EX-99.1 2 dex991.htm REGULATION FD DISCLOSURE Regulation FD disclosure

Exhibit 99.1

 

UNAUDITED PRO FORMA FINANCIAL INFORMATION

 

The unaudited pro forma condensed combined financial statement information set forth below is presented to reflect the pro forma effects of the following transactions (the “Transactions”):

 

  •   the proposed acquisition (the “Acquisition”) of the Fresh Express packaged salad and fresh-cut fruit business from Performance Food Group Company (“PFG”). The purchase price for the acquisition is $855 million in cash, subject to adjustments and

 

  •   the offering of $225 million of senior notes, our entry into a new senior secured credit facility and initial borrowings of $500 million and recent borrowings of $50 million under Chiquita’s indirect, wholly-owned subsidiary’s new $80 million secured revolving credit facility secured by six of the subsidiary’s vessels (the “Ship Facility”). We intend to use the proceeds from the sale of the senior notes, together with initial borrowings under the credit facilities and cash on hand, to fund the acquisition of Fresh Express and pay an estimated $30 million of fees and expenses.

 

The unaudited pro forma condensed combined statement of income for the year ended December 31, 2004 combines our historical consolidated statement of income for the fiscal year ended December 31, 2004, with the historical combined statement of earnings of Fresh Express for the fiscal year ended January 1, 2005, and gives effect to the unaudited pro forma adjustments necessary to account for the Transactions, in each case as if they had occurred on January 1, 2004.

 

The unaudited pro forma condensed combined statement of income for the quarter ended March 31, 2005 combines our historical consolidated statement of income for the quarter ended March 31, 2005, with the historical combined statement of earnings of Fresh Express for the quarter ended April 2, 2005, and gives effect to the unaudited pro forma adjustments necessary to account for the Transactions, in each case as if they had occurred on January 1, 2004.

 

The unaudited pro forma condensed combined statement of income for the quarter ended March 31, 2004 combines our historical consolidated statement of income for the quarter ended March 31, 2004, with the historical combined statement of earnings of Fresh Express for the quarter ended April 3, 2004, and gives effect to the unaudited pro forma adjustments necessary to account for the Transactions, in each case as if they occurred on January 1, 2004.

 

The unaudited pro forma condensed combined balance sheet as of March 31, 2005 combines our historical consolidated balance sheet as of March 31, 2005, with the historical combined balance sheet of Fresh Express as of April 2, 2005, and gives effect to the unaudited pro forma adjustments necessary to account for the Transactions, in each case as if they had occurred on March 31, 2005.

 

The Acquisition will be accounted for under the purchase method of accounting in accordance with accounting principles generally accepted in the United States of America. Accordingly, Fresh Express’s operating results will be included in our operating results upon closing of the transaction.

 

The unaudited pro forma adjustments related to the Acquisition are based on, preliminary purchase price allocations. Actual adjustments will be based on analyses of fair values of assets acquired and liabilities assumed, including acquired contracts, identifiable tangible and intangible assets, pensions and deferred tax assets and liabilities, and estimates of the useful lives of tangible and amortizable intangible assets, which will be completed after we obtain third-party appraisals, review all available data and conclude our own internal assessments. Differences between the preliminary and final purchase price allocations could have significant impact on the accompanying unaudited pro forma condensed combined financial statement information and our future results of operations and financial position.

 

The unaudited pro forma condensed combined financial statement information is based on, and should be read together with, our and Fresh Express’s historical financial statements.

 

CHIQUITA BRANDS INTERNATIONAL, INC.

 

UNAUDITED PRO FORMA

CONDENSED COMBINED INCOME STATEMENT

 

For the quarter ended March 31, 2005

(in thousands, except for per share data)

 

     Historical
     Pro Forma
Adjustments(a)
    

Pro Forma

Chiquita

  
     Chiquita
    

Fresh

Express

      

Net sales

    $ 931,829     $ 247,284     $ —       $ 1,179,113  

Operating expenses

                                 

Cost of sales

      751,386       183,806       (7,265 )(b)     927,927  

Selling, general and administrative

      77,603       50,957       707  (c)     129,267  

Depreciation

      10,949       —         5,099  (d)     16,048  

Amortization

      —         —         2,942  (e)     2,942  

Equity in earnings of investees

      (1,807 )     —         —         (1,807 )

Corporate allocation

      —         2,469       (2,469 )(f)     —    
    
 
 
