-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, W0UwiKPS+wXHXPpFF9vr76WGbbDLblfeewv0EB/GFP9dTreIvv00cLfWfR2RxqCf EEY4gpOnz/HSBgbmKdB7jg== 0000950152-96-000354.txt : 19960328 0000950152-96-000354.hdr.sgml : 19960328 ACCESSION NUMBER: 0000950152-96-000354 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19960207 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19960207 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CHIQUITA BRANDS INTERNATIONAL INC CENTRAL INDEX KEY: 0000101063 STANDARD INDUSTRIAL CLASSIFICATION: 2011 IRS NUMBER: 041923360 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-01550 FILM NUMBER: 96512877 BUSINESS ADDRESS: STREET 1: 250 E FIFTH ST CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 5137848011 FORMER COMPANY: FORMER CONFORMED NAME: UNITED BRANDS CO DATE OF NAME CHANGE: 19900403 8-K 1 CHIQUITA BRANDS INTERNATIONAL 8-K 1 FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of Earliest Event Reported): February 7, 1996 CHIQUITA BRANDS INTERNATIONAL, INC. (Exact name of registrant as specified in its charter) New Jersey 1-1550 04-1923360 (State of other (Commission (IRS Employer jurisdiction of File Number) Identification No.) incorporation) 250 East Fifth Street, Cincinnati, Ohio 45202 (Address of principal executive offices) Registrant's telephone number, including area code: (513) 784-8000 2 INFORMATION TO BE INCLUDED IN THE REPORT Items 1, 2, 3, 4, 6 and 8 are not applicable and are omitted from this Report. Item 5. Other Events As previously reported, on December 20, 1995, the Company completed the sale of its wholly owned subsidiary, John Morrell & Co., which comprised the Meat Division, to Smithfield Foods, Inc. This sale represents the final step in the Company's divestiture of its meat business. Accordingly, the Company's audited financial statements for the year ended December 31, 1994 and unaudited financial statements for the nine months ended September 30, 1995 and related schedules and exhibits have been restated to deconsolidate the discontinued Meat Division operations. The Company is making this filing in order to place the information contained herein on file with the Securities and Exchange Commission under the Securities Exchange Act of 1934. Reference is made to the restated consolidated financial statements attached as Exhibits 7(c)13.1 and 13.2 and the computations of earnings per common share attached as Exhibit 7(c) 11.1 and 11.2. Item 7. Financial Statements and Exhibits. (a) Financial Statements of Businesses Acquired. Not Applicable. (b) Pro Forma Financial Information. Not Applicable. (c) Exhibits. 11.1 Computation of Earnings per Common Share for the years ended December 31, 1994, 1993, 1992, 1991 and 1990. 11.2 Computation of Earnings per Common Share for the nine month periods ended September 30, 1995 and 1994. 13.1 Restated Consolidated Financial Statements of the Company and Report of Independent Auditors thereon, together with Selected Financial Data and Financial Statement Schedule II to restate the corresponding information included in the Chiquita Brands International, Inc. 1994 Annual Report to shareholders (pages 5, 6 and 10 through 23) and page 16 of Annual Report on Form 10-K. The following financial statements and other items are specifically included in Exhibit 13.1: Selected Financial Data Report of Independent Auditors Consolidated Statement of Income for the Years ended December 31, 1994, 1993 and 1992 Consolidated Balance Sheet at December 31, 1994 and 1993 Consolidated Statement of Shareholders' Equity for the Years ended December 31, 1994, 1993 and 1992 Consolidated Statement of Cash Flow for the Years ended December 31, 1994, 1993 and 1992 Notes to Consolidated Financial Statements Financial Statements Schedule II - Allowance for Doubtful Accounts Receivable 13.2 Restated unaudited Consolidated Financial Statements to restate the consolidated financial statements included in the Company's Quarterly Report on Form 10-Q for the Quarter ended September 30, 1995. The following financial statements and other items are specifically included in Exhibit 13.2: Consolidated Statement of Income for the Nine Months ended September 30, 1995 and 1994 Consolidated Balance Sheet at September 30, 1995, December 31, 1994 and September 30, 1994 Consolidated Statement of Cash Flow for the Nine Months ended September 30, 1995 and 1994 Notes to Consolidated Financial Statements 2 3 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: February 7, 1996 CHIQUITA BRANDS INTERNATIONAL, INC. By /s/ William A. Tsacalis ----------------------- William A. Tsacalis Vice President and Controller 3 EX-11.2 2 EXHIBIT 11.2 1 Exhibit 11.2 CHIQUITA BRANDS INTERNATIONAL, INC. ----------------------------------- COMPUTATION OF EARNINGS PER COMMON SHARE (Unaudited) ---------------------------------------------------- (In thousands, except per share amounts)
Nine Months Ended September 30, --------------------------- 1995 1994 ------------ ------------ A. Primary earnings (loss) per common share ---------------------------------------- Income (loss) used to calculate primary earnings (loss) per common share: Income (loss) from continuing operations $ 57,416 $ (14,173) Dividends on Series A Preferred Stock (6,199) (5,166) ----------- ----------- Income (loss) from continuing operations available to common shares 51,217 (19,339) Discontinued operations 3,351 -- ----------- ----------- Income (loss) available to common shares before extraordinary item 54,568 (19,339) Extraordinary loss from debt refinancing (4,713) (22,840) ----------- ----------- Net income (loss) available to common shares $ 49,855 $ (42,179) =========== =========== Shares used to calculate primary earnings (loss) per common share: Weighted average common and equivalent Series C preference shares outstanding 53,429 51,939 Less restricted common shares (391) -- Dilutive effect of assumed exercise of stock options and warrants 547 -- ----------- ----------- 53,585 51,939 =========== =========== Primary earnings (loss) per common share: Continuing operations $ .96 $ (.37) Discontinued operations .06 -- Extraordinary item (.09) (.44) ----------- ----------- Net income (loss) $ .93 $ (.81) =========== ===========
2 CHIQUITA BRANDS INTERNATIONAL, INC. ----------------------------------- COMPUTATION OF EARNINGS PER COMMON SHARE (Unaudited) ---------------------------------------------------- (In thousands, except per share amounts)
Nine Months Ended September 30, --------------------------- 1995 1994 ------------ ------------ B. Fully diluted earnings (loss) per common share ---------------------------------------------- Income (loss) used to calculate fully diluted earnings (loss) per common share: Income (loss) from continuing operations $ 57,416 $ (14,173) Dividends on Series A Preferred Stock -- (5,166) ----------- ----------- Income (loss) from continuing operations available to common shares 57,416 (19,339) Discontinued operations 3,351 -- ----------- ----------- Income (loss) available to Common Shares before extraordinary item 60,767 (19,339) Extraordinary loss from debt refinancing (4,713) (22,840) ----------- ----------- Net income (loss) available to common shares $ 56,054 $ (42,179) =========== =========== Shares used to calculate fully diluted earnings (loss) per common share: Weighted average common and equivalent Series C preference shares outstanding 53,429 51,939 Less restricted common shares (358) -- Dilutive effect of assumed exercise of stock options and warrants 626 -- Dilutive effect of assumed conversion of Series A Preferred Stock 7,566 -- ----------- ----------- 61,263 51,939 =========== =========== Fully diluted earnings (loss) per common share: Continuing operations $ .94 $ (.37) Discontinued operations .05 -- Extraordinary item (.08) (.44) ----------- ----------- Net income (loss) $ .91 $ (.81) =========== ===========
EX-13.1 3 EXHIBIT 13.1 1 Report of Ernst & Young LLP, Independent Auditors The Board of Directors and Shareholders of Chiquita Brands International, Inc. We have audited the accompanying consolidated balance sheets of Chiquita Brands International, Inc. and subsidiary companies as of December 31, 1994 and 1993, and the related consolidated statements of income, shareholders' equity and cash flow for each of the three years in the period ended December 31, 1994. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards 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. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Chiquita Brands International, Inc. and subsidiary companies at December 31, 1994 and 1993 and the consolidated results of their operations and their cash flow for each of the three years in the period ended December 31, 1994 in conformity with generally accepted accounting principles. /s/ Ernst & Young LLP Cincinnati, Ohio February 27, 1995, except for Note 1, as to which the date is December 20, 1995 2 EXHIBIT 13.1
