 
175,007,291

 
173,796,646

Basic earnings per share
$
0.21

 
$
0.20

 
$
0.40

 
$
0.38

Diluted earnings per share computation:
 
 
 
 
 
 
 
Numerator:
 
 
 
 
 
 
 
Net income
$
37,444

 
$
34,407

 
$
70,791

 
$
66,767

Denominator:
 
 
 
 
 
 
 
Weighted average common shares - basic
175,317,750

 
173,966,917

 
175,007,291

 
173,796,646

Stock option conversion (1)
4,236,404

 
3,090,807

 
4,095,672

 
2,839,542

Stock units (2)
490,247

 
531,498

 
559,341

 
564,442

Weighted average common shares - diluted
180,044,401

 
177,589,222

 
179,662,304

 
177,200,630

Diluted earnings per share
$
0.21

 
$
0.19

 
$
0.39

 
$
0.38

 
 
 
 
 
 
 
 
(1) Anti-dilutive options excluded

 
8,705

 

 
39,366

(2) Anti-dilutive RSUs excluded

 
6,724

 
261

 
4,714

15. Supplemental Guarantor Financial Information

In September of 2014, we issued debt securities that are guaranteed by certain of our 100% owned subsidiaries. In accordance with Rule 3-10 of Regulation S-X promulgated under the Securities Act of 1933, the following condensed consolidating financial statements present the balance sheets as of June 30, 2015 and December 31, 2014 and the statements of comprehensive income for the three and six months ended June 30, 2015 and 2014 and cash flows for each of the six months ended June 30, 2015 and 2014 for The WhiteWave Foods Company (referred to as “Parent” for the purpose of this note only), the combined guarantor subsidiaries, the combined non-guarantor subsidiaries and elimination adjustments necessary to arrive at the information for the Parent, guarantor subsidiaries and non-guarantor subsidiaries on a consolidated basis. Investments in subsidiaries are accounted for using the equity method for this presentation. All guarantors of our debt securities are also guarantors for our senior secured credit facilities. The guarantee is full and unconditional and joint and several. Our senior secured credit facilities are secured by security interest and liens on substantially all of our assets and the assets of our domestic subsidiaries and is presented in the Parent column of the accompanying condensed consolidating balance sheets as of June 30, 2015 and December 31, 2014.

    




26


Condensed Consolidating Balance Sheets
 
 
June 30, 2015
 
 
Parent
 
Guarantor Subsidiaries
 
Non-Guarantor Subsidiaries
 
Eliminations
 
Consolidated Total
 
 
(In thousands)
ASSETS
 
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$

 
$
2,013

 
$
25,395

 
$

 
$
27,408

Trade receivables, net of allowance
 
1,633

 
139,989

 
73,021

 

 
214,643

Inventories
 

 
219,164

 
38,997

 

 
258,161

Deferred income taxes
 
11,418

 
8,871

 
2,146

 

 
22,435

Income tax receivable
 
34,472

 

 
30

 

 
34,502

Prepaid expenses and other current assets
 
1,295

 
13,436

 
13,007

 

 
27,738

Intercompany receivables
 
1,086,156

 
472,824

 

 
(1,558,980
)
 

Total current assets
 
1,134,974

 
856,297

 
152,596

 
(1,558,980
)
 
584,887

Investment in equity method investments
 
3,361

 

 
33,677

 

 
37,038

Investment in consolidated subsidiaries
 
2,026,674

 
422,118

 

 
(2,448,792
)
 

Property, plant, and equipment, net
 
7,202

 
846,162

 
204,264

 

 
1,057,628

Deferred income taxes
 
20,230

 

 

 
(20,230
)
 

Identifiable intangible and other assets, net
 
32,101

 
616,751

 
88,418

 

 
737,270

Goodwill
 

 
928,280

 
140,260

 

 
1,068,540

Total Assets
 
$
3,224,542

 
$
3,669,608

 
$
619,215

 
$
(4,028,002
)
 
$
3,485,363


 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY
 

 

 

 

 

Current liabilities:
 

 

 

 

 

Accounts payable and accrued expenses
 
$
42,120

 
$
309,406

 
$
116,882

 
$

 
$
468,408

Current portion of debt and capital lease obligations
 
20,000

 
1,194

 

 

 
21,194

Income tax payable
 

 

 
1,792

 

 
1,792

Intercompany payables
 
473,356

 
1,065,383

 
20,241

 
(1,558,980
)
 

Total current liabilities
 
535,476

 
1,375,983

 
138,915

 
(1,558,980
)
 
491,394

Long-term debt and capital lease obligations
 
1,513,245

 
20,202

 

 

 
1,533,447

Deferred income taxes
 

 
244,876

 
47,695

 
(20,230
)
 
272,341

Other long-term liabilities
 
27,783

 
1,873

 
10,487

 

 
40,143

Total liabilities
 
2,076,504

 
1,642,934

 
197,097

 
(1,579,210
)
 
2,337,325

Total shareholders' equity
 
1,148,038

 
2,026,674

 
422,118

 
(2,448,792
)
 
1,148,038

Total Liabilities and Shareholders' Equity
 
$
3,224,542

 
$
3,669,608

 
$
619,215

 
$
(4,028,002
)
 
$
3,485,363


27


Condensed Consolidating Balance Sheets
 
 
December 31, 2014
 
 
Parent
 
Guarantor Subsidiaries
 
Non-Guarantor Subsidiaries
 
Eliminations
 
Consolidated Total
 
 
(In thousands)
ASSETS
 
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$

 
$
524

 
$
49,716

 
$

 
$
50,240

Trade receivables, net of allowance
 
317

 
134,352

 
58,023

 

 
192,692

Inventories
 

 
182,770

 
32,899

 

 
215,669

Deferred income taxes
 
12,305

 
15,742

 
2,216

 

 
30,263

Income tax receivable

13,382

 

 
1,073

 

 
14,455

Prepaid expenses and other current assets

4,632

 
18,318

 
12,918

 

 
35,868

Intercompany receivables
 
1,087,095

 
504,442

 

 
(1,591,537
)
 

Total current assets
 
1,117,731

 
856,148

 
156,845

 
(1,591,537
)
 
539,187

Investment in equity method investments
 

 
3,000

 
40,160

 

 
43,160

Investment in consolidated subsidiaries
 
1,968,899

 
438,832

 

 
(2,407,731
)
 

Property, plant, and equipment, net
 
7,953

 
795,696

 
189,558

 

 
993,207

Deferred income taxes
 
20,835

 

 

 
(20,835
)
 

Identifiable intangible and other assets, net
 
31,803

 
600,592

 
96,616

 

 
729,011

Goodwill
 

 
916,482

 
151,794

 

 
1,068,276

Total Assets
 
$
3,147,221

 
$
3,610,750

 
$
634,973

 
$
(4,020,103
)
 
$
3,372,841

 
 
 
 
 
 
 
 
 
 
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
 
 
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
 
 
 
Accounts payable and accrued expenses
 
$
41,478

 
$
319,247

 
$
109,039

 
$

 
$
469,764

Current portion of debt and capital lease obligations
 
20,000

 
1,158

 

 

 
21,158

Income taxes payable
 

 

 
496

 

 
496

Intercompany payables
 
504,442

 
1,062,081

 
25,014

 
(1,591,537
)
 

Total current liabilities
 
565,920

 
1,382,486

 
134,549

 
(1,591,537
)
 
491,418

Long-term debt and capital lease obligations
 
1,475,000

 
20,822

 

 

 
1,495,822

Deferred income taxes
 

 
236,983

 
50,862

 
(20,835
)
 
267,010

Other long-term liabilities
 
29,814

 
1,560

 
10,730

 

 
42,104

Total liabilities
 
2,070,734

 
1,641,851

 
196,141

 
(1,612,372
)
 
2,296,354

Total shareholders' equity
 
1,076,487

 
1,968,899

 
438,832

 
(2,407,731
)
 
1,076,487

Total Liabilities and Shareholders' Equity
 
$
3,147,221

 
$
3,610,750

 
$
634,973

 
$
(4,020,103
)
 
$
3,372,841


28


Condensed Consolidating Statements of Comprehensive Income
 
 
Three months ended June 30, 2015
 
 
Parent
 
Guarantor Subsidiaries
 
Non-Guarantor Subsidiaries
 
Eliminations
 
Consolidated Total
 
 
(In thousands)
Net sales

$


$
791,015


$
132,617


$


$
923,632

Cost of goods sold



523,639


73,835




597,474

Gross profit



267,376


58,782




326,158

Operating expenses:










Selling, distribution, and marketing



144,343


29,968




174,311

General and administrative

26,131


33,889


14,825




74,845

Total operating expenses

26,131


178,232


44,793




249,156

Operating (loss) income

(26,131
)

89,144


13,989




77,002

Other expense (income):










Interest expense

13,522


326


85




13,933

Other expense (income), net

(46,504
)

43,351


4,141




988

Total other expense (income)

(32,982
)

43,677


4,226




14,921

Income before income taxes and equity in earnings of subsidiaries

6,851


45,467


9,763




62,081

Income tax expense

3,534


16,593


2,087




22,214

Income before loss in equity method investments and equity in earnings of subsidiaries