 
       838,131       237,232       (986 )     1,074,377  
    
 
 
 

Operating income

      93,698       10,052       986       104,736  

Interest income

      1,895       —         —         1,895  

Interest expense

      (7,552 )     (6,178 )     (7,108 )(g)     (20,838 )

Other income (expense), net

      —         387       (387 )(h)     —    
    
 
 
 

Income (loss) before income taxes

      88,041       4,261       (6,509 )     85,793  

Income taxes

      (1,500 )     (1,549 )     1,317  (i)     (1,732 )
    
 
 
 

Net income (loss)

    $ 86,541     $ 2,712     $ (5,192 )   $ 84,061  
    
 
 
 

Net income per common share

                                 

Basic

    $ 2.12                     $ 2.06  

Diluted

    $ 1.94                     $ 1.89  

 

CHIQUITA BRANDS INTERNATIONAL, INC.

 

NOTES TO UNAUDITED PRO FORMA

CONDENSED COMBINED INCOME STATEMENT

 

(a)   The unaudited pro forma adjustments above give effect to the Transactions as if the Transactions had occurred on January 1, 2004. The unaudited pro forma adjustments related to the Acquisition are based on preliminary purchase price allocations. Actual adjustments will be completed after we obtain third-party appraisals, review all available data and conclude our internal assessment. The actual amounts recorded when the combination transactions are completed may differ materially from the pro forma amounts presented.

 

(b)   Represents the reclassification to conform to Chiquita presentation, from cost of sales to depreciation expense ($6.9) million of Fresh Express’s depreciation expense and from other income (expense) to cost of sales ($0.4) million of Fresh Express’s other income.

 

(c)   Represents the reclassification to conform to Chiquita presentation, from selling, general and administrative expense to depreciation expense ($1.3) million of Fresh Express’s depreciation expense and to amortization expense ($1.1) million of Fresh Express’s amortization expense and from corporate allocation to selling, general and administrative expense $2.5 million of certain corporate costs allocated to Fresh Express from its parent company. Also, includes $0.6 million of costs related to stock options expense to conform Fresh Express’s accounting treatment of stock options to Chiquita’s accounting treatment as an expense.

 

(d)   Represents the reclassification to conform to Chiquita presentation, from cost of sales to depreciation expense $6.9 million of Fresh Express’s depreciation expense and from selling, general and administrative expense to depreciation expense $1.3 million of Fresh Express’s depreciation expense. Also, includes ($3.1) million decrease in depreciation expense related to the preliminarily appraised fair market value and estimated remaining useful lives of the property, plant and equipment acquired in the Acquisition.

 

(e)   Represents the reclassification to conform to Chiquita presentation, from selling, general and administrative expense to amortization expense $1.1 million of Fresh Express’s amortization expense. Also, includes $1.8 million of incremental amortization expense related to preliminarily appraised amortizable intangible assets acquired in the Acquisition.

 

(f)   Represents the reclassification to conform to Chiquita presentation, from corporate allocation to selling, general and administrative certain corporate costs allocated to Fresh Express from its parent company.

 

(g)   Represents the elimination of $6.2 million of interest expense related to Fresh Express debt balances that will not be assumed by Chiquita or will be paid by PFG as provided for in the Stock Purchase Agreement, dated February 22, 2005 by and between Chiquita and PFG (the “Agreement”). Also, includes (i) additional ($12.6) million of interest expense to give effect to the issuance of the senior notes, initial borrowings under the new senior secured credit facility and recent, incremental borrowings under the Ship Facility and (ii) amortization of new debt issuance costs totaling ($0.7) million. For each 1/8% change in applicable interest rate, pro forma interest expense for the quarter ended March 31, 2005 would change approximately $0.2 million.

 

(h)   Represents the reclassification to conform to Chiquita presentation, from other income (expense) to cost of sales ($0.4) million of Fresh Express’s other income.

 

(i)   Represents $1.3 million income tax effect of the pro forma adjustments. Fresh Express’s federal taxable income and a significant portion of Fresh Express’s state taxable income is offset by Chiquita’s current federal and state tax losses on a pro forma basis. This adjustment further reflects a valuation allowance recorded against the net deferred tax benefit. The pro forma income tax (expense) benefit is not indicative of future taxable (expense) benefit. Future taxable (expense) benefit is conditioned upon a number of factors including tax loss carryforwards, the level and mix of income among various domestic and foreign jurisdictions in which the Company operates, expected future taxable income and future taxable deductions, among other things.

