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Securities and Exchange Commission
Washington D.C. 20549
Form 11K
Annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934
For fiscal year ended December 31, 1999
A. Full Title of Plan:
DEAN FOODS COMPANY INVESTMENT AND PROFIT SHARING PLAN
B. Name of issuer of the securities held pursuant to the plan and the address
of its principle executive office:
DEAN FOODS COMPANY
3600 N. RIVER ROAD
FRANKLIN PARK, ILLINOIS 60131
TELEPHONE: 1-800-323-1571
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DEAN FOODS COMPANY
INVESTMENT AND PROFIT SHARING PLAN
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FINANCIAL STATEMENTS
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DECEMBER 31, 1999 AND 1998
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DEAN FOODS COMPANY
INVESTMENT AND PROFIT SHARING PLAN
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INDEX TO FINANCIAL STATEMENTS
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Page
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Report of independent accountants 1
Financial statements:
Statements of net assets available for
plan benefits at December 31, 1999 and 1998 2
Statement of changes in net assets available
for plan benefits for the year ended
December 31, 1999 3
Notes to financial statements 4-10
Assets held for investment purposes as of
December 31, 1999 Schedule I
Note: All other supplementary schedules have been omitted because
they are not applicable.
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Report of Independent Accountants
---------------------------------
June 28, 2000
To the Participants and
Administrator of the
Dean Foods Company
Investment and Profit Sharing Plan
In our opinion, the accompanying statements of net assets available for plan
benefits and the related statement of changes in net assets available for
benefits present fairly, in all material respects, the net assets available for
plan benefits of the Dean Foods Company Investment and Profit Sharing Plan (the
"Plan") at December 31, 1999 and 1998, and the changes in net assets available
for plan benefits for the year ended December 31, 1999, in conformity with
accounting principles generally accepted in the United States. These financial
statements are the responsibility of the Plan's management; our responsibility
is to express an opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with auditing standards
generally accepted in the United States, which require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the opinion expressed
above.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of Assets Held
for Investment Purposes as of December 31, 1999 is presented for the purpose of
additional analysis and is not a required part of the basic financial statements
but is supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. This supplemental schedule is the responsibility of the
Plan's management. The supplemental schedule has been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
PricewaterhouseCoopers LLP
Chicago, Illinois
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DEAN FOODS COMPANY
INVESTMENT AND PROFIT SHARING PLAN
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STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
AT DECEMBER 31, 1999 AND 1998
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1999 1998
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Investments, at market value (Note 3). $ 278,547,299 $ 261,043,280
Loans to participants 11,924,829 11,111,176
Receivables:
Employer and employee contributions receivable 923,914 633,467
Employer profit sharing contribution receivable 211,902 133,072
Trustee receivable 84,608 -
Interest and dividends receivable 3,007,518 3,325,137
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Total Receivables 4,227,942 4,091,676
Net assets available for Plan benefits $ 294,700,070 $ 276,246,132
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The accompanying notes are an integral part of these financial statements.
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DEAN FOODS COMPANY
INVESTMENT AND PROFIT SHARING PLAN
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STATEMENT OF CHANGES IN NET ASSETS AVAILABLE
FOR PLAN BENEFITS FOR THE YEAR
ENDED DECEMBER 31, 1999
-----------------------
Source of assets:
Investment income:
Net appreciation in market value of investments (Note 3). $ 23,053,229
Interest 3,354,190
Dividends 1,077,462
Loan interest 760,189
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28,245,070
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Contributions:
Employer contributions 6,311,264
Employee contributions 18,809,147
Profit sharing contributions 78,830
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25,199,241
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Total sources of assets 53,444,311
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Application of assets:
Participant rollovers to other plans, net 3,425,959
Benefit payments to Plan participants 31,090,805
Fees and expenses 473,609
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Total applications of assets 34,990,373
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Increase in net assets during the year 18,453,938
Net assets available for Plan benefits, beginning of year 276,246,132
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Net assets available for Plan benefits, end of the year $ 294,700,070
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The accompanying notes are an integral part of these financial statements.