Selected Financial Data Chiquita Brands International, Inc. and Subsidiary Companies (In thousands, except per share amounts) 1994 1993 1992 1991 1990 ---------- ---------- ---------- ---------- ---------- FINANCIAL CONDITION Working capital $230,434 $266,793 $482,338 $960,093 $433,424 Capital expenditures 136,981 196,554 472,273 395,641 312,698 Total assets 2,774,239 2,722,824 2,873,699 2,937,344 1,913,674 Capitalization Short-term debt 221,051 192,207 229,286 187,821 106,698 Long-term debt 1,364,836 1,438,378 1,411,319 1,202,839 494,182 Shareholders' equity 644,809 584,069 667,962 967,925 687,709 --------- --------- --------- --------- --------- OPERATIONS Net sales $2,505,826 $2,532,925 $2,723,250 $2,604,128 $2,186,452 Operating income (loss)* 71,185 103,848 (96,588) 197,818 166,180 Income (loss) from continuing operations before income taxes (70,811) (39,081) (216,708) 160,009 153,531 Income (loss) from continuing operations (84,311) (51,081) (221,708) 110,909 95,831 Discontinued operations 35,611 -- (62,332) 17,586 (1,913) Income (loss) before extraordinary item (48,700) (51,081) (284,040) 128,495 93,918 Net income (loss)* (71,540) (51,081) (284,040) 128,495 93,918 ---------- --------- --------- --------- --------- SHARE DATA Average number of common shares outstanding 52,033 51,427 51,804 50,382 42,089 Earnings (loss) per common share: Primary -Continuing operations $(1.76) $(.99) $(4.28) $2.20 $2.28 -Discontinued operations .69 -- (1.20) .35 (.05) -Extraordinary item (.44) -- -- -- -- -Net income (loss) (1.51) (.99) (5.48) 2.55 2.23 Fully diluted -Continuing operations (1.76) (.99) (4.28) 2.19 2.24 -Discontinued operations .69 -- (1.20) .33 (.04) -Extraordinary item (.44) -- -- -- -- -Net income (loss) (1.51) (.99) (5.48) 2.52 2.20 Dividends declared per common share .20 .44 .66 .55 .35 Market price per common share: High 19.25 17.50 40.13 50.63 32.00 Low 11.25 10.13 15.75 29.63 16.13 End of year 13.63 11.50 17.25 40.00 32.00 --------- --------- --------- --------- --------- * Includes unusual charges and losses of $67.2 million in 1994 and restructuring and reorganization charges of $61.3 million in 1992 (see Notes 3 and 15 to the Consolidated Financial Statements).
3 Consolidated Statement of Income Chiquita Brands International, Inc. and Subsidiary Companies
Year Ended December 31, (In thousands, except per share amounts) 1994 1993 1992 -------------- -------------- -------------- Net sales $2,505,826 $2,532,925 $2,723,250 -------------- -------------- -------------- Operating expenses Cost of sales 1,996,179 1,993,552 2,309,425 Selling, general and administrative expenses 331,498 332,934 368,675 Depreciation 106,964 102,591 80,438 Restructuring and reorganization -- -- 61,300 -------------- -------------- -------------- 2,434,641 2,429,077 2,819,838 -------------- -------------- -------------- Operating income (loss) 71,185 103,848 (96,588) Interest income 22,902 20,377 43,301 Interest expense (167,464) (169,789) (155,036) Other income (expense), net 2,566 6,483 (8,385) -------------- -------------- -------------- Loss from continuing operations before income taxes (70,811) (39,081) (216,708) Income taxes (13,500) (12,000) (5,000) -------------- -------------- -------------- Loss from continuing operations (84,311) (51,081) (221,708) Discontinued operations 35,611 -- (62,332) -------------- -------------- -------------- Loss before extraordinary item (48,700) (51,081) (284,040) Extraordinary loss from prepayment of debt (22,840) -- -- -------------- -------------- -------------- Net loss $(71,540) $(51,081) $(284,040) -------------- -------------- -------------- Less dividends on Series A preferred stock (7,232) -- -- -------------- -------------- -------------- Net loss on common shares $(78,772) $(51,081) $(284,040) -------------- -------------- -------------- Per common share - primary and fully diluted - Continuing operations $(1.76) $(.99) $(4.28) - Discontinued operations .69 -- (1.20) - Extraordinary item (.44) -- -- - Net loss (1.51) (.99) (5.48) -------------- -------------- -------------- Weighted average number of common shares outstanding 52,033 51,427 51,804 -------------- -------------- --------------
See Notes to Consolidated Financial Statements. 4 Consolidated Balance Sheet Chiquita Brands International, Inc. and Subsidiary Companies
December 31, (In thousands, except share amounts) 1994 1993 -------------- -------------- ASSETS Current assets Cash and equivalents $165,523 $151,226 Trade receivables, less allowances of $13,060 and $12,393, respectively 205,194 187,936 Other receivables, net 92,725 85,170 Inventories 308,549 307,073 Other current assets 32,334 39,054 -------------- -------------- Total current assets 804,325 770,459 Restricted cash 75,030 51,020 Net assets of discontinued operations 46,718 24,481 Property, plant and equipment, net 1,387,132 1,427,191 Investments and other assets 301,776 282,914 Intangibles, net 159,258 166,759 -------------- -------------- Total assets $2,774,239 $2,722,824 -------------- -------------- LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Notes and loans payable $130,040 $112,796 Long-term debt due within one year 91,011 79,411 Accounts payable 232,535 202,923 Accrued liabilities 120,305 108,536 -------------- -------------- Total current liabilities 573,891 503,666 Long-term debt of parent company 840,377 881,124 Long-term debt of subsidiaries 524,459 557,254 Accrued pension and other employee benefits 74,855 74,588 Other liabilities 115,848 122,123 -------------- -------------- Total liabilities 2,129,430 2,138,755 -------------- -------------- Shareholders' equity Preferred and preference stock 190,639 52,270 Capital stock, $.33 par value (49,300,881 and 48,510,353 shares outstanding, respectively) 16,434 16,170 Capital surplus 505,800 494,240 Retained earnings (deficit) (52,940) 39,318 Minimum pension liability adjustment for discontinued operations (15,124) (17,929) -------------- -------------- Total shareholders' equity 644,809 584,069 -------------- -------------- Total liabilities and shareholders' equity $2,774,239 $2,722,824 -------------- --------------
See Notes to Consolidated Financial Statements. 5 Consolidated Statement of Shareholders' Equity Chiquita Brands International, Inc. and Subsidiary Companies
Minimum pension liability adjust- Preferred ment for Total and Retained discon- share- preference Capital earnings tinued holders' stock Capital stock surplus (deficit) operations equity - - - ---------------------------------------------------------------------------------------------------------------------------------- (In thousands, Par except share amounts) Shares value - - - ---------------------------------------------------------------------------------------------------------------------------------- Balance at December 31, 1991 $ -- 49,925,777 $16,642 $533,627 $417,656 $ -- $967,925 Capital stock repurchased -- (1,699,100) (566) (17,395) (16,542) -- (34,503) Stock options exercised -- 297,573 99 4,549 -- -- 4,648 Series C preference stock issued in exchange for capital stock 52,270 (3,241,546) (1,081) (32,909) (18,795) -- (515) Shares issued in an acquisition -- 2,694,136 898 (751) 52,258 -- 52,405 Other shares issued -- 186,720 63 3,248 -- -- 3,311 Change in minimum pension liability adjustment -- -- -- -- -- (6,925) (6,925) Net loss -- -- -- -- (284,040) -- (284,040) Dividends Capital stock -- -- -- -- (33,566) -- (33,566) Preference stock -- -- -- -- (778) -- (778) - - - ---------------------------------------------------------------------------------------------------------------------------------- Balance at December 31, 1992 $52,270 48,163,560 $16,055 $490,369 $116,193 $(6,925) $667,962 Capital stock repurchased -- (30,000) (10) (102) (325) -- (437) Stock options exercised -- 17,120 6 168 -- -- 174 Other shares issued -- 168,000 55 1,738 -- -- 1,793 Change in minimum pension liability adjustment -- -- -- -- -- (11,004) (11,004) Net loss -- -- -- -- (51,081) -- (51,081) Dividends Capital stock -- -- -- -- (21,191) -- (21,191) Preference stock -- 191,673 64 2,067 (4,278) -- (2,147) - - - ---------------------------------------------------------------------------------------------------------------------------------- Balance at December 31, 1993 $52,270 48,510,353 $16,170 $494,240 $39,318 $(17,929) $584,069 Stock options exercised -- 118,133 40 1,325 -- -- 1,365 Series A preferred stock issued 138,369 -- -- -- -- -- 138,369 Other shares issued -- 358,244 119 6,075 -- -- 6,194 Change in minimum pension liability adjustment -- -- -- -- -- 2,805 2,805 Net loss -- -- -- -- (71,540) -- (71,540) Dividends Capital stock -- -- -- -- (9,757) -- (9,757) Preferred and preference stock -- 314,151 105 4,160 (10,961) -- (6,696) - - - ---------------------------------------------------------------------------------------------------------------------------------- Balance at December 31, 1994 $190,639 49,300,881 $16,434 $505,800 $(52,940) $(15,124) $644,809 - - - ----------------------------------------------------------------------------------------------------------------------------------