 

CHIQUITA BRANDS INTERNATIONAL, INC.

 

UNAUDITED PRO FORMA

CONDENSED COMBINED INCOME STATEMENT

 

For the year ended December 31, 2004

(in thousands, except for per share data)

 

     Historical
     Pro Forma
Adjustments(a)
     Pro Forma
Chiquita
  
     Chiquita
     Fresh Express
      

Net sales

    $ 3,071,456     $ 989,042     $ —       $ 4,060,498  

Operating expenses

                                 

Cost of sales

      2,616,900       746,139       (25,166 )(b)     3,337,873  

Selling, general and administrative

      304,106       193,637       3,290  (c)     501,033  

Depreciation

      41,583       —         20,399  (d)     61,982  

Amortization

      —         —         11,766  (e)     11,766  

Equity in earnings of investees

      (11,173 )     —         —         (11,173 )

Loss on sale of Colombian division

      9,289       —         —         9,289  

Gain on sale of Armuelles division

      (2,196 )     —         —         (2,196 )

Corporate allocation

      —         9,971       (9,971 )(f)     —    
    
 
 
 
       2,958,509       949,747       318       3,908,574  
    
 
 
 

Operating income (loss)

      112,947       39,295       (318 )     151,924  

Interest income

      6,167       —         —         6,167  

Interest expense

      (38,884 )     (19,688 )     (30,321 )(g)     (88,893 )

Other income (expense), net

      (19,428 )     572       (572 )(h)     (19,428 )
    
 
 
 

Income (loss) before income taxes

      60,802       20,179       (31,211 )     49,770  

Income taxes

      (5,400 )     (7,892 )     7,063  (i)     (6,229 )
    
 
 
 

Net income (loss)

    $ 55,402     $ 12,287     $ (24,148 )   $ 43,541  
    
 
 
 

Net income per common share

                                 

Basic

    $ 1.36                     $ 1.07  

Diluted

    $ 1.33                     $ 1.04  

 

CHIQUITA BRANDS INTERNATIONAL, INC.

 

NOTES TO UNAUDITED PRO FORMA

CONDENSED COMBINED INCOME STATEMENT

 

(a)   The unaudited pro forma adjustments above give effect to the Transactions as if the Transactions had occurred on January 1, 2004. The unaudited pro forma adjustments related to the Acquisition are based on preliminary purchase price allocations. Actual adjustments will be completed after we obtain third-party appraisals, review all available data and conclude our internal assessment. The actual amounts recorded when the combination transactions are completed may differ materially from the pro forma amounts presented.

 

(b)   Represents the reclassification to conform to Chiquita presentation, from cost of sales to depreciation expense ($24.6) million of Fresh Express’s depreciation expense and from other income (expense) to cost of sales ($0.6) million of Fresh Express’s other income.

 

(c)   Represents the reclassification to conform to Chiquita presentation, from selling, general and administrative expense to depreciation expense ($4.6) million of Fresh Express’s depreciation expense and to amortization expense ($4.5) million of Fresh Express’s amortization expense and from corporate allocation to selling, general and administrative expense $10.0 million of certain corporate costs allocated to Fresh Express from its parent company. Also, includes $2.4 million of costs related to stock options expense to conform Fresh Express’s accounting treatment of stock options to Chiquita’s accounting treatment as an expense.

 

(d)   Represents the reclassification to conform to Chiquita presentation, from cost of sales to depreciation expense $24.6 million of Fresh Express’s depreciation expense and from selling, general and administrative expense to depreciation expense $4.6 million of Fresh Express’s depreciation expense. Also, includes ($8.8) million decrease in depreciation expense related to the preliminarily appraised fair market value and estimated remaining useful lives of the property, plant and equipment acquired in the Acquisition.

 

(e)   Represents the reclassification to conform to Chiquita presentation, from selling, general and administrative expense to amortization expense $4.5 million of Fresh Express’s amortization expense. Also, includes $7.3 million of incremental amortization expense related to preliminarily appraised amortizable intangible assets acquired in the Acquisition.

 

(f)   Represents the reclassification to conform to Chiquita presentation, from corporate allocation to selling, general and administrative expense certain corporate costs allocated to Fresh Express from its parent company.