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DEAN FOODS COMPANY
INVESTMENT AND PROFIT SHARING PLAN
----------------------------------
NOTES TO FINANCIAL STATEMENTS
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NOTE 1 - GENERAL DESCRIPTION OF THE PLAN:
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The Dean Foods Company Investment and Profit Sharing Plan (the Plan) is a
defined-contribution profit sharing plan that provides retirement benefits to
full-time salaried and non-union employees of Dean Foods Company (the Company).
Certain union employees whose unions have negotiated the benefit are also
eligible for retirement benefits under the Plan.
A committee appointed by the Board of Directors of the Company is responsible
for the administration of the Plan. Assets of the Plan are held in trust funds
maintained at The Northern Trust Company (the Trustee).
Participants' contributions are permitted in an amount not to exceed 16% of
their annual compensation. The Company is required to match participant
contributions in an amount equal to 50% of the first 6% of elective
contributions. In addition, the Company may elect to make an annual supplemental
contribution to the Plan out of its current or accumulated net profits.
Effective January 1, 1998, the Company increased the employer match under the
Company's savings and investment plan from 25% to 50% of the first 6% of pay
contributed by employees. The Company also increased the employee maximum
savings limit from 13% to 16% of annual compensation. Additionally, in July
1997, the Company approved a resolution to eliminate the annual profit sharing
contributions paid under the 401(k) plan after the fiscal 1998 contributions,
except for certain union requirements.
Participants are eligible to contribute to the Plan at the date of hire.
Participants vest immediately in their elective contributions, including any
investment income earned pertaining to such contributions. Participants become
forty percent vested in Company contributions and related earnings after two
years of credited service, with vesting percentages increasing in twenty-percent
increments each subsequent year until participants are fully vested after five
years of credited service. Participants become fully vested in all accounts upon
retirement or after attaining age sixty-five, or upon termination by reason of
death or disability.
Separate accounts are maintained for each participant for Company contributions
and employee elective contributions. Participants direct the investment of all
contributions to established funds in 1% increments. Plan income is allocated to
each participant's account, based on the relative value of individual
participant accounts to the total of all participants' accounts. Forfeitures
from terminated participants are used to reduce subsequent employer
contributions.
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During the plan year ended December 31, 1999, participants were able to allocate
their contributions among the following investment options:
Government Fixed Fund: Primarily investments in government obligations.
Balanced Fund: Stocks, bonds and other debt or equity investments or other
securities convertible into such investments.
Equity Income Fund: Common, preferred or capital stock, or securities
convertible into such stocks, and other equity investments, with a general
long-term growth objective.
Equity Growth Fund: Common, preferred or capital stock, or securities
convertible into such stocks, and other equity investments, with a general
emphasis on individual companies and sectors, rather than general economic
trends.
Small Cap (Company) Fund: Common, preferred or capital stock, or securities
convertible into such stocks, and other equity investments, with a general
emphasis on small, fast growing companies.
International Equity Fund: Common, preferred or capital stock, or securities
convertible into such stocks, and other equity investments, with a general
emphasis on non-U.S. stocks.
Dean Foods Company Stock Fund: Common stock of Dean Foods Company except for a
modest cash position or cash invested in short term investments while awaiting
investment in such stock.
If a participant's employment with Dean Foods Company is terminated because of
retirement at or after he has reached the age of 65, or because of such
participant's disability or death while in the employment of Dean Foods Company,
the balance in his accounts at the accounting date, shall be fully vested and
nonforfeitable and shall be distributable to the participant, or in the event of
the participant's death, to his beneficiary, in either a lump sum or, at the
election of the participant, in a series of installments over a period not
extending beyond the life expectancy of the participant and his spouse.
Participants may borrow from their fund accounts a minimum of $1,000 up to a
maximum of $50,000 or 50% of their account balance, whichever is less. The loans
are secured by the balance in the participant's account and bear interest at
rates that range from 6% to 9%, which are commensurate with the prime rate
listed in the Wall Street Journal on the last business day of the month prior to
the month in which the loan application is made.