See Notes to Consolidated Financial Statements. 6 Consolidated Statement of Cash Flow Chiquita Brands International, Inc. and Subsidiary Companies
Year Ended December 31, (In thousands) 1994 1993 1992 - - - ----------------------------------------------------------------------------------------------------------- Cash provided (used) by: Operations Loss from continuing operations $(84,311) $(51,081) $(221,708) Depreciation and amortization 113,080 109,711 87,509 Deferred income taxes -- (3,191) -- Non-cash charges (write-downs of farms and cultivations in 1994 and restructuring and reorganization charges in 1992) 24,600 -- 45,600 Changes in current assets and liabilities Receivables (19,418) (7,571) 30,675 Inventories (14,275) 40,535 24,910 Accounts payable 26,083 (41,027) (39,502) Other current assets and liabilities 19,454 (4,249) 33,904 Other 7,600 4,086 9,447 - - - ----------------------------------------------------------------------------------------------------------- Cash flow from operations 72,813 47,213 (29,165) - - - ----------------------------------------------------------------------------------------------------------- Investing Capital expenditures (136,981) (196,554) (409,770) Restricted cash deposits (24,010) (51,020) -- Acquisitions and long-term investments (7,717) (49,466) (35,217) Decrease in marketable securities -- 25,212 87,113 Proceeds from sales of ships and equipment 41,705 22,000 -- Other (6,518) 11,828 (8,126) - - - ----------------------------------------------------------------------------------------------------------- Cash flow from investing (133,521) (238,000) (366,000) - - - ----------------------------------------------------------------------------------------------------------- Financing Debt transactions Issuances of long-term debt 278,388 151,160 254,820 Repayments of long-term debt (369,666) (132,839) (63,907) Increase (decrease) in notes and loans payable 21,911 (25,621) (30,898) Stock transactions Issuance of preferred stock 138,369 -- -- Issuances of capital stock 5,006 1,854 6,101 Repurchases of capital stock -- (437) (34,503) Dividends (16,453) (23,338) (34,344) - - - ----------------------------------------------------------------------------------------------------------- Cash flow from financing 57,555 (29,221) 97,269 - - - ----------------------------------------------------------------------------------------------------------- Discontinued operations 17,450 (16,735) (26,140) - - - ---------------------------------------------------------------------------------------------------------- Increase (decrease) in cash and equivalents 14,297 (236,743) (324,036) Balance at beginning of year 151,226 387,969 712,005 - - - ----------------------------------------------------------------------------------------------------------- Balance at end of year $165,523 $151,226 $387,969 - - - -----------------------------------------------------------------------------------------------------------
See Notes to Consolidated Financial Statements. 7 Notes to Consolidated Financial Statements Chiquita Brands International, Inc. and Subsidiary Companies Note 1 -- Summary of Significant Accounting Policies American Financial Corporation and its subsidiaries ("AFC") owned approximately 46% of the voting stock of Chiquita Brands International, Inc. ("Chiquita" or the "Company") as of December 31, 1994. Consolidation The consolidated financial statements include the accounts of the Company and its majority-owned subsidiaries, other than the Meat Division which was sold in December 1995 and is accounted for as a discontinued operation. Consolidated financial statements have been restated for discontinued operations. The accompanying notes present amounts related only to continuing operations, unless otherwise indicated. Intercompany balances and transactions have been eliminated. Investments representing minority interests are accounted for by the equity method when Chiquita has the ability to exercise significant influence in the investees' operations; otherwise, they are accounted for at cost. At December 31, 1994 and 1993, investments in food-related companies of $66 million and $54 million, respectively, were accounted for using the equity method. The excess ($18 million) of the carrying value over Chiquita's share of the fair value of the investees' net assets at the date of acquisition is being amortized over 40 years. Cash and Equivalents Cash and equivalents include all unrestricted cash and highly liquid investments with a maturity when purchased of three months or less. Inventories Inventories are valued at the lower of cost or market. Cost for growing crops and certain banana inventories is determined principally on the "last-in, first-out" (LIFO) basis. Cost for other inventory categories is determined principally on the "first-in, first-out" (FIFO) or average cost basis. Intangibles Intangibles consist of goodwill and trademarks which are being amortized over 40 years. Accumulated amortization was $34.0 million and $30.5 million at December 31, 1994 and 1993, respectively. Income Taxes Deferred income taxes are recognized at currently enacted tax rates for temporary differences between the financial reporting and income tax bases of assets and liabilities. Deferred taxes are not provided on the undistributed earnings of subsidiaries operating outside the U.S. that have been or are intended to be permanently reinvested. Foreign Currencies Chiquita utilizes the U.S. dollar as its functional currency. Net foreign exchange gains, which amounted to approximately $11.0 million, $7.5 million and $4.8 million in 1994, 1993 and 1992, respectively, are included in income. The Company has a long-standing policy of periodically entering into foreign exchange forward contracts and purchasing foreign currency options to hedge transactions denominated in foreign 8 currencies in order to protect the Company from the risk that the eventual dollar cash flows of the transactions will be adversely affected by changes in exchange rates. Gains and losses on forward contracts used to hedge firm commitments and on purchased options are deferred and included in the measurement of the underlying transactions. Gains and losses on forward contracts used to hedge other transactions are included in income on a current basis. Earnings Per Share Primary earnings per share is calculated on the basis of the weighted average number of shares of common stock and equivalent Series C preference stock outstanding during the year and the dilutive effect, if any, of assumed conversion of other common stock equivalents (stock options and warrants). Fully diluted earnings per share includes the dilutive effect, if any, of assumed conversion of Series A preferred stock and convertible subordinated debentures. Note 2 -- Discontinued Operations During the fourth quarter of 1992, after evaluation of reorganization plans announced earlier that year and completion of other preparatory actions, Chiquita adopted a plan of disposal for all remaining Meat Division operations. Pursuant to the plan, the Company completed the sale of a major fresh pork processing facility in December 1992. During 1994, the Division's specialty meat operations were sold for approximately $53 million in cash and the Meat Division obtained a favorable Federal Circuit Court of Appeals ruling that reconfirmed its right to unilaterally reduce or eliminate medical benefits of retired hourly employees. The Meat Division subsequently terminated these benefits, which had an annual cost of approximately $12.2 million in 1994, $15.3 million in 1993 and $12.9 million in 1992. Net sales for the Meat Division were $1,456 million in 1994, $1,550 million in 1993 and $1,745 million in 1992. Meat Division operating results included in Chiquita's Consolidated Statement of Income as "Discontinued operations" were income of $35.6 million in 1994, approximately breakeven in 1993 and a loss of $62.3 million in 1992. The 1994 operating results include a $10.2 million gain from the sale of the specialty meat operations. The 1992 operating results include a $35.1 million provision for estimated loss on disposal. At December 31, 1994, the net assets of discontinued operations consist of the following:
(In thousands) - - - ----------------- Current assets $113,917 Property, plant and equipment, net 46,726 Other assets 13,857 ----------- Total assets 174,500 ----------- Current liabilities 79,926 Accrued pension and other employee benefits 45,470 Other liabilities 2,386 ----------- Total liabilities 127,782 ----------- Total net assets $46,718 ===========