 

(g)   Represents the elimination of $19.7 million of interest expense related to Fresh Express debt balances that will not be assumed by Chiquita as provided for in the Agreement. Also, includes (i) additional ($47.2) million of interest expense to give effect to the issuance of the senior notes, initial borrowings under the new senior secured credit facility and recent, incremental borrowings under the Ship Facility and (ii) amortization of new debt issuance costs totaling ($2.8) million. For each 1/8% change in applicable interest rate, pro forma interest expense for the year ended December 31, 2004 would change by approximately $0.7 million.

 

(h)   Represents the reclassification to conform to Chiquita presentation, from other income (expense) to cost of sales ($0.6) million of Fresh Express’s other income.

 

(i)   Represents $7.1 million income tax effect of the pro forma adjustments. Fresh Express’s federal taxable income and a significant portion of Fresh Express’s state taxable income is offset by Chiquita’s current federal and state tax losses on a pro forma basis. This adjustment further reflects a valuation allowance recorded against the net deferred tax benefit. The pro forma income tax (expense) benefit is not indicative of future taxable (expense) benefit. Future taxable (expense) benefit is conditioned upon a number of factors including tax loss carryforwards, the level and mix of income among various domestic and foreign jurisdictions in which the Company operates, expected future taxable income and future taxable deductions, among other things.

 

CHIQUITA BRANDS INTERNATIONAL, INC.

 

UNAUDITED PRO FORMA

CONDENSED COMBINED INCOME STATEMENT

 

For the quarter ended March 31, 2004

(in thousands, except for per share data)

 

     Historical
     Pro Forma
Adjustments(a)
    

Pro Forma

Chiquita

  
     Chiquita
    

Fresh

Express

      

Net sales

    $ 793,168     $ 244,725     $ —       $ 1,037,893  

Operating expenses

                                 

Cost of sales

      680,138       184,260       (5,778 )(b)     858,620  

Selling, general and administrative

      72,819       49,422       633   (c)     122,874  

Depreciation

      10,835       —         5,104   (d)     15,939  

Amortization

      —         —         2,942   (e)     2,942  

Equity in earnings of investees

      (2,419 )     —         —         (2,419 )

Corporate allocation

      —         2,467       (2,467 )(f)     —    
    
 
 
 
       761,373       236,149       434       997,956  
    
 
 
 

Operating income (loss)

      31,795       8,576       (434 )     39,937  

Interest income

      786       —         —         786  

Interest expense

      (10,169 )     (4,673 )     (5,849 )(g)     (20,691 )

Other income (expense), net

      —         310       (310 )(h)     —    
    
 
 
 

Income (loss) before income taxes

      22,412       4,213       (6,593 )     20,032  

Income taxes

      (2,500 )     (1,671 )     1,496   (i)     (2,675 )
    
 
 
 

Net income (loss)

    $ 19,912     $ 2,542     $ (5,097 )   $ 17,357  
    
 
 
 

Net income per common share

                                 

Basic

    $ 0.49                     $ 0.43  

Diluted

    $ 0.46                     $ 0.40  

 

CHIQUITA BRANDS INTERNATIONAL, INC.

 

NOTES TO UNAUDITED PRO FORMA

CONDENSED COMBINED INCOME STATEMENT

 

(a)   The unaudited pro forma adjustments above give effect to the Transactions as if the Transactions had occurred on January 1, 2004. The unaudited pro forma adjustments related to the Acquisition are based on preliminary purchase price allocations. Actual adjustments will be completed after we obtain third-party appraisals, review all available data and conclude our internal assessment. The actual amounts recorded when the combination transactions are completed may differ materially from the pro forma amounts presented.

 

(b)   Represents the reclassification to conform to Chiquita presentation, from cost of sales to depreciation expense ($5.5) million of Fresh Express’s depreciation expense and from other income (expense) to cost of sales ($0.3) million of Fresh Express’s other income.

 

(c)   Represents the reclassification to conform to Chiquita presentation, from selling, general and administrative expense to depreciation expense ($1.3) million of Fresh Express’s depreciation expense and to amortization expense ($1.1) million of Fresh Express’s amortization expense and from corporate allocation to selling, general and administrative expense $2.4 million of certain corporate costs allocated to Fresh Express from its parent company. Also, includes $0.6 million of costs related to stock options expense to conform Fresh Express’s accounting treatment of stock options to Chiquita’s accounting treatment as an expense.