3,317


28,874


7,676




39,867

Loss in equity method investments

205




2,218




2,423

Equity in earnings of consolidated subsidiaries

34,332


5,458




(39,790
)


Net income

37,444


34,332


5,458


(39,790
)

37,444

Other comprehensive income, net of tax

15,920


15,920


16,317


(32,237
)

15,920

Comprehensive income

$
53,364


$
50,252


$
21,775


$
(72,027
)

$
53,364





29


Condensed Consolidating Statements of Comprehensive Income (Loss)
 
 
Six months ended June 30, 2015
 
 
Parent
 
Guarantor Subsidiaries
 
Non-Guarantor Subsidiaries
 
Eliminations
 
Consolidated Total
 
 
(In thousands)
Net sales

$


$
1,571,389


$
263,384


$


$
1,834,773

Cost of goods sold



1,051,644


148,397




1,200,041

Gross profit



519,745


114,987




634,732

Operating expenses:










Selling, distribution, and marketing



282,053


60,019




342,072

General and administrative

50,317


66,841


28,431




145,589

Total operating expenses

50,317


348,894


88,450




487,661

Operating income

(50,317
)

170,851


26,537




147,071

Other expense (income):










Interest expense

21,859


589


152




22,600

Other expense (income), net

(77,018
)

77,664


4,141




4,787

Total other expense (income)

(55,159
)

78,253


4,293




27,387

Income before income taxes and equity in earnings of subsidiaries

4,842


92,598


22,244




119,684

Income tax expense

3,461


33,957


4,978




42,396

Income before loss in equity method investments and equity in earnings of subsidiaries

1,381


58,641


17,266




77,288

Loss in equity method investments

339




6,158




6,497

Equity in earnings of consolidated subsidiaries

69,749


11,108




(80,857
)


Net income

70,791


69,749


11,108


(80,857
)

70,791

Other comprehensive income (loss), net of tax

(27,023
)

(27,023
)

(27,005
)

54,028


(27,023
)
Comprehensive income (loss)

$
43,768


$
42,726


$
(15,897
)

$
(26,829
)

$
43,768








30


Condensed Consolidating Statement of Comprehensive Income
 
 
Three months ended June 30, 2014
 
 
Parent
 
Guarantor Subsidiaries
 
Non-Guarantor Subsidiaries
 
Eliminations
 
Consolidated Total
 
 
(In thousands)
Net sales
 
$

 
$
709,521

 
$
128,405

 
$

 
$
837,926

Cost of goods sold
 

 
479,801

 
72,865

 

 
552,666

Gross profit
 

 
229,720

 
55,540

 

 
285,260

Operating expenses:
 
 
 
 
 
 
 
 
 
 
Selling, distribution, and marketing
 

 
127,968

 
28,942

 

 
156,910

General and administrative
 
20,395

 
27,754

 
13,481

 

 
61,630

Asset disposal and exit costs
 

 
(55
)
 

 

 
(55
)
Total operating expenses
 
20,395

 
155,667

 
42,423

 

 
218,485

Operating income (loss)
 
(20,395
)
 
74,053

 
13,117

 

 
66,775

Other expense (income):
 
 
 
 
 
 
 
 
 
 
Interest expense
 
7,152

 
310

 
50

 

 
7,512

Other expense (income), net
 
(26,924
)
 
30,479

 
(7
)
 

 
3,548

Total other expense (income)
 
(19,772
)
 
30,789

 
43

 

 
11,060

Income (loss) before income taxes
 
(623
)
 
43,264

 
13,074

 

 
55,715

Income tax expense
 
739

 
16,663

 
3,364

 

 
20,766

(Loss) income before loss in equity method investments and equity in earnings of subsidiaries
 
(1,362
)
 
26,601

 
9,710

 

 
34,949

Loss in equity method investments
 

 

 
(542
)
 

 
(542
)
Equity in earnings of consolidated subsidiaries
 
35,769

 
9,168

 

 
(44,937
)
 

Net income
 
34,407

 
35,769

 
9,168

 
(44,937
)
 
34,407

Other comprehensive loss, net of tax
 
(454
)
 
(454
)
 
(445
)
 
899

 
(454
)
Comprehensive income
 
$
33,953

 
$
35,315

 
$
8,723

 
$
(44,038
)
 
$
33,953


31


Condensed Consolidating Statement of Comprehensive Income (Loss)
 
 
Six months ended June 30, 2014
 
 
Parent
 
Guarantor Subsidiaries
 
Non-Guarantor Subsidiaries
 
Eliminations
 
Consolidated Total
 
 
(In thousands)
Net sales
 
$

 
$
1,414,122

 
$
254,027

 
$

 
$
1,668,149

Cost of goods sold
 

 
962,897

 
146,778

 

 
1,109,675

Gross profit
 

 
451,225

 
107,249

 

 
558,474

Operating expenses:
 
 
 
 
 
 
 
 
 
 
Selling, distribution, and marketing
 

 
246,097

 
58,204

 

 
304,301

General and administrative
 
50,470

 
57,204

 
26,242

 

 
133,916

Asset disposal and exit costs
 

 
(703
)
 

 

 
(703
)
Total operating expenses
 
50,470

 
302,598

 
84,446

 

 
437,514

Operating income (loss)
 
(50,470
)
 
148,627

 
22,803

 

 
120,960

Other expense (income):
 
 
 
 
 
 
 
 
 
 
Interest expense
 
12,517

 
630

 
87

 

 
13,234

Other expense (income), net
 
(59,777
)
 
64,133

 

 

 
4,356

Total other expense (income)
 
(47,260
)
 
64,763

 
87

 

 
17,590

Income (loss) before income taxes
 
(3,210
)
 
83,864

 
22,716

 

 
103,370

Income tax expense
 
1,111

 
29,905

 
5,045

 

 
36,061

(Loss) income before loss in equity method investments and equity in earnings of subsidiaries
 
(4,321
)
 
53,959

 
17,671

 

 
67,309

Loss in equity method investments
 

 

 
(542
)
 

 
(542
)
Equity in earnings of consolidated subsidiaries
 
71,088

 
17,129

 

 
(88,217
)
 

Net income
 
66,767

 
71,088

 
17,129

 
(88,217
)
 
66,767

Other comprehensive income, net of tax
 
271

 
271

 
789

 
(1,060
)
 
271

Comprehensive income
 
$
67,038

 
$
71,359

 
$
17,918

 
$
(89,277
)
 
$
67,038



32


Condensed Consolidating Statements of Cash Flows
 
 
 
 
 
Six months ended June 30, 2015
 
 
 
 
 
Parent
 
Guarantor Subsidiaries
 
Non-Guarantor Subsidiaries
 
Eliminations
 
Consolidated Total
 
 
 
 
 
(In thousands)
 CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
 
 
 
 
 
 
 
 
 
 
 
 Net cash provided by operating activities
 
$
3,939

 
$
88,970

 
$
13,954

 
$

 
$
106,863

 CASH FLOWS FROM INVESTING ACTIVITIES:
 

 

 

 

 

 
 
Investment in unconsolidated entity
 
(701
)
 

 

 

 
(701
)
 
 
Payments for acquisition, net of cash acquired of $1,530
 

 
(38,672
)
 

 

 
(38,672
)
 
 
Proceeds from acquisition adjustments


 
346

 

 

 
346

 
 
Payments for property, plant, and equipment
 
(586
)
 
(103,158
)
 
(36,893
)
 

 
(140,637
)
 
 
Intercompany contributions
 
(48,196
)
 

 
(4,772
)
 
52,968

 

 
 
Proceeds from sale of fixed assets
 

 
1,619

 
7,261

 

 
8,880

 
 
 
Net cash used in investing activities
 
(49,483
)
 
(139,865
)
 
(34,404
)
 
52,968

 
(170,784
)
 CASH FLOWS FROM FINANCING ACTIVITIES:
 

 

 

 

 

 
 
Intercompany contributions
 

 
52,968

 

 
(52,968
)
 

 
 
Repayment of debt
 
(10,000
)
 

 

 

 
(10,000
)
 
 
Payments on capital lease obligations
 

 
(584
)
 

 

 
(584
)
 
 
Proceeds from revolver line of credit
 
270,345

 

 

 

 
270,345

 
 
Payments for revolver line of credit
 
(222,100
)
 

 

 

 
(222,100
)
 
 
Proceeds from exercise of stock options
 
3,558

 

 

 

 
3,558

 
 
Minimum tax withholding paid on behalf of employees for restricted stock units
 
(7,565
)
 

 

 

 
(7,565
)
 
 
Excess tax benefit from share-based compensation
 
11,345

 

 

 

 
11,345

 
 
Payment of deferred financing costs
 
(39
)
 

 

 

 
(39
)
 
 
 
Net cash provided by (used in) financing activities
 
45,544

 
52,384

 

 
(52,968
)
 
44,960

 
 
 
Effect of exchange rate changes on cash and cash equivalents
 

 

 
(3,871
)
 

 
(3,871
)
 INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
 

 
1,489

 
(24,321
)
 

 
(22,832
)
 Cash and cash equivalents, beginning of period
 

 
524

 
49,716

 