9 The adjustment to shareholders' equity for minimum pension liability represents the excess of the accumulated benefit obligation over the fair market value of plan assets in the Meat Division's hourly workers' pension plan. Note 3 -- Industry Segment and Geographic Area Information The Company is one of the world's leading marketers, processors and producers of quality food products. The Company's products are sold throughout the world and its principal production and processing operations are conducted in North, Central and South America. With the sale of its remaining Meat Division operations in December 1995, the Company's continuing operations constitute a single business segment. Chiquita's earnings are heavily dependent upon products grown and purchased in Central and South America. These activities, a significant factor in the economies of the countries where Chiquita produces bananas and other agricultural and consumer products, are subject to the risks that are inherent in operating in such foreign countries, including government regulation, currency restrictions and other restraints, risk of expropriation and burdensome taxes. Certain of these operations are substantially dependent upon leases and other agreements with these governments. The Company is also subject to a variety of governmental regulations in certain countries where it markets bananas, including import quotas and tariffs, currency exchange controls and taxes. Financial information with respect to the Company's operations by geographic area is shown on the following page. 10 INFORMATION BY GEOGRAPHIC AREA
(In thousands) 1994 1993 1992 -------------- -------------- -------------- Net sales to unaffiliated customers North America $1,224,114 $1,238,678 $1,192,613 Central and South America 179,726 184,060 187,753 Europe and other international 1,101,986 1,110,187 1,342,884 -------------- -------------- -------------- Consolidated net sales $2,505,826 $2,532,925 $2,723,250 -------------- -------------- -------------- Operating income (loss) North America $(8,370) $20,469 $(47,584) Central and South America 19,071 17,607 16,906 Europe and other international 73,746 78,691 (52,541) Unallocated expenses (13,262) (12,919) (13,369) -------------- -------------- -------------- Consolidated operating income (loss) $ 71,185 $ 103,848 $ (96,588) -------------- -------------- -------------- Identifiable assets North America $493,079 $509,760 $538,165 Central and South America 864,232 912,321 918,230 Europe and other international 385,241 339,374 306,131 Shipping operations 671,756 656,816 586,960 Corporate assets 359,931 304,553 524,213 -------------- -------------- -------------- Consolidated assets $2,774,239 $2,722,824 $2,873,699 -------------- -------------- --------------
11 Net sales in the preceding tables exclude intercompany sales of bananas from Central and South America to different geographic areas. These sales, which are eliminated in consolidation and are measured at cost under the method used for internal management financial reporting purposes, were approximately $500 million in each of the last three years. There are no banana sales to unaffiliated customers in Central and South America. Other intergeographic sales are not significant. Operating income for 1994 includes charges and losses totaling $67.2 million primarily resulting from farm closings and write-downs of banana cultivations in Honduras, the substantial reduction of the Company's Japanese "green" banana trading operations and write-downs of ships held for sale as follows: North America, $27.1 million; Europe and other international, $40.1 million. Operating income for 1992 includes restructuring and reorganization charges (see Note 4) allocated as follows: North America, $6.8 million; Europe and other international, $54.5 million. For purposes of reporting identifiable assets by geographic area, cash and equivalents, marketable securities, restricted cash, trademarks and the net assets of discontinued operations are included in corporate assets. Minority equity investments are included in the geographic area where their operations are located. Note 4 -- Restructuring and Reorganization During the fourth quarter of 1992, the Company undertook a program to adjust its fresh foods volume and cost infrastructure to significantly reduce production, distribution and overhead costs. This program, which included consolidation of operations, asset disposals and workforce reductions, resulted in restructuring and reorganization charges of $61.3 million. Note 5 -- Inventories Inventories consist of the following:
December 31, (In thousands) 1994 1993 ----------- ----------- Bananas and other fresh produce $42,444 $36,851 Other food products 68,713 62,110 Growing crops 115,177 117,839 Materials and supplies 68,062 75,206 Other 14,153 15,067 ----------- ----------- $308,549 $307,073 =========== ===========
The carrying value of inventories valued by the LIFO method was $126 million at December 31, 1994 and $129 million at December 31, 1993. If inventories were stated at current costs, total inventory values would have been approximately $30 million and $10 million higher than reported at December 31, 1994 and 1993. 12 Note 6 -- Property, Plant and Equipment, Net Property, plant and equipment consist of the following:
December 31, (In thousands) 1994 1993 -------------- -------------- Land $107,579 $103,987 Buildings and improvements 205,735 198,434 Machinery and equipment 399,437 411,693 Ships and containers 796,906 790,817 Cultivations 317,233 305,546 Other 78,352 79,333 -------------- -------------- 1,905,242 1,889,810 Less accumulated depreciation (518,110) (462,619) -------------- -------------- Property, plant and equipment, net $1,387,132 $1,427,191 ============== ==============
Property, plant and equipment are stated at cost and, except for land and certain improvements, are depreciated on a straight-line basis over their estimated useful lives. The Company capitalized interest costs of $4 million in 1994, $8 million in 1993 and $21 million in 1992 as part of the cost of major production and shipping asset construction projects. 13 Capital expenditures for 1992 include $62.5 million of purchases which were directly financed. Note 7 -- Leases Total rental expense consists of the following:
(In thousands) 1994 1993 1992 ------------ ------------ ------------ Gross rentals - ships and containers $101,207 $142,969 $222,916 - other 34,084 32,528 34,513 ------------ ------------ ------------ 135,291 175,497 257,429 Less sublease rentals (4,740) (7,189) (20,775) ------------ ------------ ------------ $130,551 $168,308 $236,654 ============ ============ ============
14 Future minimum rental payments required under operating leases having initial or remaining non-cancelable lease terms in excess of one year at December 31, 1994 are as follows:
(In thousands) Gross Rentals Ships and containers Other Total -------------- -------------- -------------- 1995 $71,749 $15,767 $87,516 1996 29,168 15,355 44,523 1997 27,492 13,330 40,822 1998 22,601 9,693 32,294 1999 22,253 5,021 27,274 Later years 70,425 6,703 77,128 -------------- -------------- --------------
Portions of the minimum rental payments for ships constitute reimbursement for ship operating costs paid for by the lessor. Future minimum rental payments to be received from non-cancelable subleases at December 31, 1994, principally for office space and ships, are $49.3 million. 15 Note 8 -- Debt Long-term debt consists of the following:
(In thousands) December 31, Parent Company 1994 1993 -------------- -------------- 9 1/8% senior notes, due 2004 $175,000 $ -- 9 5/8% senior notes, due 2004, less unamortized discount of $2,632 and $2,805 (imputed interest rate of 9.8%) 247,368 247,195 7% subordinated debentures, due 2001, convertible into capital stock at $43 per share 138,000 138,000 10 1/2% subordinated debentures, due 2004, less unamortized discount of $5,839 and $10,391 (imputed interest rate of 12.1%) 59,980 100,429 11 1/2% subordinated notes, due 2001 220,000 220,000 9 1/8% subordinated debentures, due 1998, less unamortized discount of $1,776 (imputed interest rate of 13.2%) -- 15,900 10 1/4% subordinated debentures, due 2005, less unamortized discount of $7,538 (imputed interest rate of 13.7%) -- 34,554 11 7/8% subordinated debentures, due 2003 -- 125,000 Other notes and loans 47 62 Less current maturities (18) (16) -------------- -------------- Long-term debt of parent company $840,377 $881,124 ============== ============== Subsidiary Companies: Loans payable secured by ships and containers, due in installments from 1995 to 2005, bearing interest at effective rates averaging 8.8% (8.1% at December 31, 1993) $368,146 $376,492 Caribbean Basin Projects Financing Authority (CBI Industrial Revenue Bonds 1993 Series A) loan, due 1998, bearing interest at a variable rate of 4.4% (2.7% at December 31, 1993) 38,000 38,000 Overseas Private Investment Corporation loans, due in install- ments through 2002, bearing interest at rates averaging 9% 17,774 25,275 Note payable, due in installments from 1995 through 1998, bearing interest at 1% below prime 17,200 19,200 Loans and notes payable in foreign currencies maturing through 2008, bearing interest at rates averaging 22% (23% at December 31, 1993) 50,846 81,902 Other loans and notes payable maturing through 2012, bearing interest at rates averaging 9% (8% at December 31, 1993) 123,486 95,780 Less current maturities (90,993) (79,395) -------------- -------------- Long-term debt of subsidiaries $524,459 $557,254 ============== ==============