 

(d)   Represents the reclassification to conform to Chiquita presentation, from cost of sales to depreciation expense $5.5 million of Fresh Express’s depreciation expense and from selling, general and administrative expense to depreciation expense $1.3 million of Fresh Express’s depreciation expense. Also, includes ($1.7) million decrease in depreciation expense related to the preliminarily appraised fair market value and estimated remaining useful lives of the property, plant and equipment acquired in the Acquisition.

 

(e)   Represents the reclassification to conform to Chiquita presentation, from selling, general and administrative expense to amortization expense $1.1 million of Fresh Express’s amortization expense. Also, includes $1.8 million of incremental amortization expense related to preliminarily appraised amortizable intangible assets acquired in the Acquisition.

 

(f)   Represents the reclassification to conform to Chiquita presentation, from corporate allocation to selling, general and administrative certain corporate costs allocated to Fresh Express from its parent company.

 

(g)   Represents the elimination of $4.5 million of interest expense related to Fresh Express debt balances that will not be assumed by Chiquita or will be paid by PFG as provided for in the Agreement. Also, includes (i) additional ($9.8) million of interest expense to give effect to the issuance of the senior notes, initial borrowings under the new senior secured credit facility and recent, incremental borrowings under the Ship Facility and (ii) amortization of new debt issuance costs totaling ($0.7) million. For each 1/8% change in applicable interest rate, pro forma interest expense for the quarter ended March 31, 2004 would change approximately $0.2 million.

 

(h)   Represents the reclassification to conform to Chiquita presentation, from other income (expense) to cost of sales ($0.3) million of Fresh Express’s other income.

 

(i)   Represents $1.5 million income tax effect of the pro forma adjustments. Fresh Express’s federal taxable income and a significant portion of Fresh Express’s state taxable income is offset by Chiquita’s current federal and state tax losses on a pro forma basis. This adjustment further reflects a valuation allowance recorded against the net deferred tax benefit. The pro forma income tax (expense) benefit is not indicative of future taxable (expense) benefit. Future taxable (expense) benefit is conditioned upon a number of factors including tax loss carryforwards, the level and mix of income among various domestic and foreign jurisdictions.

 

CHIQUITA BRANDS INTERNATIONAL, INC.

 

UNAUDITED PRO FORMA

CONDENSED COMBINED BALANCE SHEET

 

As of March 31, 2005

(in thousands)

 

     Historical
           
     Chiquita
    Fresh
Express
    Pro Forma
Adjustments(a)
     Pro Forma
Chiquita

ASSETS

                             

Current Assets:

                             

Cash and equivalents

    $ 161,017    $ 3,921    $ (113,921 )(b)   $ 51,017

Trade receivables, net

      463,639      80,489      —         544,128

Other receivables, net

      94,707      1,291      5,923  (c)     101,921

Inventories

      207,015      21,220      (5,923 )(c)     222,312

Other current assets

      48,023      13,470      (7,660 )(d)     53,833
    
  
  
 

Total current assets

      974,401      120,391      (121,581 )     973,211

Property, plant and equipment, net

      410,737      190,734      26,571  (e)     628,042

Investments and other assets, net

      145,548      2,773      20,000  (f)     168,321

Trademarks

      387,585      64,182      (2,182 )(e)     449,585

Goodwill

      49,183      232,473      312,583  (g)     594,239

Other intangible assets, net

      —        65,105      106,895  (e)     172,000
    
  
  
 

Total Assets

    $ 1,967,454    $ 675,658    $ 342,286     $ 2,985,398
    
  
  
 

LIABILITIES AND SHAREHOLDERS’ EQUITY

                             

Current Liabilities:

                             

Notes and loans payable

    $ 11,165    $ —      $ —       $ 11,165

Long-term debt of subsidiaries due within one year

      22,056      275      13,525  (h)     35,856

Accounts payable

      413,104      59,763      —         472,867

Due to PFG, net

      —        3,807      (3,807 )(i)     —  

Accrued liabilities

      101,002      58,802      30,000  (j)     189,804
    
  
  
 

Total current liabilities

      547,327      122,647      39,718       709,692

Long-term debt of parent company

      250,000      —        225,000  (h)     475,000

Long-term debt of subsidiaries

      58,522      14,725      521,475  (h)     594,722

Loan payable to PFG, net

      —        358,523      (358,523 )(i)     —  

Accrued pension, deferred taxes and other liabilities

      159,158      75,404      18,975  (d)     253,537
    
  
  