 
50,240

 Cash and cash equivalents, end of period
 
$

 
$
2,013

 
$
25,395

 
$

 
$
27,408


33


Condensed Consolidating Statements of Cash Flows

 
 
 
 
 
Six months ended June 30, 2014
 
 
 
 
 
Parent
 
Guarantor Subsidiaries
 
Non-Guarantor Subsidiaries
 
Eliminations
 
Consolidated Total
 
 
 
 
 
(In thousands)
 CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
 
 
 
 
 
 
 
 
 
 
 
 Net cash provided by (used in) operating activities
 
$
(18,531
)
 
$
106,768

 
$
29,512

 
$

 
$
117,749

 CASH FLOWS FROM INVESTING ACTIVITIES:
 
 
 
 
 
 
 
 
 
 
 
 
Investment in equity method investment
 

 

 
(47,285
)
 

 
(47,285
)
 
 
Payments for acquisition, net of cash acquired of $5,638
 

 
(603,373
)
 

 

 
(603,373
)
 
 
Payments for property, plant, and equipment
 
(40,350
)
 
(80,205
)
 
(19,295
)
 

 
(139,850
)
 
 
Intercompany contributions
 
(578,517
)
 

 

 
578,517

 

 
 
Proceeds from sale of fixed assets
 

 
122

 

 

 
122

 
 
 
Net cash provided by (used in) investing activities
 
(618,867
)
 
(683,456
)
 
(66,580
)
 
578,517

 
(790,386
)
 CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
 
 
 
 
 
 
 
 
 
 
Intercompany contributions
 

 
577,129

 
1,388

 
(578,517
)
 

 
 
Proceeds from the issuance of debt
 
500,000

 

 

 

 
500,000

 
 
Repayment of debt
 
(10,000
)
 

 

 

 
(10,000
)
 
 
Payments on capital lease obligations
 

 
(508
)
 

 

 
(508
)
 
 
Proceeds from revolver line of credit
 
489,850

 

 

 

 
489,850

 
 
Payments for revolver line of credit
 
(340,060
)
 

 

 

 
(340,060
)
 
 
Proceeds from exercise of stock options
 
1,281

 

 

 

 
1,281

 
 
Minimum tax withholding paid on behalf of employees for restricted stock units
 
(3,491
)
 

 

 

 
(3,491
)
 
 
Excess tax benefit from share-based compensation
 
3,196

 

 

 

 
3,196

 
 
Payment of deferred financing costs
 
(3,378
)
 

 

 

 
(3,378
)
 
 
 
Net cash provided by (used in) financing activities
 
637,398

 
576,621

 
1,388

 
(578,517
)
 
636,890

 
 
 
Effect of exchange rate changes on cash and cash equivalents
 

 

 
595

 

 
595

 DECREASE IN CASH AND CASH EQUIVALENTS
 

 
(67
)
 
(35,085
)
 

 
(35,152
)
 Cash and cash equivalents, beginning of period
 

 
673

 
100,432

 

 
101,105

 Cash and cash equivalents, end of period
 
$

 
$
606

 
$
65,347

 
$

 
$
65,953


16. Subsequent Events

On August 1, 2015, we completed the acquisition of 100% of Sequel Naturals Ltd, the company that owns the Vega brand ("Vega") and is a pioneer and leader in plant-based nutrition products, for approximately $550 million in cash funded by borrowings under our existing credit facility. This acquisition represents an opportunity for us to extend our plant-based foods

34


and beverages platform into nutritional powders and bars, with additional innovation opportunities. In connection with the acquisition of Vega, we incurred $2.4 million in expenses for the three and six months ended June 30, 2015 related to due diligence, investment advisors and regulatory matters. The expanded disclosures prescribed by ASC 805 have not been presented as we have not begun the process of allocating the purchase price. We intend to include Vega’s results of operations in our statements of income in our Americas Foods & Beverages segment at the date of acquisition.

On August 7, 2015, we announced that we have agreed to acquire Wallaby Yogurt Company, Inc. for approximately $125 million in cash. We intend to fund this acquisition with borrowings under our existing credit facility. Founded in 1994 and based in American Canyon, California, Wallaby is a leading manufacturer and distributor of organic dairy yogurt products including Greek and Australian style yogurts and Kefir beverages. The addition of Wallaby will strengthen and expand our growing yogurt portfolio and provide entry into several fast-growing yogurt categories. The acquisition also provides us with additional West Coast based manufacturing capabilities and further expansion and growth opportunities. The transaction is expected to close in the third quarter of 2015, subject to regulatory approvals and other customary closing conditions. We intend to include Wallaby's results of operations in our statements of income in our Americas Foods & Beverages segment at the date of acquisition.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) in this Form 10-Q is provided as a supplement to, and should be read in conjunction with, our audited consolidated financial statements, the accompanying notes, and the MD&A included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2014. Unless otherwise specified, any description of “our”, “we”, and “us” in this MD&A refer to The WhiteWave Foods Company and its operating and non-operating subsidiaries included within our reporting segments and Corporate.
Cautionary Statement Regarding Forward-Looking Statements
This Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which are subject to risks, uncertainties and assumptions that are difficult to predict. Forward-looking statements are predictions based on our current expectations and our projections about future events, and are not statements of historical fact. Forward-looking statements include statements concerning our business strategy, among other things, including anticipated trends and developments in, and management plans for, our business and the markets in which we operate. In some cases, you can identify these statements by forward-looking words, such as “estimate,” “expect,” “anticipate,” “project,” “plan,” “intend,” “believe,” “forecast,” “foresee,” “likely,” “may,” “should,” “might,” “will,” and “could,” the negative or plural of these words and other comparable terminology. All forward-looking statements included in this Form 10-Q are based upon information available to us as of the filing date of this Form 10-Q, and we undertake no obligation to update any of these forward-looking statements for any reason. You should not place undue reliance on these forward-looking statements. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from those expressed or implied by these statements. These factors include the matters discussed in the section entitled “Part II — Other Information — Item 1A — Risk Factors” in this Form 10-Q, and elsewhere in this Form 10-Q. You should carefully consider the risks and uncertainties described under these sections.
Overview of the Business
We are a leading consumer packaged food and beverage company focused on high-growth product categories that are aligned with emerging consumer trends. We manufacture, market, distribute, and sell branded plant-based foods and beverages, organic greens and produce, coffee creamers and beverages, and premium dairy products throughout North America and Europe. We also hold a 49% ownership interest in a joint venture that manufactures, markets, distributes, and sells branded plant-based beverages in China. Our brands distributed in North America include Silk and So Delicious plant-based foods and beverages, Earthbound Farm organic salads, fruits and vegetables, International Delight and LAND O LAKES coffee creamers and beverages, and Horizon Organic premium dairy products and branded macaroni and cheese and snack foods, while our European brands of plant-based foods and beverages include Alpro and Provamel, and plant-based beverages in China are sold under the Silk ZhiPuMoFang brand.
We sell our products primarily across North America and Europe to a variety of customers, including grocery stores, mass merchandisers, club stores, and convenience stores, as well as through various away-from-home channels, including restaurants and foodservice outlets. We sell our products primarily through our direct sales force, independent brokers, regional brokers and distributors.

35


We have an extensive production and supply chain footprint and we utilize ten manufacturing plants and also rely on third-party co-packers to fulfill our manufacturing needs in the U.S. In Europe, we have strategically positioned three plants in the United Kingdom, Belgium, and France, each supported by an integrated supply chain, and we also utilize third-party co-packers. Furthermore, we utilize a broad commercial partner network to access certain markets in Europe, in addition to our own sales organizations in the United Kingdom, Belgium, Germany, and the Netherlands.

Developments since January 1, 2015

Acquisition of EIEIO
On May 29, 2015, the Company acquired substantially all of the assets and liabilities of EIEIO, Inc. the company that owns the Magicow ("Magicow") brand and other brands for $40.2 million in cash. Magicow manufactures, markets and distributes bulk, bag-in-box and shelf stable creamers, coffee beverages and whip toppings. The acquisition of Magicow expands our portfolio of bulk coffee creamer and flavor dispensing products and provides new product capabilities to support growth in our away-from-home channel. Magicow's results of operations have been included in our condensed consolidated statements of income of our Americas Foods & Beverages segment from the date of acquisition. Net sales were $1.5 million from the acquisition date to June 30, 2015. We have not yet completed an appraisal of the assets acquired and anticipate finalizing the allocation of the purchase price to the assets acquired and liabilities assumed within one year of the purchase.

Acquisition of Vega
On August 1, 2015, we acquired Sequel Naturals Ltd, the company that owns the Vega brand ("Vega") and is a pioneer and leader in plant-based nutrition products, primarily powdered shakes and snack bars. This acquisition represents an opportunity for us to extend our plant-based foods and beverages platform into nutritional powders and bars, and pursue additional innovation opportunities. The total purchase price for the acquisition was approximately $550 million in cash funded by borrowings under our existing credit facility, subject to post-closing working capital adjustments and indemnification claims. In connection with the acquisition of Vega, we incurred $2.4 million in expenses for the three and six months ended June 30, 2015 related to due diligence, investment advisors and regulatory matters. Vega's performance will be included in the financial statements beginning in the third quarter of 2015. We have not yet completed an appraisal of the assets acquired and anticipate finalizing the allocation of the purchase price to the assets acquired and liabilities assumed within the next twelve months.