16 Certain of the subordinated debentures have sinking fund requirements and are callable at the Company's option at prices ranging from par to premiums of 1.9% to 5.7% over par at various dates through 1998. Certain of the Company's debt agreements contain restrictions on the payment of cash dividends. At December 31, 1994, approximately $155 million was available for dividend payments under the most restrictive of these agreements. In February 1994, the Company issued $175 million principal amount of 9 1/8% senior notes due 2004. The unsecured notes rank equally with existing and future senior unsecured indebtedness of the Company. The proceeds from this issuance, together with the proceeds from the sale of preferred stock (see Note 12), were used to redeem or repay subordinated and subsidiary debt, including 11 7/8% Subordinated Debentures, 10 1/4% Subordinated Debentures, 9 1/8% Subordinated Debentures and a portion ($45 million principal amount) of its 10 1/2% Subordinated Debentures. These prepayments resulted in an extraordinary loss of $22.8 million on which no tax benefit was recorded. This loss consists principally of write-offs of unamortized discounts and $5 million of call premiums. At December 31, 1994, $70 million of the carrying amount of loans secured by ships bear interest at fixed rates averaging 6.9%. The remaining ship and container loans carry variable interest rates ranging from .75% to 1.5% over LIBOR. Interest rate swap agreements fix the rate of interest on $92 million of these variable rate ship and container loans at an average rate of 9.1% (see Note 9). The overall effective interest rate on ship and container loans includes the amortization of deferred hedging gains and losses from interest rate futures contracts. No such contracts were outstanding at December 31, 1994 or 1993. Cash payments relating to interest expense were $158.7 million, $159.4 million and $139.3 million in 1994, 1993 and 1992, respectively. Maturities and sinking fund requirements on long-term debt during the next five years, after application of previously reacquired debentures to meet sinking fund requirements, are:
Parent Subsidiary (In thousands) Company Companies Total -------------- -------------- -------------- 1995 $18 $90,993 $91,011 1996 20 91,687 91,707 1997 9 104,761 104,770 1998 -- 117,892 117,892 1999 -- 46,854 46,854 -------------- -------------- --------------
The Company maintains lines of credit with various domestic and foreign banks for borrowing funds on a short-term basis and has short-term working capital loans with domestic and foreign banks. At December 31, 1994, the weighted average interest rate for all short-term notes and loans payable was 11.7% (10.9% at December 31, 1993). 17 Note 9 -- Hedging Transactions At December 31, 1994, the Company had foreign exchange forward contracts to ensure conversion at an average exchange rate of 1.54 Deutsche mark for each U.S. dollar of approximately $179 million of foreign sales commitments for 1995. The Company also had purchased foreign currency options to ensure conversion at an average exchange rate of 1.60 Deutsche mark for each U.S. dollar of approximately $62 million of foreign sales commitments in the first half of 1995. The fair value of these contracts and options, based on quoted market prices, was not significant. Chiquita has interest rate swap agreements to fix the rate of interest on approximately $92 million of its variable rate ship and container loans maturing between 1998 and 2001. The Company has also entered into foreign currency swap agreements to convert $59 million of ship debt denominated in pounds sterling to U.S. dollar loans maturing in 2004 and 2005 in order to protect the Company from the risk that interest and principal repayments will be adversely affected by changes in exchange rates. The swap agreements have maturities which correspond with those of the underlying loans. The carrying values and estimated fair values of the Company's debt and associated swap agreements are summarized below:
December 31, December 31, 1994 1993 -------------- --------------- -------------- -------------- Carrying Estimated Carrying Estimated (In thousands) value fair value value fair value -------------- --------------- -------------- -------------- Debt $1,585,887 $1,531,400 $1,630,585 $1,693,800 Interest rate swap agreements -- (300) -- 10,700 Foreign currency swap agreements -- 400 -- (4,100) -------------- --------------- -------------- -------------- $1,585,887 $1,531,500 $1,630,585 $1,700,400 ============== =============== ============== ==============
Fair value for the Company's publicly traded debt is based on quoted market prices. Fair value for other debt is estimated based on the current rates offered to the Company for debt of similar maturities. The fair values of interest rate and foreign currency swap agreements are estimated based on the cost to terminate the agreements. The Company is exposed to credit loss in the event of nonperformance by counterparties on foreign exchange forward contracts, interest rate swap agreements and currency swap agreements. However, because the Company's hedging activities are transacted only with highly rated institutions, Chiquita does not anticipate nonperformance by any of these counterparties. The amount of any credit exposure is limited to unrealized gains on such contracts and swaps. Note 10 -- Pension and Severance Benefits The Company and its subsidiaries have several defined benefit and contribution pension plans covering approximately 6,000 domestic and foreign employees. Approximately 35,000 employees are covered by Central and South American severance plans. Pension plans covering eligible salaried employees and Central and South American severance plans for all employees call for benefits to be based upon years of service and compensation rates. 18 Pension and severance expense consists of the following:
(In thousands) 1994 1993 1992 ----------- ----------- ----------- Defined benefit and severance plans: Service cost -- benefits earned during the period $5,383 $5,885 $5,126 Interest cost on projected benefit obligation 8,412 8,423 7,784 Actual return on plan assets (623) (2,215) (1,868) Net amortization and deferral (1,181) (521) (566) ----------- ----------- ----------- 11,991 11,572 10,476 Defined contribution and multi-employer plans 3,648 3,669 4,304 ----------- ----------- ----------- Total pension and severance expense $15,639 $15,241 $14,780 =========== =========== ===========
The projected benefit obligations were determined using assumed discount rates of approximately 9 1/4% in 1994 and 1993 for unfunded Central and South American pension and severance benefits and approximately 7% in 1994 and 1993 for all other plan benefits. The assumed long-term rate of compensation increase was between 5% and 6% in 1994 and 1993 and the assumed long-term rate of return on plan assets was approximately 9% in 1994 and 1993. Pensions are funded in accordance with the requirements of the Employee Retirement Income Security Act or equivalent foreign regulations. Plan assets consist primarily of corporate debt, U.S. government and agency obligations and collective trust funds. Severance benefits in Central and South America are generally funded as benefits are paid. 19 The funded status of the Company's domestic and foreign defined benefit pension and severance plans is as follows:
Plans for which Plans for which Assets Exceed Accumulated Benefits Accumulated Benefits Exceed Assets at December 31, at December 31, -------------------------------- ----------------------------- (In thousands) 1994 1993 1994 1993 ------------ ------------ ------------ ------------ Plan assets at fair market value $15,193 $15,316 $22,587 $23,279 ------------ ------------ ------------ ------------ Present value of benefit obligations: Vested 13,875 13,807 67,056 67,221 Nonvested 37 7 4,182 3,738 ------------ ------------ ------------ ------------ Accumulated benefit obligation 13,912 13,814 71,238 70,959 Additional amounts related to projected pay increases 854 2,144 18,333 19,062 ------------ ------------ ------------ ------------ Projected benefit obligation 14,766 15,958 89,571 90,021 ------------ ------------ ------------ ------------ Projected benefit obligation less than (in excess of) plan assets 427 (642) (66,984) (66,742) Projected benefit obligation not yet recognized in the balance sheet: Net actuarial (gain) loss (414) 1,054 10,920 6,302 Prior service cost -- -- 2,333 2,684 Obligation (asset) at transition, net of amortization (45) (52) 6,295 7,805 ------------ ------------ ------------- ------------ Net balance sheet asset (liability) $ (32) $ 360 $ (47,436) $ (49,951) ============ ============ ============= ============