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue its contributions at any time and terminate the
Plan subject to the provisions of ERISA. In the event of Plan termination,
participants would become 100% vested in their employer contributions.
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NOTE 2 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
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Basis of accounting
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The financial statements of the Plan have been prepared on the accrual basis of
accounting.
Use of estimates
----------------
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets, liabilities, and changes therein, and
disclosure of contingent assets and liabilities. Actual results could differ
from those estimates.
Contributions
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Employer matching and profit sharing contributions are recorded in the year
accrued by the Company. Employee contributions are recorded in the year withheld
by the Company from employee payrolls or in the year of occurrence for a
qualified rollover contribution as defined in Section 408(d)(3) of the Internal
Revenue Code. Provisions of the Plan specify that no Company contributions and a
maximum of forty percent of any participant's contributions may be invested in
the Dean Foods stock fund.
Investments
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Purchases and sales of securities, including gains and losses on such sales, are
recorded as of the settlement date. Pending trade sales/purchases are netted
against ending investment market values. Realized gains or losses resulting from
the sale of securities are based on the difference between the selling price and
the cost of the securities, cost being determined on a specific identification
basis. In accordance with the policy of stating investments at market value, the
net increase or decrease in the unrealized value of investments for the year is
reflected in the statement of changes in net assets available for plan benefits.
Market values of investments are based on published market quotations where
available. Investments in collective funds are stated at the year-end unit
values as determined by the Trustee, multiplied by the number of units owned.
Investment income is recorded as earned.
The plan presents in the statement of changes in net assets available for
benefits the net appreciation in the fair value of its investments which
consists of the realized gains or losses and the unrealized appreciation on
those investments.
Participant Loans
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Loan transactions are treated as a transfer to (from) the investment fund from
(to) the Participant Loan fund.
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Expenses of the Plan
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Trustee fees and investment fees of the Plan are paid by the Plan. The Company
pays legal, audit, and other administrative expenses fees associated with the
Plan.
Benefits payable
----------------
In accordance with authoritative guidance for accounting and disclosure by
employee benefit plans, participant distributions payable are not presented as a
liability in the statement of net assets or included in benefit payments in the
statement of changes in net assets, resulting in a difference between the Plan's
Form 5500 and the accompanying financial statements. Benefit payment obligations
existing at December 31, 1999 and 1998 were $144,599 and $191,949, respectively.
The following is a reconciliation of net assets available for benefits per the
financial statements to the Form 5500:
December 31,
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1999 1998
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Net assets available for benefits per the
financial statements $ 294,700,070 $ 276,246,132
Amounts payable to withdrawing participants (144,599) (191,949)
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Net assets available for benefits per
the Form 5500 $ 294,555,471 $ 276,054,183
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The following is a reconciliation of benefits paid to participants per the
financial statements to the Form 5500:
Year ended
December 31,
1999
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Benefits paid to participants per the
financial statements $ 31,090,805
Add: Amounts payable to withdrawing
participants at December 31, 1999 144,599
Less: Amounts payable to withdrawing
participants at December 31, 1998 (191,949)
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Benefits paid to participants per the
Form 5500 $ 31,043,455
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Forfeited accounts
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Forfeited nonvested accounts are used to reduce future employer contributions.
In 1999, employer contributions were reduced by $680,814 from forfeited
nonvested accounts. Employer contributions of $6,311,264 include $149,408 of
unallocated participant forfeitures at December 31, 1999.
NOTE 3 - INVESTMENTS:
---------------------
Effective October 1, 1995, the Plan began offering an international equity fund
and an equity growth fund and July 1, 1997, the Plan began offering a small caps
fund. These funds are comprised of stocks, bonds and cash. The balanced fund,
international equity fund, one-half of the equity growth fund and government
fixed fund are managed by Diversified Investment Advisors, formerly Mutual of
New York. One-half of the equity fund is managed by ARK Investments, a division
of Diversified Investment Advisors and the other half is managed by Oppenheimer.
The other half of the equity growth fund and the small caps fund is managed by
Mackay Shields and Furman Selz, respectively. These funds hold various
securities and financial instruments under investment guidelines specified by
the respective investment advisors.