Factors Affecting Our Business and Results of Operations
The following trends have impacted our sales and operating income over the past two years and we believe that they will continue to be factors affecting our business and results of operations in the future:
Acquisitions and Joint Venture
We have grown and intend to continue to grow our business in part by acquiring new brands and businesses, and forming joint ventures, both in the United States and globally. The addition of acquisitions or joint ventures allows us to leverage our resources and capabilities but can also divert resources and management attention from our day-to-day operations as we integrate them into existing operations. In 2014, we completed the acquisitions of Earthbound Farm and So Delicious, and entered into a joint venture with China Mengniu Dairy Company Limited (“Mengniu”), a leading Chinese dairy company. In the second quarter of 2015 we completed the acquisition of Magicow and on August 1, 2015, we completed the Vega acquisition.
New Product Introductions
We intend to continue to respond to evolving consumer preferences by delivering innovative products. We have a proven track record of innovation through either creating or largely developing the organic milk, plant-based beverage, and flavored non-dairy creamer subcategories through successful product introductions under our Silk, Alpro, Horizon Organic, and International Delight brands. We continue to focus on innovation that we believe will drive increased consumption of our products.

Volatility in Commodity Costs

Our business is heavily dependent on raw materials and other inputs, such as organic and conventional raw milk, butterfat, almonds, organic and non-genetically modified (“non-GMO”) soybeans, sweeteners, organic salads, fruits and vegetables, and other commodity costs used in the manufacturing, packaging, and distribution of our products, including

36


utilities, natural gas, resin and diesel fuel. Changes in the costs of raw materials and other inputs historically impacted, and are expected to continue to impact our profitability. Increases in commodity costs have led, and in the future could lead, to price increases across our portfolio to mitigate the impacts of these increased costs.
Consumer Preferences for Nutritious, Flavorful, Convenient, and Responsibly Produced Products
The plant-based foods and beverages, coffee creamers and beverages, premium dairy, and organic greens and produce categories are aligned with emerging consumer preferences for products that are nutritious, flavorful, convenient, and responsibly produced. As a result, we believe these product categories will continue to offer attractive growth opportunities relative to traditional food and beverage categories. Our plant-based foods and beverages and premium dairy products are well positioned within the dairy and dairy alternatives sector, and together with our organic greens, are well positioned within the organic sector. The growth of the organic sector is outpacing the growth of the overall food and beverage industry. In addition, our coffee creamers and beverages continue to benefit from the growth and overall size of the creamers sector.
Manufacturing and Warehousing Capacity Constraints

Our volume growth has exerted and continues to exert pressure on our internal plant and warehousing capacity across all segments. In response, we have historically relied on our third-party network, which has resulted in higher costs for the production, distribution, and warehousing of our products. In addition, capacity constraints sometimes create the need for us to shift production between internal facilities, which increases overall shipping and warehousing costs. We have increased internal capacity and will continue to both shift production between internal facilities and utilize our co-packing network, as needed, to meet our production and warehousing requirements. At the same time, we have invested and expect to invest to expand our internal production and warehousing capabilities as growth requires.
Matters Affecting Comparability
Our results of operations for the three and six months ended June 30, 2015 and 2014 were affected by the following:
China Joint Venture
On January 5, 2014, the Company entered into a joint venture agreement with China Mengniu Dairy Company Limited (“Mengniu”), a leading Chinese dairy company. The joint venture manufactures, markets and sells a range of premium plant-based beverage products and other nutritious products in China. Under the terms of the agreement, the Company owns a 49% stake in the venture while Mengniu owns a 51% stake. While the joint venture agreement was signed in January, 2014, the joint venture did not commence operations until the 2014 second quarter, when it purchased and built out a production facility. The joint venture launched plant-based beverages in China under the Silk ZhiPuMoFang brand name in late December 2014. Products are now available in several major Chinese markets and include almondmilk and walnut milk beverages available in both single-serve and multi-pack formats. The joint venture expects to continue investing in brand building and marketing behind the launch of these beverages in 2015.

Acquisitions of So Delicious and EIEIO
On October 31, 2014, the Company acquired the company that owns So Delicious Dairy Free ("So Delicious") from its existing shareholders. The acquisition of So Delicious expanded our portfolio of plant-based food and beverage products and provided the Company with an entry into the growing, plant-based frozen dessert category. The total purchase price for the acquisition was approximately $196.6 million in cash, subject to post-closing working capital adjustments and indemnification claims. Certain estimated values for the So Delicious acquisition are not yet finalized pending the final purchase price allocations and are subject to change as additional information is obtained. We expect to finalize the allocation of the purchase price in 2015. The expenses directly associated with the acquisition were recorded in general and administrative expenses in our consolidated statements of income and were not allocated to our segments and are reflected entirely within corporate and other. So Delicious is reported within the Americas Foods & Beverages segment.
On May 29, 2015, the Company acquired substantially all the assets and liabilities of EIEIO, Inc. which owns the Magicow ("Magicow") brand as well as smaller brands in the food service toppings business. Magicow which is based outside Austin, Texas, manufactures, markets and distributes bulk, bag-in-box and shelf stable creamers, coffee beverages and whip toppings.  The acquisition of Magicow expands our portfolio of bulk coffee creamer and flavor dispensing products and provides new product capabilities to support growth in our away-from-home channel. The total purchase price for the acquisition was approximately $40.2 million in cash. Certain estimated values for the acquisition are not yet finalized pending the final purchase price allocations. We expect to finalize the allocation of the purchase price within one year of the acquisition

37


date. In connection with the acquisition of Magicow, we incurred $0.3 million in expenses for the three and six months ended June 30, 2015 related to due diligence, investment advisors and regulatory matters. The expenses directly associated with the acquisition were recorded in general and administrative expenses in our condensed consolidated statements of income and were not allocated to our segments and are reflected entirely within corporate and other. Magicow is reported within the Americas Foods & Beverages segment.
Foreign Exchange Movements
Due to the international aspect of our business, our net sales and expenses are influenced by foreign exchange movements. Our exposures to foreign exchange rates are the Euro, the British Pound, the Canadian dollar, the Mexican peso, and the Chinese RMB against the U.S. dollar. The financial statements of our Europe Foods & Beverages segment are translated to U.S. dollars. The functional currency of our foreign subsidiaries is generally the local currency of the country of our subsidiary. Accordingly, income and expense items are translated at the average rates prevailing during the period. Changes in exchange rates that affect cash flows and the related receivables or payables are recognized as transaction gains and losses.
Results of Operations
The following table presents, for the periods indicated, selected information from our consolidated financial results, including information presented as a percentage of net sales:
 
 
Three months ended June 30,
 
Six months ended June 30,
 
2015
 
2014
 
2015
 
2014
 
Dollars
 
Percent
 
Dollars
 
Percent
 
Dollars
 
Percent
 
Dollars
 
Percent
 
(Dollars in millions)
Total net sales
$
923.6

 
100.0
%
 
$
837.9

 
100.0
 %
 
$
1,834.8

 
100.0
%
 
$
1,668.1

 
100.0
 %
Cost of goods sold
597.5

 
64.7
%
 
552.7

 
66.0
 %
 
1,200.0

 
65.4
%
 
1,109.7

 
66.5
 %
Gross profit (1)
326.1

 
35.3
%
 
285.2

 
34.0
 %
 
634.8

 
34.6
%
 
558.4

 
33.5
 %
Operating expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Selling, distribution, and marketing
174.3

 
18.9
%
 
156.9

 
18.7
 %
 
342.1

 
18.6
%
 
304.3

 
18.2
 %
General and administrative
74.8

 
8.1
%
 
61.6

 
7.4
 %
 
145.6

 
7.9
%
 
133.9

 
8.0
 %
Asset disposal and exit costs

 
0.0
%
 
(0.1
)
 
0.0
 %
 

 
0.0
%
 
(0.7
)
 
0.0
 %
Total operating expenses
249.2

 
27.0
%
 
218.4

 
26.1
 %
 
487.7

 
26.5
%
 
437.5

 
26.2
 %
Operating income
77.0

 
8.3
%
 
66.8

 
7.9
 %
 
147.1

 
8.1
%
 
120.9

 
7.3
 %
Interest and other expenses, net
14.9

 
 
 
11.1

 
 
 
27.4

 
 
 
17.6

 
 
Income tax expense
22.2

 
 
 
20.8

 
 
 
42.4

 
 
 
36.0

 
 
Loss in equity method investments
2.4

 
 
 
0.5

 
 
 
6.5

 
 
 
0.5

 
 
Net income
$
37.4

 
 
 
$
34.4

 
 
 
$
70.8

 
 
 
$
66.8

 
 
 
(1)
We include certain shipping and handling costs within selling, distribution, and marketing expense. As a result, our gross profit may not be comparable to other companies that present all shipping and handling costs as a component of cost of goods sold.
The key performance indicators for our reportable segments are net sales and operating income, which are presented in the segment results tables and discussion below.