Note 11 -- Stock Options Under a non-qualified stock option plan, the Company may grant options to purchase up to an aggregate of 15,000,000 shares of capital stock. Under this plan and other formal stock option and incentive plans, options have been granted to directors, officers and other key employees to purchase shares of the Company's capital stock at the fair market value at the date of grant. The options may be exercised over a period not in excess of 20 years. 20
1994 1993 Option Option Shares Price Shares Price ------------- ----------------- ------------- ----------------- Under option at beginning of year 5,451,768 $5.75 - 47.75 5,969,996 $5.75 - 49.63 Options granted 287,165 11.44 - 17.06 3,282,765 10.19 - 14.25 Options exercised (118,133) 8.67 - 16.38 (17,120) 8.67 - 16.13 Options canceled or expired (407,042) 8.67 - 47.75 (3,783,873) 8.67 - 49.63 ------------- ----------------- ------------- ----------------- Under option at end of year 5,213,758 $5.75 - 34.44 5,451,768 $ 5.75 - 47.75 ------------- ----------------- ------------- ----------------- Options exercisable at end of year 2,234,823 1,517,236 ------------- ----------------- ------------- ----------------- Shares available for future grant 7,968,754 2,852,598 ------------- ----------------- ------------- -----------------
In 1993, in connection with a voluntary exchange offer, the Company canceled options for 2,298,186 shares at prices ranging from $15.81 to $49.63 issued in 1988 through 1992 and, in exchange, reissued options for 1,451,430 shares at a price of $10.31, the exchange date market value. Existing options were canceled at rates ranging from 1.5 to 2.0 outstanding option shares for each new option share granted pursuant to the offer. The new options vest over periods of up to nine years. Stock options for 297,573 shares were exercised during 1992 at prices ranging from $5.75 to $34.44 per share. Note 12 -- Shareholders' Equity At December 31, 1994, there were 150,000,000 authorized shares of capital stock. Of the shares authorized but unissued at December 31, 1994, approximately 54,000,000 shares were reserved for issuance upon conversion of other securities and under stock option and other employee benefit plans. In February 1994, the Company sold 2,875,000 shares of $2.875 Non-Voting Cumulative Preferred Stock, Series A, par value $1.00 per share (the "Series A Shares") for aggregate net proceeds of $138 million. The Series A Shares have a liquidation preference of $50.00 per share; pay an annual cash dividend of $2.875 per share; and are convertible into 2.6316 shares of capital stock at each holder's option. The Company may convert the Series A Shares at its option, under certain circumstances, after February 14, 1997. The Board of Directors has the authority to fix the terms of 7,125,000 additional shares of Non-Voting Cumulative Preferred Stock. The Company has 4,000,000 authorized shares of Cumulative Preference Stock, 1,000,000 of which have been designated as Series C Shares. In October 1992, Chiquita issued 648,310 shares of Mandatorily Exchangeable Cumulative Preference Stock, Series C (the "Series C Shares"), represented by 3,241,546 $1.32 depositary shares (the "Depositary Shares"), in exchange for 3,241,546 shares of the Company's capital stock. The Depositary Shares have one vote per share, voting with the capital stock; have a liquidation preference of $18.00 per share; pay annual dividends in cash or capital stock at the Company's option of $1.32 per share and will convert back into capital stock on September 7, 1995, or earlier at the Company's option or upon the occurrence 21 of certain events at a rate of one-for-one (except that the rate will be proportionately less than one-for-one if the market value of the capital stock exceeds $24.00 per share at the time of the conversion). In the third quarter of 1993, the Company began paying Series C dividends in capital stock. Holders of Series A and Depositary Shares have the right to elect additional directors in addition to the directors ordinarily elected by holders of capital stock and Depositary Shares in certain circumstances where the Company fails to pay quarterly dividends on the preferred and preference stock. In March 1992, the Company exchanged 2,694,136 shares of its capital stock for all of the outstanding common shares of Friday Canning Corporation, one of the largest U.S. private-label vegetable processors. The net assets of Friday at the time of the merger were $52 million and included $67 million of inventories and $19 million of notes and loans payable. This transaction was accounted for as a pooling of interests. Note 13 - Income Taxes Income taxes consist of the following:
United States (In thousands) Federal State Foreign Total -------- -------- -------- -------- 1994 Current tax expense $-- $1,024 $11,566 $12,590 Deferred tax expense -- -- 910 910 -------- -------- -------- -------- $-- $1,024 $12,476 $13,500 -------- -------- -------- -------- 1993 Current tax expense $-- $1,944 $13,247 $15,191 Deferred tax benefit -- -- (3,191) (3,191) -------- -------- -------- -------- $-- $1,944 $10,056 $12,000 -------- -------- -------- -------- 1992 Current tax expense $-- $468 $4,532 $5,000 Deferred tax expense -- -- -- -- -------- --------- -------- -------- $-- $468 $4,532 $5,000 -------- -------- -------- --------
22 Loss from continuing operations before income taxes consists of the following:
(In thousands) Subject to tax in: 1994 1993 1992 ------------ ------------ ------------- United States $(111,776) $(94,314) $(152,777) Foreign jurisdictions 40,965 55,233 (63,931) ------------ ------------ ------------- $(70,811) $(39,081) $(216,708) ------------ ------------- ------------
Income tax expense differs from income taxes computed at the U.S. federal statutory rate for the following reasons:
(In thousands) 1994 1993 1992 ------------ ------------ ------------ Income tax benefit computed at U.S. federal statutory rate $(24,784) $(13,678) $(73,681) State income taxes, net of federal benefit 666 1,264 309 U.S. losses for which no tax benefit has been recognized 34,012 19,694 34,310 Foreign losses for which no tax benefit has been recognized 19,406 13,166 44,347 Taxes on foreign operations at other than U.S. rates (19,914) (12,005) (1,482) Other 4,114 3,559 1,197 ------------ ------------ ------------ Income tax expense $13,500 $12,000 $5,000 ------------ ------------ ------------
The components of deferred income taxes included on the balance sheet at December 31, 1994 and 1993 are as follows:
(In thousands) 1994 1993 ----------- ----------- Deferred tax benefits Employee benefits $42,878 $51,389 Accrued expenses 26,775 27,043 Other 16,951 22,464 ------------ ----------- 86,604 100,896 Valuation allowance (14,442) (15,906) ----------- ----------- 72,162 84,990 ----------- -----------
23
Deferred tax liabilities Depreciation and amortization (23,959) (28,936) Growing crops (20,968) (22,454) Long-term debt (16,651) (19,281) Other (14,032) (16,318) ----------- ----------- (75,610) (86,989) ----------- ----------- Net deferred tax liability $(3,448) $(1,999) ----------- -----------
Net deferred taxes do not reflect the benefit that would be available to the Company from the use of its U.S. operating loss carryforwards of $202 million, alternative minimum tax credits of $5 million and foreign tax credit carryforwards of $66 million. The loss carryforwards expire in 2008 and 2009 and the foreign tax credit carryforwards expire between now and 1999. Undistributed earnings of foreign subsidiaries which have been, or are intended to be, permanently reinvested in operating assets, if remitted, are expected to result in little or no tax by operation of relevant statutes and the carryforward attributes described above. Cash payments for income taxes, net of refunds, were $12.1 million in 1994, $17.0 million in 1993 and $3.6 million in 1992. Note 14 -- Litigation A number of legal actions are pending against the Company. Based on evaluation of facts which have been ascertained, and on opinions of counsel, management does not believe such litigation will, individually or in the aggregate, have a material adverse effect on the financial statements of the Company. 24 Note 15 -- Quarterly Financial Data (Unaudited) The following quarterly financial data are unaudited, but in the opinion of management include all necessary adjustments for a fair presentation of the interim results, which are subject to significant seasonal variations.