 

Total Liabilities

      1,015,007      571,299      446,645       2,032,951
    
  
  
 

Shareholders’ equity:

                             

Common stock

      416      —        —         416

PFG’s net investment

      —        104,359      (104,359 )(k)     —  

Capital surplus

      665,038      —        —         665,038

Retained earnings

      244,756      —        —         244,756

Accumulated other comprehensive income

     42,237      —        —         42,237
    
  
  
 

Total shareholders’ equity

      952,447      104,359      (104,359 )     952,447
    
  
  
 

Total liabilities and shareholders’ equity

    $ 1,967,454    $ 675,658    $ 342,286     $ 2,985,398
    
  
  
 

 

CHIQUITA BRANDS INTERNATIONAL, INC.

 

NOTES TO UNAUDITED PRO FORMA

CONDENSED COMBINED BALANCE SHEET

 

(a) The total estimated consideration as shown in the table below is allocated to the assets and liabilities of Fresh Express as if the transaction had occurred on March 31, 2005. The allocation set forth below is preliminary. The unaudited pro forma condensed combined balance sheet assumes that the historical values of Fresh Express’s current assets and current liabilities approximate fair value. The actual amounts recorded when the combination transactions are completed may differ materially from the pro forma amounts presented below:

 

Total purchase price ($ in millions):

       

Cash

    $ 855

Estimated fees and expenses

      30
    
     $ 885
    

 

Preliminary allocation of purchase price ($ in millions):

         

Estimated adjustments to reflect assets and liabilities at fair value:

         

Historical value of assets acquired (excluding goodwill)

    $ 443.2  

Historical value of liabilities acquired

      (571.3 )

Elimination of loan payable and trade payable to PFG

      362.3  

Elimination of long-term debt of Fresh Express subsidiaries

      15.0  

Adjustment to deferred taxes

      (26.6 )

Elimination of cash to be retained by PFG

      (3.9 )

Estimated fair value adjustment for property, plant & equipment

      26.6  

Estimated acquisition financing costs

      20.0  

Estimated expenses for lease cancellations, plant consolidations, severance, and certain other exit activities of the acquired company

      (30.0 )

Estimated fair value adjustment for trademarks

      (2.2 )

Estimated fair value adjustment for other intangible assets

      106.9  

Goodwill acquired

      545.0  
    
     $ 885.0  
    

 

(b) Represents use of ($110.0) million of cash on hand to fund the Acquisition and the elimination of ($3.9) million of cash that will not be purchased by Chiquita as provided in the Agreement.

 

(c) Represents reclassification to conform to Chiquita presentation, from inventories to other receivables advances paid to growers in order to procure supplies of raw product.

 

(d) Represents the deferred tax effect of the pro forma adjustments.

 

(e) Represents the estimated adjustment for the preliminary fair market value of property, plant and equipment, trademarks and other intangibles including customer relationships and patents. This adjustment is preliminary and is based on management’s estimates and the preliminary work of independent appraisals. The actual adjustment may differ materially and will be based on final valuations.

 

(f) Represents capitalization of financing costs related to the issuance of the senior notes, our new senior secured credit facility and the Ship Facility, to be amortized over their respective terms.

 

(g) Represents estimated adjustment for the preliminary fair market value of incremental goodwill associated with the Acquisition. This adjustment is preliminary and is based on management’s estimates and the preliminary work of independent appraisals. The actual adjustment may differ materially and will be based on final valuations.

 

(h) Represents issuance of $225 million of senior notes, the entry into a new senior secured credit facility and initial borrowings of $500 million and the entry into the Ship Facility and recent borrowings of $50 million thereunder, offset by ($15) million aggregate principal amount of Fresh Express indebtedness of which, on the closing date of the Acquisition, PFG will irrevocably deposit such amount of funds necessary to prepay such indebtedness and any related fees and expenses.

 

(i) Represents the elimination of payable owed to PFG that will not be assumed by Chiquita, as provided for in the Agreement.

 

(j) Represents estimated expenses for severance, lease exits and certain other exit activities of Fresh Express. Management’s estimate of costs to exit certain Fresh Express activities is preliminary. Actual costs may vary significantly from the preliminary estimate and will be based upon a formal plan of exit authorized by executives of appropriate authority after the consummation of the Acquisition.

 

(k) Represents elimination of historical shareholders’ equity of Fresh Express.