Three Months Ended June 30, 2015 Compared to Three Months Ended June 30, 2014
Consolidated Results
Total net sales — Total net sales by segment are shown in the table below:

38


 
 
Three months ended June 30,
 
2015
 
2014
 
$ Increase / (Decrease)
 
% Increase / (Decrease)
 
(Dollars in millions)
Americas Foods & Beverages
$
639.8

 
$
556.5

 
$
83.3

 
15.0
 %
Americas Fresh Foods
151.2

 
153.0

 
(1.8
)
 
(1.2
)%
Europe Foods & Beverages
132.6

 
128.4

 
4.2

 
3.3
 %
Total
$
923.6

 
$
837.9

 
$
85.7

 
10.2
 %
The changes in total net sales were due to the following:
 
 
Change in net sales
Three months ended June 30, 2015 vs. June 30, 2014
 
Acquisition
 
Volume
 
Pricing, product mix and currency changes
 
Total increase / (decrease)
 
(in millions)
Americas Foods & Beverages
$
41.0

 
$
21.7

 
$
20.6

 
$
83.3

Americas Fresh Foods

 
3.2

 
(5.0
)
 
(1.8
)
Europe Foods & Beverages

 
30.7

 
(26.5
)
 
4.2

Total
$
41.0

 
$
55.6

 
$
(10.9
)
 
$
85.7

Total net sales — Consolidated total net sales increased $85.7 million, or 10.2%, for the three months ended June 30, 2015 compared to the same period in 2014. This increase was principally driven by volume growth in both the Americas Foods & Beverages and the Europe Foods & Beverages segments. In addition, net sales in the quarter benefited from the addition of So Delicious which was acquired on October 31, 2014, and, to a much lesser extent, Magicow, which was acquired on May 29, 2015. These acquisitions contributed 4.9 percentage points of growth. These increases were partially offset by an unfavorable currency impact of 3.4 percentage points in the quarter, primarily driven by the strengthening U.S. dollar compared to the Euro. 
Cost of goods sold — Cost of goods sold increased $44.8 million, or 8.1%, for the three months ended June 30, 2015 compared to the same period in 2014. This increase was principally driven by higher sales volumes including the impact of acquisitions, partially offset by a cost reduction of $15.5 million due to currency translation.
Gross profit — Gross profit margin increased to 35.3% for the three months ended June 30, 2015 from 34.0% for the same period in 2014 as growth in our higher-margin segments (Americas Foods & Beverages and Europe Foods & Beverages) outpaced the growth of Americas Fresh Foods, which has a lower gross margin. In addition, each of our segments separately delivered gross margin improvement in the current quarter compared to the same period in 2014.
Operating expenses — Total operating expenses increased $30.8 million, or 14.1%, for the three months ended June 30, 2015 compared to the same period in 2014. The overall increase in operating expenses was partially offset by the impact of currency translation.
Selling, distribution, and marketing expense increased $17.4 million for the three months ended June 30, 2015. This increase was driven primarily by volume-driven increases in distribution expense, including the impact of acquisitions, along with higher marketing spending.

General and administrative expense increased $13.2 million for the three months ended June 30, 2015, driven by higher employee related costs, including the impact of higher headcount and long-term incentive compensation. In addition, we incurred $2.7 million of expense associated with the acquisitions of Magicow and Vega as well as $2.4 million of costs associated with the integration of So Delicious and Earthbound Farm in the three months ended June 30, 2015 compared $0.1 million of expense associated with the acquisition of Earthbound Farm in the three months ended June 30, 2014.
Interest and other expenses, net — Interest and other expenses, net for the three months ended June 30, 2015 increased $3.8 million compared to the same period in 2014. The increase was driven by higher levels of debt outstanding in 2015, primarily due to the acquisition of So Delicious in the fourth quarter of 2014 and increased levels of capital investments. In

39


addition, we incurred a higher weighted average interest rate on our indebtedness in 2015 due to the issuance of $500.0 million senior unsecured notes on September 17, 2014. In the second quarter of 2015, we incurred a loss of $1.0 million related to mark-to-market losses on our interest rate swaps, compared to a loss of $3.6 million for the same period on 2014.
Income tax expense — The effective tax rate for the three months ended June 30, 2015 was 35.8% compared to 37.3% for the three months ended June 30, 2014. The decrease in the effective tax rate for the three month period was primarily due to nondeductible transaction costs incurred in the second quarter 2014. Changes in the relative profitability of our operating segments, as well as changes to federal, state and foreign tax laws may cause the rate to change from historical rates.
Loss in equity method investments — Our share of the loss related to the China joint venture was $2.2 million in the three months ended June 30, 2015 compared to $0.5 million in the three months ended June 30, 2014. This increase was due to the China joint venture beginning operations in late 2014. Our share of the loss related to our other equity investment was $0.2 million for the three months ended June 30, 2015.

Americas Foods & Beverages Segment Results
The following table presents certain financial information concerning our Americas Foods & Beverages segment’s results: 
 
Three months ended June 30,
 
2015
 
2014
 
 
 
 
 
Dollars
 
Percent
 
Dollars
 
Percent
 
$ Change
 
% Change
 
(Dollars in millions)
 
 
 
 
Total net sales
$
639.8

 
100.0
%
 
$
556.5

 
100.0
%
 
$
83.3

 
15.0
%
Cost of goods sold
402.8

 
63.0
%
 
355.7

 
63.9
%
 
47.1

 
13.2
%
Gross profit
237.0

 
37.0
%
 
200.8

 
36.1
%
 
36.2

 
18.0
%
Operating expenses
162.6

 
25.4
%
 
140.8

 
25.3
%
 
21.8

 
15.5
%
Operating income
$
74.4

 
11.6
%
 
$
60.0

 
10.8
%
 
$
14.4

 
24.0
%
Total net sales — Total net sales increased $83.3 million, or 15.0%, for the three months ended June 30, 2015 compared to the same period in 2014. This increase was driven by a combination of volume growth and higher pricing, along with the acquisitions of So Delicious and Magicow which contributed $41.0 million in net sales in the quarter. These increases were offset by a modest impact of currency translation, driven by the strengthening of the U.S. dollar compared to the Canadian dollar and the Mexican peso.
Net sales in the plant-based foods and beverages platform increased 25.8%, benefiting significantly from the acquisition of So Delicious. Net sales also continue to benefit from growth in our nut-based beverages, including almondmilk and cashewmilk products which collectively increased net sales by $12.3 million in the quarter. These increases were partially offset by a $4.2 million decline in soymilk products.

Net sales growth in the coffee creamers and beverages platform increased 6.4%. This topline performance was driven by higher volumes and the impact of price increases implemented on our dairy-based creamers in 2014, along with the addition of So Delicious creamers. The shift of a majority of the Easter selling season into the first quarter of 2015 had approximately a 2 percentage point unfavorable impact on our net sales growth rate for the three months ended June 30, 2015 compared to the same period in 2014.

Our premium dairy brand platform sales growth of 15.3% was driven by higher pricing as we have taken several pricing actions over the past year to offset the rising costs of organic milk. Net sales in this platform also continue to benefit from growth in our Horizon center store products, consisting of macaroni and cheese and other snack products, along with growth in our other dairy products such as cheese.
Cost of goods sold — Cost of goods sold increased $47.1 million, or 13.2%, for the three months ended June 30, 2015 compared to the same period in 2014. This increase was driven by the impact of the So Delicious acquisition, along with volume increases in the Company’s historical platforms and higher commodity costs, particularly almonds and organic dairy inputs.

40


Gross profit — Gross profit margin increased 90 basis points to 37.0% for the three months ended June 30, 2015. The increase was driven by a favorable mix of products sold, partially offset by the impact of a strengthening U.S. dollar relative to the Canadian dollar, which reduced gross margins by approximately 40 basis points.
Operating expenses — Operating expenses increased $21.8 million, or 15.5%, for the three months ended June 30, 2015 compared to the same period in 2014. This increase was principally due to the So Delicious acquisition but was also driven by increased marketing investments in support of our brands, higher distribution costs linked to growth in sales volumes, and higher employee related costs.
Americas Fresh Foods Segment Results
The following table presents certain financial information concerning our Americas Fresh Foods segment’s results: 
 
Three months ended June 30,
 
2015
 
2014
 
 
 
 
 
Dollars
 
Percent
 
Dollars
 
Percent
 
$ Change
 
% Change
 
(Dollars in millions)
 
 
 
 
Total net sales
$
151.2

 
100.0
%
 
$
153.0

 
100.0
%
 
$
(1.8
)
 
(1.2
)%
Cost of goods sold
120.8

 
79.9
%
 
124.1

 
81.1
%
 
(3.3
)
 
(2.7
)%
Gross profit
30.4

 
20.1
%
 
28.9

 
18.9
%
 
1.5

 
5.2
 %
Operating expenses
15.6

 
10.3
%
 
14.9

 
9.7
%
 
0.7

 
4.7
 %
Operating income
$
14.8

 
9.8
%
 
$
14.0

 
9.2
%
 
$
0.8

 
5.7
 %
Total net sales — Total net sales were $151.2 million for the three months ended June 30, 2015 compared to $153.0 million for the same period in 2014. The decrease in net sales was driven by a 46% decline in sales of fresh fruit due to lower supply availability, coupled with the decision to exit lower-margin supply agreements with certain third party fruit suppliers. Net sales of organic salads increased approximately 6% in the second quarter of 2015, compared to the same quarter in the prior year, as we continue to recover from the weather-related supply constraints experienced in the first quarter of 2015.