1994 (In thousands, except per share amounts) March 31 June 30 Sept. 30 Dec. 31 --------------- ----------------- ----------- --------------- Net sales $669,168 $652,910 $557,414 $626,334 Cost of sales (485,095) (469,519) (495,250) (546,315) Operating income (loss) 81,183 70,133 (44,891) (35,240) Income (loss) from continuing operations 35,534 30,945 (80,652) (70,138) Discontinued operations -- -- -- 35,611 Extraordinary loss from prepayment of debt (22,840) -- -- -- Net income (loss) 12,694 30,945 (80,652) (34,527) Fully diluted earnings (loss) per share - Continuing operations .62 .51 (1.59) (1.38) - Discontinued operations -- -- -- .68 - Extraordinary item (.40) -- -- -- - Net income (loss) .22 .51 (1.59) (.70) Dividends per common share .05 .05 .05 .05 Capital stock market price High 19.25 17.63 17.00 16.50 Low 11.25 12.13 12.13 12.38 --------------- ----------------- ----------- --------------- 1993 (In thousands, except per share amounts) March 31 June 30 Sept. 30 Dec. 31 --------------- ----------------- ----------- --------------- Net sales $731,109 $682,352 $552,329 $567,135 Cost of sales (547,061) (535,555) (438,102) (472,834) Operating income (loss) 70,342 41,985 11,139 (19,618) Net income (loss) 27,530 7,673 (25,868) (60,416) Fully diluted earnings (loss) per share .53 .15 (.50) (1.17) Dividends per common share .17 .17 .05 .05 Capital stock market price High 17.50 15.63 14.00 11.88 Low 13.25 10.50 10.25 10.13 --------------- ----------------- ----------- ---------------
The operating loss for the quarter ended September 30, 1994 includes charges and losses totaling $57 million primarily resulting from write-downs associated with farms and cultivations in Honduras, shut-down costs, operating losses and charges for excess shipping capacity related to the reduction of the Company's Japanese "green" banana trading operations. For the quarter ended December 31, 1994, operating loss includes approximately $10 million of charges and losses primarily resulting from write-downs of ships held for sale and losses from the scale-back of the Company's Japanese "green" banana trading operations. Discontinued operations for the quarter ended December 31, 1994 includes a $10 million gain from the sale of the Meat Division's specialty meat operations. 25 A separate computation of earnings per share is made for each quarter presented. The dilutive effect on earnings per share resulting from the assumed conversions of preferred stock and convertible debt and exercise of stock options and warrants is included in each quarter in which dilution occurs. The earnings per share computation for the year is a separate annual calculation. Accordingly, the sum of the quarterly earnings per share amounts will not necessarily equal the earnings per share for the year. 26 CHIQUITA BRANDS INTERNATIONAL, INC. AND SUBSIDIARY COMPANIES SCHEDULE II - ALLOWANCE FOR DOUBTFUL ACCOUNTS RECEIVABLE (in thousands)
Year Ended December 31, ------------------------------------------- 1994 1993 1992 -------- -------- ------- Balance at beginning of period $12,393 $11,040 $ 8,542 -------- -------- ------- Additions: Charged to costs and expenses $ 6,966 $ 4,797 $ 6,300 -------- -------- ------- Deductions: Write-offs $ 6,330 $ 3,220 $ 4,182 Other, net (31) 224 (380) -------- -------- ------- 6,299 3,444 3,802 -------- -------- ------- Balance at end of period $13,060 $12,393 $11,040 ======== ======== =======
EX-13.2 4 EXHIBIT 13.2 1 CHIQUITA BRANDS INTERNATIONAL, INC. EXHIBIT 11.1 COMPUTATION OF EARNINGS PER COMMON SHARE (In thousands, except per share amounts)
Year Ended December 31, ------------------------------------------------------------------- 1994 1993 1992 1991 1990 ---- ---- ---- ---- ---- A. Computation of primary earnings (loss) per common share: ------------------------------- Income (loss) from continuing operations $(84,311) $(51,081) $(221,708) $110,909 $95,831 Dividends on Series A Preferred Stock (7,232) -- -- -- -- -------- -------- --------- -------- ------- Income (loss) from continuing operations available to common shares (91,543) (51,081) (221,708) 110,909 95,831 Discontinued operations 35,611 -- (62,332) 17,586 (1,913) -------- -------- --------- -------- ------- Income (loss) available to common shares before extraordinary item $(55,932) $(51,081) $(284,040) $128,495 $93,918 Extraordinary loss from prepayment of debt (22,840) -- -- -- -- -------- -------- --------- -------- ------- Net income (loss) used to calculate primary earnings per share $(78,772) $(51,081) $(284,040) $128,495 $93,918 ======== ======== ========= ======== ======= Shares used in calculation of per share data: Weighted average common and equivalent Series C preference shares outstanding 52,033 51,427 51,804 47,834 40,100 Dilutive effect of assumed exercise of certain stock options and warrants -- -- -- 2,548 1,989 -------- -------- -------- ------- ------- Weighted average common shares used to calculate primary earnings (loss) per share 52,033 51,427 51,804 50,382 42,089 ======== ======== ======== ======= ======= Primary earnings (loss) per common share: -- Continuing operations $ (1.76) $ (.99) $ (4.28) $ 2.20 $ 2.28 -- Discontinued operations .69 -- (1.20) .35 (0.05) -- Extraordinary item (.44) -- -- -- -- -------- -------- -------- ------- ------- -- Net income (loss) $ (1.51) $ (.99) $ (5.48) $ 2.55 $ 2.23 ======== ======== ======== ======= =======
2 CHIQUITA BRANDS INTERNATIONAL, INC. COMPUTATION OF EARNINGS PER COMMON SHARE (In thousands, except per share amounts)
Year Ended December 31, ---------------------------------------------------- 1994 1993 1992 1991 1990 ---- ---- ---- ---- ---- B. Computation of fully diluted earnings (loss) per common share: ------------------------------------- Income (loss) from comtinuing operations $(84,311) $(51,081) $(221,708) $110,909 $95,831 Dividends on Series A Preferred Stock (7,232) -- -- -- -- -------- -------- --------- -------- ------- Income (loss) from continuing operations available to common shares (91,543) (51,081) (221,708) 110,909 95,831 Additional income as a result of assumed conversion of convertible debentures -- -- -- 4,836 1,175 -------- -------- --------- -------- ------- Income (loss) from continuing operations used to calculate fully diluted earnings per share (91,543) (51,081) (221,708) 115,745 97,006 Discontinued operations 35,611 -- (62,332) 17,586 (1,913) -------- -------- --------- -------- ------- Income (loss) available to common shares before extraodinary item (55,932) (51,081) (284,040) 133,331 95,093 Extraordinary loss from prepayment of debt (22,840) -- -- -- -- -------- -------- --------- -------- ------- Net income (loss) used to calculate fully diluted earnings per share $(78,772) $(51,081) $(284,040) $133,331 $95,093 ======== ======== ========= ======== ======= Shares used in calculation of per share data: Weighted average common shares used to calculate primary earnings (loss) per share 52,033 51,427 51,804 50,382 42,089 Additional shares resulting from assumed exercise of options and assumed conversions of convertible subordinated debentures -- -- -- 2,530 1,201 -------- -------- --------- -------- ------- Weighted average common shares used to calculate fully diluted earnings (loss) per share 52,033 51,427 51,804 52,912 43,290 ======== ======== ========= ======== ======= Fully diluted earnings (loss) per common share: -- Continuing operations $ (1.76) $ (.99) $ (4.28) $ 2.19 $ 2.24 -- Discontinued operations .69 -- (1.20) .33 (.04) -- Extraodinary item (.44) -- -- -- -- -------- -------- --------- -------- ------- -- Net income (loss) $ (1.51) $ (.99) $ (5.48) $ 2.52 $ 2.20 ======== ======== ========= ======== =======
3 CHIQUITA BRANDS INTERNATIONAL, INC. ----------------------------------- CONSOLIDATED STATEMENT OF INCOME (Unaudited) -------------------------------------------- (In thousands, except per share amounts)