The Reiter Dairy Plan fund and the Florida Plan fund are frozen. The assets in
the Reiter Dairy Plan fund and the Florida Plan fund are being liquidated as
they mature. At December 31, 1999 the Reiter Dairy Plan and Florida Plan assets
have been fully liquidated.
The Dean Foods stock fund, which is managed by the Trustee, consists of Dean
Foods Company Common Stock ($1 par value).
During 1999, the Plan's investments (including gains and losses on investments
bought and sold, as well as held during the year) appreciated in value by
$23,053,229 as follows:
Appreciation/
(Depreciation)
-------------
Balanced fund $ 4,485,273
Equity income fund 503,242
Reiter Dairy Plan fund 24,999
Government fixed fund (35,790)
Small Caps Fund 207,677
Dean Foods stock fund (959,612)
Equity growth fund 12,588,925
International fund 6,238,515
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Total $ 23,053,229
============
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NOTE 4 - INCOME TAX STATUS:
--------------------------
The Plan administrator has received a favorable determination letter for the
Plan from the Internal Revenue Service dated February 22, 1996. Following the
amendments to the Plan relating to contribution percentages and employer match,
the Plan administrator and the Plan's tax counsel believe that the Plan is still
designed and being operated in compliance with the applicable requirements of
the Internal Revenue Code. Therefore, they believe that the Plan was qualified
and the related trust was tax exempt as of December 31, 1999 and 1998. As such,
no provision for income taxes has been made in the accompanying financial
statements.
NOTE 5 - SIGNIFICANT INVESTMENTS:
--------------------------------
Investments with fair values in excess of 5% of net assets available for
benefits at December 31, 1999 and 1998 were:
1999 1998
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*Dean Foods Company Common Stock $24,096,053 $25,706,120
Diversified Investment
Advisors International
Equity Fund Mutual Fund 17,985,739 11,140,276
Dean Foods Equity
Growth Fund Mutual Fund 58,216,236 39,439,690
Dean Foods Equity
Income Fund Mutual Fund 68,753,118 80,264,977
Diversified Investment
Advisors Balanced
Fund Mutual Fund 41,604,780 41,983,171
Money Government U.S. Government and
Fixed Fund Agency Issues 61,955,318 58,431,421
* Party in interest
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Note 6 - Related Party Transactions:
------------------------------------
Certain Plan investments are cash equivalents managed by Northern Trust.
Northern Trust acts as the trustee for the Plan. Transactions in such
investments qualify as party-in-interest transactions, which are exempt from the
prohibited transaction rules. Fees paid by the Plan for the investment
management services amounted to $473,609 for the year ended December 31, 1999.
In addition, Plan investments include shares of Dean Foods Company Common Stock
and Participant Loans, which also qualify as party-in-interest transactions.
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SCHEDULE I
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DEAN FOODS COMPANY
INVESTMENT AND PROFIT SHARING PLAN
----------------------------------
ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1999
-----------------------
Description
Identity of Issue Of Investment Fair Value
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*Dean Foods Company Common Stock $24,096,053
Diversified Investment
Advisors International
Equity Fund Mutual Fund 17,985,739
Dean Foods Equity
Growth Fund Mutual Fund 58,216,236
Dean Foods Equity
Income Fund Mutual Fund 68,753,118
Diversified Investment
Advisors Balanced
Fund Mutual Fund 41,604,780
Money Government U.S. Government and
Fixed Fund Agency Issues 61,955,317
Dean Foods Small
Cap Fund Mutual Fund 3,034,141
*Northern Trust Collective
Short-Term Investment
Fund Cash Equivalents 2,901,915
*Participant Loans Loans at 6-9% 11,924,829
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$290,472,128
============
*Party in interest
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CONSENT OF INDEPENDENT ACCOUNTANTS
----------------------------------
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 2-94753) of Dean Foods Company of our report dated
June 28, 2000 relating to the financial statements of Dean Foods Company
Investment and Profit Sharing Plan, which appears in the Form 11-K.
PricewaterhouseCoopers LLP
Chicago, Illinois
June 28, 2000