Cost of goods sold — Cost of goods sold declined 2.7% for the three months ended June 30, 2015, driven principally by a more favorable mix of products sold, along with the benefit from our cost reduction initiatives that have improved operating efficiencies in our plant and farm operations.
Gross profit — Gross profit margin increased to 20.1% for the three months ended June 30, 2015 compared to 18.9% for the same period in 2014. Margins benefited from a favorable mix of products sold, along with the impact of cost reduction initiatives.
Operating expenses — Operating expense increased $0.7 million, or 4.7% for the three months ended June 30, 2015, compared to the same period in 2014. The increase was principally driven by higher general and administrative costs as we continue to invest in capability building, including an expected transition of this segment to the Company’s SAP systems.

Europe Foods & Beverages Segment Results
The following table presents certain financial information concerning our Europe Foods & Beverages segment’s results:
 
 
Three months ended June 30,
 
2015
 
2014
 
 
 
 
 
Dollars
 
Percent
 
Dollars
 
Percent
 
$ Change
 
% Change
 
(Dollars in millions)
 
 
 
 
Net sales
$
132.6

 
100.0
%
 
$
128.4

 
100.0
%
 
$
4.2

 
3.3
%
Cost of goods sold
73.8

 
55.7
%
 
72.9

 
56.8
%
 
0.9

 
1.2
%
Gross profit
58.8

 
44.3
%
 
55.5

 
43.2
%
 
3.3

 
5.9
%
Operating expenses
42.1

 
31.7
%
 
41.5

 
32.3
%
 
0.6

 
1.4
%
Operating income
$
16.7

 
12.6
%
 
$
14.0

 
10.9
%
 
$
2.7

 
19.3
%

41


Net sales — Net sales increased $4.2 million, or 3.3%, for the three months ended June 30, 2015 compared to the same period in 2014. The increase was driven principally by continued strong volume growth, led by almond beverages and, to a lesser extent, soy beverages, as well as strong growth in our plant-based yogurts and creams, offset by unfavorable foreign currency translation, which reduced growth by 19.6 percentage points. Volume growth continues to be broad-based across our key European markets.
Cost of goods sold — Cost of goods sold increased $0.9 million, or 1.2%, for the three months ended June 30, 2015 compared to the same period in 2014 driven by higher sales volumes, substantially offset by the impact of foreign currency translation of $16.7 million. Manufacturing and warehousing costs also increased as our internal capacity continues to be somewhat constrained by our strong volume growth which has caused us to increase our utilization of third-party co-manufacturers and warehouses. We expect to continue to increase our utilization of such third parties, while we invest to expand our internal manufacturing and warehousing capabilities.
Gross profit — Gross profit margin increased to 44.3% for the three months ended June 30, 2015 compared to 43.2% for the same period in 2014. This increase was driven by a favorable foreign currency dynamic, which more than offset higher manufacturing and warehousing costs.
Operating expenses — Operating expenses increased $0.6 million, or 1.4%, for the three months ended June 30, 2015 compared to the same period in 2014. The increase was driven by higher marketing investments to support branded growth, along with higher employee related costs, primarily related to additional headcount. In addition, we experienced an increase in distribution costs driven by our volume growth and higher utilization of third party co-manufacturers. These increases were partially offset by the impact of foreign currency translation of $8.5 million. For the three months ended June 30, 2015, we incurred $1.6 million of transition costs related to So Delicious.

Six Months Ended June 30, 2015 Compared to Six Months Ended June 30, 2014
Consolidated Results
Total net sales — Total net sales by segment are shown in the table below:
 
 
Six months ended June 30,
 
2015
 
2014
 
$ Increase / (Decrease)
 
% Increase / (Decrease)
 
(Dollars in millions)
Americas Foods & Beverages
$
1,280.5

 
$
1,115.0

 
$
165.5

 
14.8
 %
Americas Fresh Foods
290.9

 
299.1

 
(8.2
)
 
(2.7
)%
Europe Foods & Beverages
263.4

 
254.0

 
9.4

 
3.7
 %
Total
$
1,834.8

 
$
1,668.1

 
$
166.7

 
10.0
 %
The changes in total net sales were due to the following:
 
 
Change in net sales
Six months ended June 30, 2015 vs. June 30, 2014
 
Acquisition
 
Volume
 
Pricing, product mix and currency changes
 
Total increase / (decrease)
 
(in millions)
Americas Foods & Beverages
$
66.1

 
$
63.9

 
$
35.5

 
$
165.5

Americas Fresh Foods

 
(0.4
)
 
(7.8
)
 
(8.2
)
Europe Foods & Beverages

 
61.5

 
(52.1
)
 
9.4

Total
$
66.1

 
$
125.0

 
$
(24.4
)
 
$
166.7

Total net sales — Consolidated total net sales increased $166.7 million, or 10.0%, for the six months ended June 30, 2015 compared to the same period in 2014. This increase was principally driven by volume growth in both the Americas Foods & Beverages and the Europe Foods & Beverages segments. In addition, net sales in 2015 benefited from the acquisitions of So Delicious on October 31, 2014 and, to a lesser extent, the acquisition of Magicow on May 29, 2015. These acquisitions

42


contributed 4.0 percentage points of growth. These increases were partially offset by an unfavorable currency impact of 3.2 percentage points, primarily driven by the strengthening U.S. dollar compared to the Euro.
Cost of goods sold — Cost of goods sold increased $90.3 million, or 8.1%, for the six months ended June 30, 2015 compared to the same period in 2014. This increase was principally driven by higher sales volumes including the impact of acquisitions, partially offset by the impact of approximately $32.4 million of foreign currency translation.
Gross profit — Gross profit margin increased to 34.6% for the six months ended June 30, 2015 from 33.5% for the same period in 2014 as growth in our higher-margin segments (Americas Foods & Beverages and Europe Foods & Beverages) outpaced the growth of Americas Fresh Foods, which has a lower gross margins. In addition, each of our segments separately delivered gross margin improvement for the six months ended June 30, 2015 compared to the same period in 2014.
Operating expenses — Total operating expenses increased $50.2 million, or 11.5%, for the six months ended June 30, 2015 compared to the same period in 2014. The overall increase in operating expenses was partially offset by the impact of currency translation.
Selling, distribution, and marketing expense increased $37.8 million for the six months ended June 30, 2015. This increase was driven primarily by volume-driven increases in distribution expense, including the impact of acquisitions, along with higher marketing spending in the Americas Foods & Beverages and the Europe Foods & Beverages segments.

General and administrative expense increased $11.7 million for the six months ended June 30, 2015 related to higher employee related costs including incentive based compensation. In addition, we incurred $4.8 million of expenses associated with the integration of So Delicious and Earthbound Farm, along with $2.7 million of expense related to the acquisitions of Magicow and Vega in the six months ended June 30, 2015 compared to $8.5 million of expense associated primarily with the acquisition of Earthbound Farm in the same period in 2014. Further we incurred $1.6 million of corporate expense related to management of our joint venture investment in China in the six months ended June 30, 2015 compared to $3.0 million in the same period of 2014.
Interest and other expenses, net — Interest and other expenses, net for the six months ended June 30, 2015 increased $9.8 million compared to the same period in 2014. The increase was driven by higher levels of debt outstanding in 2015, primarily due to the acquisition of So Delicious in the fourth quarter of 2014 and increased levels of capital investments. In addition, we incurred a higher weighted average interest rate on our indebtedness in 2015 due to the issuance of $500.0 million senior unsecured notes on September 17, 2014. For the six months ended June 30, 2015, we incurred a loss of $4.8 million related to mark-to-market losses on our interest rate swaps, compared to a loss of $4.4 million for the same period on 2014. These increases were partially offset by a $3.4 million increase in annual interest rebates we received in 2015 on certain loans outstanding, as compared to the prior year.
Income tax expense — The effective tax rate for the six months ended June 30, 2015 was 35.4% compared to 34.9% for the six months ended June 30, 2014. The increase in the effective tax rate was primarily due to a reduction in our deferred tax liabilities recognized in 2014 as a result of lower state apportionment driven by the sale of the Idaho dairy farm. Changes in the relative profitability of our operating segments, as well as changes to federal, state and foreign tax laws may cause the rate to change from historical rates.
Loss in equity method investments — Our share of the loss related to the China joint venture was $6.2 million for the six months ended June 30, 2015 compared to $0.5 million in the same period in the prior year. This increase was due to the China joint venture beginning operations in late 2014. Our share of the loss related to our other equity investment was $0.3 million for the six months ended June 30, 2015, compared to nil in the same period in the prior year.