Nine Months Ended September 30, ------------- 1995 1994 ---- ---- NET SALES $1,970,793 $1,879,492 ---------- ---------- Operating expenses Cost of sales 1,481,215 1,449,864 Selling, general and administrative 243,789 243,313 Depreciation 74,064 79,890 ----------- ----------- 1,799,068 1,773,067 ---------- ---------- OPERATING INCOME 171,725 106,425 Interest income 22,387 15,458 Interest expense (123,793) (125,558) Other income, net 997 3,002 ------------ ------------ Income (loss) from continuing operations before income taxes 71,316 (673) Income taxes (13,900) (13,500) ------------ ----------- Income (loss) from continuing operations 57,416 (14,173) Discontinued operations 3,351 -- ------------ -------------- Income (loss) before extraordinary item 60,767 (14,173) Extraordinary loss from debt refinancing (4,713) (22,840) ------------ ----------- NET INCOME (LOSS) $ 56,054 $ (37,013) =========== =========== Weighted average number of common shares outstanding (see Exhibit 11) 53,585 51,939 =========== =========== Earnings (loss) per common share: Primary - Continuing operations $ .96 $ (.37) - Discontinued operations .06 -- - Extraordinary item (.09) (.44) ------------- ------------- - Net income (loss) $ .93 $ (.81) ============= ============= Fully diluted - Continuing operations $ .94 $ (.37) - Discontinued operations .05 -- - Extraordinary item (.08) (.44) ------------- ------------- - Net income (loss) $ .91 $ (.81) ============= ============= Dividends per common share $ .15 $ .15 ============= =============
See Notes to Consolidated Financial Statements. 4 CHIQUITA BRANDS INTERNATIONAL, INC. ------------------------------------ CONSOLIDATED BALANCE SHEET (Unaudited) -------------------------------------- (In thousands, except share amounts)
September 30, December 31, September 30, 1995 1994 1994 ------------- ------------ ------------- ASSETS - - - ------ CURRENT ASSETS Cash and equivalents $ 223,675 $ 165,523 $ 151,292 Trade receivables (less allowances of $13,361, $13,060 and $13,477) 210,769 205,194 223,723 Other receivables, net 86,963 92,725 95,450 Inventories 312,483 308,549 318,765 Other current assets 33,858 32,334 33,367 -------------- --------------- --------------- TOTAL CURRENT ASSETS 867,748 804,325 822,597 Restricted cash 69,530 75,030 69,592 Net assets of discontinued operations 51,061 46,718 20,481 Property, plant and equipment, net 1,271,034 1,387,132 1,433,196 Investments and other assets 327,537 301,776 294,160 Intangibles, net 154,757 159,258 157,969 -------------- --------------- --------------- TOTAL ASSETS $ 2,741,667 $ 2,774,239 $ 2,797,995 ============== =============== =============== LIABILITIES AND SHAREHOLDERS' EQUITY - - - ------------------------------------ CURRENT LIABILITIES Notes and loans payable $ 114,381 $ 130,040 $ 115,042 Long-term debt due within one year 66,230 91,011 89,182 Accounts payable 221,111 232,535 216,785 Accrued liabilities 139,519 120,305 111,697 -------------- --------------- --------------- TOTAL CURRENT LIABILITIES 541,241 573,891 532,706 Long-term debt of parent company 840,783 840,377 840,251 Long-term debt of subsidiaries 475,896 524,459 553,963 Accrued pension and other employee benefits 74,001 74,855 75,037 Other liabilities 115,377 115,848 119,299 -------------- --------------- --------------- TOTAL LIABILITIES 2,047,298 2,129,430 2,121,256 -------------- --------------- --------------- SHAREHOLDERS' EQUITY Preferred and preference stock 138,369 190,639 190,639 Capital stock, $.33 par value (53,807,078, 49,300,881 and 48,893,012 shares) 17,936 16,434 16,298 Capital surplus 567,005 505,800 500,553 Retained deficit (13,817) (52,940) (12,822) Minimum pension liability adjustment for discontinued operations (15,124) (15,124) (17,929) -------------- --------------- --------------- TOTAL SHAREHOLDERS' EQUITY 694,369 644,809 676,739 -------------- --------------- --------------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 2,741,667 $ 2,774,239 $ 2,797,995 ============== =============== ===============
See Notes to Consolidated Financial Statements. 5 CHIQUITA BRANDS INTERNATIONAL, INC. ----------------------------------- CONSOLIDATED STATEMENT OF CASH FLOW (Unaudited) ----------------------------------------------- (In thousands)
Nine Months Ended September 30, ----------------------------------------- 1995 1994 ------------- --------------- CASH PROVIDED (USED) BY: Operations Income (loss) from continuing operations $ 57,416 $ (14,173) Depreciation and amortization 78,437 84,633 Write-downs of farms and cultivations -- 24,600 Changes in current assets and liabilities (22,840) (30,953) Other (13,057) 2,272 ------------- -------------- CASH FLOW FROM OPERATIONS 99,956 66,379 ------------- -------------- Investing Capital expenditures (47,145) (115,790) Sales of fresh fruit shipping and distribution assets 102,708 -- Restricted cash deposits 5,500 (18,572) Acquisitions and long-term investments -- (386) Other (2,159) (6,944) ------------- -------------- CASH FLOW FROM INVESTING 58,904 (141,692) ------------- -------------- Financing Debt transactions Issuances of long-term debt 202,356 263,745 Repayments of long-term debt (281,034) (326,208) Increase (decrease) in notes and loans payable (8,432) 4,159 Stock transactions Issuance of preferred stock -- 138,369 Issuances of capital stock 2,093 3,242 Dividends (13,732) (11,928) ------------- -------------- CASH FLOW FROM FINANCING (98,749) 71,379 ------------- -------------- Discontinued operations (1,959) 4,000 ------------- -------------- Increase in cash and equivalents 58,152 66 Balance at beginning of period 165,523 151,226 ------------- -------------- Balance at end of period $ 223,675 $ 151,292 ============= ==============
See Notes to Consolidated Financial Statements. 6 CHIQUITA BRANDS INTERNATIONAL, INC. ----------------------------------- NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) ----------------------------------------------------- Interim results are subject to significant seasonal variations and are not necessarily indicative of the results of operations for a full fiscal year. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary for a fair statement of the results of the interim periods shown have been made. See Notes to Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 1994 for additional information relating to the Company's financial statements. Inventories consist of the following (in thousands):
September 30, December 31, September 30, 1995 1994 1994 ------------- ------------ ------------ Bananas and other fresh produce $ 37,821 $ 42,444 $ 38,536 Other food products 81,489 68,713 80,129 Growing crops 116,046 115,177 115,208 Materials and supplies 62,889 68,062 71,630 Other 14,238 14,153 13,262 ------------ ------------ ------------ $ 312,483 $ 308,549 $ 318,765 ============ ============ ============
During the second quarter of 1995, the Company replaced $153 million of ship loans with loans having longer maturities totaling $187 million resulting in an extraordinary loss of $4.7 million. The Company also negotiated an extension of the maturities on another $23 million ship loan. In the first quarter of 1994, the Company completed the sale of $175 million principal amount of 9-1/8% Senior Notes due 2004 and 2,875,000 shares of $2.875 Non-Voting Cumulative Preferred Stock, Series A. Most of the net proceeds from the offerings were used to prepay higher rate subordinated debentures. These refinancings resulted in an extraordinary loss of $22.8 million. In accordance with its long-standing policy to periodically hedge transactions denominated in foreign currencies, at September 30, 1995, the Company had foreign exchange forward contracts to ensure conversion of approximately $95 million of foreign sales commitments for the remainder of 1995 at an average exchange rate of 1.51 Deutsche marks per dollar. The fair value of these contracts, based on quoted market prices, was approximately $5 million. The Company also had option contracts which ensure conversion through 1996 of approximately $95 million of foreign sales at a rate not higher than 1.44 Deutsche marks per dollar and approximately $175 million of foreign sales at a rate not higher than 1.45 Deutsche marks per dollar or lower than 1.33 Deutsche marks per dollar. The carrying value of the option contracts, and the fair value based on quoted market prices, were not significant. On September 7, 1995, $52.3 million of Series C Mandatorily Exchangeable Cumulative Preference Stock converted back into 3,241,546 shares of Chiquita's capital stock in accordance with the terms of the Series C Preference shares. -----END PRIVACY-ENHANCED MESSAGE-----