Americas Foods & Beverages Segment Results
The following table presents certain financial information concerning our Americas Foods & Beverages segment’s results: 

43


 
Six months ended June 30,
 
2015
 
2014
 
 
 
 
 
Dollars
 
Percent
 
Dollars
 
Percent
 
$ Change
 
% Change
 
(Dollars in millions)
 
 
 
 
Total net sales
$
1,280.5

 
100.0
%
 
$
1,115.0

 
100.0
%
 
$
165.5

 
14.8
%
Cost of goods sold
813.7

 
63.5
%
 
715.0

 
64.1
%
 
98.7

 
13.8
%
Gross profit
466.8

 
36.5
%
 
400.0

 
35.9
%
 
66.8

 
16.7
%
Operating expenses
318.5

 
24.9
%
 
274.0

 
24.6
%
 
44.5

 
16.2
%
Operating income
$
148.3

 
11.6
%
 
$
126.0

 
11.3
%
 
$
22.3

 
17.7
%
Total net sales — Total net sales increased $165.5 million, or 14.8%, for the six months ended June 30, 2015 compared to the same period in 2014. This increase was driven by a combination of volume growth and higher pricing, along with acquisitions of So Delicious and Magicow, which contributed $66.1 million in net sales for the six months ended June 30, 2015. These increases were offset by a modest impact of currency translation, driven by the strengthening of the U.S. dollar compared to the Canadian dollar and the Mexican peso.
Net sales in the plant-based foods and beverages platform increased 23.1%, benefiting significantly from the acquisition of So Delicious. Net sales also continue to benefit from growth in our nut-based beverages, including almondmilk and cashewmilk products, which collectively increased net sales by $33.5 million for the six months ended June 30, 2015. These increases were partially offset by a decline in soymilk products which reduced sales by $11.2 million.

Net sales in the coffee creamers and beverages platform increased 8.5%. This topline performance was driven by higher volumes and the impact of price increases implemented on our dairy-based creamers in 2014, along with the addition of So Delicious creamers.
Our premium dairy brand platform sales growth of 15.1% was principally driven by higher pricing as we have taken several pricing actions over the past year to offset the impact of the rising costs of organic milk. Volume also contributed to our total sales growth including contribution from our Horizon center store products, which consist of macaroni and cheese and other snack products, as well as growth in our other dairy products such as cheese and butter.
Cost of goods sold — Cost of goods sold increased $98.7 million, or 13.8%, for the six months ended June 30, 2015 compared to the same period in 2014. This increase was driven by the impact of the So Delicious acquisition, along with volume increases in the Company’s historical platforms and higher commodity costs, particularly almonds and organic dairy inputs.
Gross profit — Gross profit margin increased 60 basis points to 36.5% for the six months ended June 30, 2015. The increase was driven by a favorable product mix, partially offset by the impact of a strengthening U.S. dollar relative to the Canadian dollar, which reduced gross margin by 20 basis points.
Operating expenses — Operating expenses increased $44.5 million, or 16.2%, for the six months ended June 30, 2015 compared to the same period in 2014. This increase was principally due to the So Delicious acquisition but was also driven by increased marketing investments in support of our brands, higher distribution costs linked to growth in sales volumes, and higher employee related costs. For the first six months of 2015, we incurred $3.3 million of transition costs related to So Delicious.
Americas Fresh Foods Segment Results
The following table presents certain financial information concerning our Americas Fresh Foods segment’s results: 

44


 
Six months ended June 30,
 
2015
 
2014
 
 
 
 
 
Dollars
 
Percent
 
Dollars
 
Percent
 
$ Change
 
% Change
 
(Dollars in millions)
 
 
 
 
Total net sales
$
290.9

 
100.0
%
 
$
299.1

 
100.0
%
 
$
(8.2
)
 
(2.7
)%
Cost of goods sold
238.0

 
81.8
%
 
248.0

 
82.9
%
 
(10.0
)
 
(4.0
)%
Gross profit
52.9

 
18.2
%
 
51.1

 
17.1
%
 
1.8

 
3.5
 %
Operating expenses
30.3

 
10.4
%
 
28.5

 
9.5
%
 
1.8

 
6.3
 %
Operating income
$
22.6

 
7.8
%
 
$
22.6

 
7.6
%
 
$

 
 %
Total net sales — Total net sales decreased $8.2 million or 2.7% for the six months ended June 30, 2015 compared to the same period in 2014. The decrease in net sales was driven by a 44.0% decline in sales of fresh principally due to lower supply availability, coupled with the decision to exit low-margin supply agreements with certain third party fruit suppliers. Net sales of organic salads increased approximately 3.0% for the six months ended June 30, 2015, compared to the same period in the prior year, despite unfavorable weather conditions that impacted the supply of organic leafy greens.

Cost of goods sold — Cost of goods sold declined $10.0 million or 4.0% for the six months ended June 30, 2015, driven principally by a favorable mix of products sold, along with the benefit of cost reduction initiatives that have improved operating efficiencies in our plant and farm operations.
Gross profit — Gross profit margin increased to 18.2% for the six months ended June 30, 2015 compared to 17.1% for the same period in 2014. Margins benefited from a favorable mix of products sold along with the benefit of our cost reduction initiatives.
Operating expenses — Operating expense increased $1.8 million, or 6.3% for the six months ended June 30, 2015, compared to the same period in 2014. The increase was principally driven by higher marketing expenses and higher general and administrative costs as we continue to invest in capability building, including plans to transition this segment to the Company's SAP systems.

Europe Foods & Beverages Segment Results
The following table presents certain financial information concerning our Europe Foods & Beverages segment’s results:
 
 
Six months ended June 30,
 
2015
 
2014
 
 
 
 
 
Dollars
 
Percent
 
Dollars
 
Percent
 
$ Change
 
% Change
 
(Dollars in millions)
 
 
 
 
Net sales
$
263.4

 
100.0
%
 
$
254.0

 
100.0
%
 
$
9.4

 
3.7
%
Cost of goods sold
148.4

 
56.3
%
 
146.8

 
57.8
%
 
1.6

 
1.1
%
Gross profit
115.0

 
43.7
%
 
107.2

 
42.2
%
 
7.8

 
7.3
%
Operating expenses
83.9

 
31.9
%
 
82.8

 
32.6
%
 
1.1

 
1.3
%
Operating income
$
31.1

 
11.8
%
 
$
24.4

 
9.6
%
 
$
6.7

 
27.5
%
Net sales — Net sales increased $9.4 million, or 3.7%, for the six months ended June 30, 2015 compared to the same period in 2014. The increase was driven principally by continued strong volume growth, led by almond beverages and, to a lesser extent, soy beverages, as well as strong growth in our plant-based yogurts and creams, offset by unfavorable foreign currency translation, which reduced growth by 19.2 percentage points. Volume growth continues to be broad-based across our European markets.
Cost of goods sold — Cost of goods sold increased $1.6 million, or 1.1%, for the six months ended June 30, 2015 compared to the same period in 2014 driven by higher sales volumes, substantially offset by the impact of foreign currency translation. Foreign currency translation reduced cost of goods sold by $32.4 million. Manufacturing and warehousing costs also increased as our internal capacity continues to be somewhat constrained by our strong volume growth which has caused us to increase our utilization of third-party co-manufacturers and warehouses. We expect to continue to increase our utilization of such third parties, while we invest to expand our internal manufacturing and warehousing capabilities.

45


Gross profit — Gross profit margin increased to 43.7% for the six months ended June 30, 2015 compared to 42.2% for the same period in 2014. This increase was driven by a favorable foreign currency dynamic, more than offsetting higher production and warehouse costs.
Operating expenses — Operating expenses increased $1.1 million, or 1.3%, for the six months ended June 30, 2015 compared to the same period in 2014. The increase was driven by higher marketing investments to support branded growth, along with higher employee related costs, primarily related to additional headcount. In addition, we experienced an increase in distribution costs driven by our volume growth and higher utilization of third party co-manufacturers. These increases were partially offset by the impact of foreign currency translation which decreased operating expenses by $16.7 million.
Liquidity and Capital Resources
Debt Facilities

As of August 3, 2015, primarily due to the incurrence of an additional $557.6 million in indebtedness related to the closing of the Vega acquisition, we had outstanding borrowings of $1.6 billion under our $2.0 billion senior secured credit facilities, which consisted of $985.0 million of term loan borrowings and $601.1 million borrowed under our $1.0 billion revolving credit facility commitment.  We further had $5.9 million in outstanding letters of credit issued under our revolving credit facility.  We had the ability to incur up to a maximum of $361.8 million of additional indebtedness as governed by the current financial covenants under our senior secured credit facility, assuming such proceeds are not utilized to acquire additional businesses or operations.

          The senior secured credit facilities are secured by security interests and liens on substantially all of our assets and the assets of our domestic subsidiaries. The senior secured credit facilities are guaranteed by our material domestic subsidiaries. As of August 3, 2015, borrowings under our senior secured credit facilities bore interest at a rate of LIBOR plus 1.75% per annum for the $1.0 billion revolving commitment and the $240.6 million currently outstanding on the term loan A-1 facility and LIBOR plus 2.00% per annum for the $744.4 million currently outstanding on the term loan A-2 facility.
Alpro maintained a revolving credit facility not to exceed €20.0 million ($22.2 million USD) or its currency equivalent up until June 29, 2015. On June 29, 2015, Alpro entered into a new revolving credit facility not to exceed €30.0 million ($33.3 million USD) or its currency equivalent. The facility is unsecured and guaranteed by The WhiteWave Foods Company.
The Alpro revolving credit facility is available for working capital and other general corporate purposes of Alpro and for the issuance of up to €30.0 million letters of credit ($33.3 million USD) or its currency equivalent. At June 30, 2015 and December 31, 2014, there were no outstanding borrowings under these facilities. Principal payments, if any, are due under the subsidiary revolving credit facility upon maturity on June 29, 2016.
As of June 30, 2015, we were in compliance with all related (or associated) covenants under our debt facilities.

Liquidity
Based on current and anticipated level of operations, we believe that our cash on hand, together with operating cash flows, and amounts expected to be available under our senior secured credit facilities, will be sufficient to meet our anticipated liquidity needs over the next twelve months. Our anticipated uses of cash include capital expenditures, working capital needs, other general corporate purposes, and financial obligations such as payments under the senior secured credit facility. In addition, we also evaluate and consider strategic acquisitions, divestitures, joint ventures, and stock repurchases, as well as other transactions to create stockholder value and enhance financial performance. Such transactions may require cash expenditures by us or generate proceeds for us. In connection with such transactions, or to fund other anticipated uses of cash, we may modify our senior secured credit facilities, seek additional debt financing or issue equity securities.
As of June 30, 2015, $25.4 million of our total cash on hand of $27.4 million was attributable to our foreign operations and currently domiciled outside the U.S. We anticipate permanently reinvesting our foreign earnings outside the U.S.
Capital Resources
Our board of directors has authorized a share repurchase program, under which the Company may repurchase up to $150.0 million of its common stock. The primary purpose of the program is to offset dilution from the Company’s equity compensation plans, but the Company also may make discretionary purchases. Shares may be repurchased under the program from time to time in one or more open market or other transactions, at the discretion of the Company, subject to market

46


conditions and other factors. The authorization to repurchase shares will end when the Company has repurchased the maximum amount of shares authorized, or the Company’s Board of Directors has determined to discontinue such repurchases. To date, no shares have been repurchased under the share repurchase program.
Historical Cash Flow
The following table summarizes our cash flows from operating, investing, and financing activities:
 
 
Six months ended June 30,
 
2015
 
2014
 
Change
 
(In millions)
Net cash flows from:
 
 
 
 
 
Operating activities
$
106.9

 
$
117.7

 
$
(10.8
)
Investing activities
(170.8
)
 
(790.4
)
 
619.6

Financing activities
45.0

 
636.9

 
(591.9
)
Effect of exchange rate changes on cash and cash equivalents
(3.9
)
 
0.6

 
(4.5
)
Net increase in cash and cash equivalents
$
(22.8
)
 
$
(35.2
)
 
$
12.4

Operating Activities
Net cash provided by operating activities was $106.9 million for the six months ended June 30, 2015 compared to $117.7 million for the six months ended June 30, 2015. The lower level of cash provided from operating activities in 2015 was driven by an increase in operating assets and liabilities that more than offset the higher level of net income, excluding depreciation, amortization, and share-based compensation. The higher net change in operating assets and liabilities was largely driven by growth in accounts receivable, related to timing of collections, and higher inventory levels in 2015 due to the addition of So Delicious and tighter manufacturing capacity in 2014 that limited inventory levels somewhat in the prior year. The impact of the accounts receivable change was $22.6 million, while the inventory impact was $34.2 million.
Investing Activities
Net cash used in investing activities was $170.8 million for the six months ended June 30, 2015 compared to net cash used in investing activities of $790.4 million for the six months ended June 30, 2014. The change was primarily driven by increase in payments for acquisitions as the prior year included the acquisition of Earthbound Farm. In addition, we contributed $47.3 million to the joint venture in China in 2014. Payments for property, plant, and equipment were comparable in both 2015 and 2014 as we continue to invest in manufacturing and warehousing capability to support our volume growth.

Financing Activities
Net cash provided by financing activities was $45.0 million for the six months ended June 30, 2015 compared to net cash provided of $636.9 million for the six months ended June 30, 2015. The decrease was driven by the impact of new borrowings in 2014 utilized to finance a higher level of acquisitions, principally Earthbound Farm.
Contractual Obligations and Other Long-Term Liabilities
There have been no material changes in the information provided in Item 7-Management’s Discussion and Analysis of Financial Condition and Results of Operations – “Contractual Obligations and Other Long-Term Liabilities” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2014.
Off-Balance Sheet Arrangements
As of June 30, 2015, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4) of Regulation S-K.
Critical Accounting Policies
The process of preparing our consolidated financial statements in conformity with generally accepted accounting principles requires the use of estimates and judgments that affect the reported amounts of assets, liabilities, revenue, and

47


expenses. These estimates and judgments are based on historical experience, future expectations, and other factors and assumptions we believe to be reasonable under the circumstances. The most significant estimates and judgments are reviewed on an ongoing basis and revised when necessary. Actual results may differ materially from these estimates. We have identified the following policies as critical accounting policies:
 
Goodwill and Intangible Assets, Purchase Price Allocation;
Revenue Recognition, Sales Incentives, and Trade Accounts Receivable;
Share-Based Compensation;
Property, Plant, and Equipment; and
Income Taxes.
These critical accounting policies are discussed in more detail in our Annual Report on Form 10-K for the fiscal year ended December 31, 2014.
Recent Accounting Pronouncements

For information regarding recent accounting pronouncements, see Note 1 to the unaudited condensed consolidated financial statements within Item 1 of this report on Form 10-Q.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
There were no material changes in the Quantitative and Qualitative Disclosures About Market Risk disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2014.
Item 4. Controls and Procedures
 
(a)
Disclosure Controls and Procedures
Our Chief Executive Officer and Chief Financial Officer, with assistance from other members of management, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Quarterly Report on Form 10-Q (the “Evaluation Date”) and, based upon such evaluation, have concluded that as of the Evaluation Date, the Company’s disclosure controls and procedures were effective.
 
(b)
Changes in Internal Control over Financial Reporting
There has been no change in the Company’s internal control over financial reporting during the quarter ended June 30, 2015 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
Part II — Other Information
Item 1. Legal Proceedings
None.
Item 1A. Risk Factors

There have been no material changes from the risk factors disclosed in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2014.
Item 2C. Issuer Purchases of Equity Securities
On May 23, 2013, the Company announced that its Board of Directors had authorized a share repurchase program, under which the Company may repurchase up to $150 million of its common stock. As of June 30, 2015, no shares of common stock have been repurchased under this program. There is no expiration date for the program, and the authorization to repurchase shares will end when the Company has repurchased the maximum amount of shares authorized, or the Company’s Board of Directors has determined to discontinue such repurchases.



Item 6. Exhibits
 
 
 
10.1
 
Form of 2015 Restricted Stock Unit Award Agreements - US Executive Officers
 
 
 
10.2
 
Form of 2015 Restricted Stock Unit Award Agreement - non-US Executive Officers
 
 
 
10.3
 
Form of 2015 Stock Option Award Agreement - US Executive Officers
 
 
 
10.4
 
Form of 2015 Stock Option Award Agreement - non-US Executive Officers
 
 
 
10.5
 
Form of 2015 Performance Stock Unit Award Agreement - US Executive Officers
 
 
 
10.6
 
Form of 2015 Performance Stock Unit Award Agreement - non-US Executive Officers
 
 
 
31.1
  
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
 
 
31.2
  
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
 
 
32.1
  
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
 
 
32.2
  
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
 
 
101.INS
  
XBRL Instance Document
 
 
101.SCH
  
XBRL Taxonomy Extension Schema Document
 
 
101.CAL
  
XBRL Taxonomy Calculation Linkbase Document
 
 
101.DEF
  
XBRL Taxonomy Extension Definition Linkbase Document
 
 
101.LAB
  
XBRL Taxonomy Label Linkbase Document
 
 
101.PRE
  
XBRL Taxonomy Presentation Linkbase Document
Attached as Exhibit 101 to this report are the following materials from the WhiteWave Foods Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015, formatted in XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets as of June 30, 2015 and December 31, 2014, (ii) the Condensed Consolidated Statements of Income for the three and six months ended June 30, 2015 and 2014, (iii) the Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and six months ended June 30, 2015 and 2014, (iv) the Condensed Consolidated Statements of Equity for the three and six months ended June 30, 2015 and 2014, (v) the Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2015 and 2014, and (vi) Notes to Condensed Consolidated Financial Statements.
In accordance with Rule 406T of Regulation S-T, the XBRL-related information in Exhibit 101 to this Quarterly Report on Form 10-Q is deemed not filed or part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act, is deemed not filed for purposes of section 18 of the Exchange Act, and otherwise is not subject to liability under these sections.

49



SIGNATURES
Pursuant to the requirement of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
THE WHITEWAVE FOODS COMPANY
 
/s/ James T. Hau
James T. Hau
Vice President and Chief Accounting Officer
August 7, 2015


50