EX-99.1 3 dex991.htm UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Unaudited Pro Forma Condensed Consolidated Financial Statements

Exhibit 99.1

UNAUDITED PRO FORMA FINANCIAL STATEMENTS

The following unaudited pro forma condensed consolidated financial statements have been prepared to reflect the August 19, 2008 sale of Atlanta AG and subsidiaries (“Atlanta”) and certain related real property assets to Univeg Fruit & Vegetables B.V. as described in Item 2.01 of the Current Report on Form 8-K dated August 19, 2008 (the “Sale”).

The Unaudited Pro Forma Condensed Consolidated Income Statement for the six-months ended June 30, 2008 and years ended December 31, 2007, 2006 and 2005 are based on Chiquita Brands International, Inc.’s (“Chiquita” or the “company”) historical consolidated income statements, and give effect to the disposition transaction as if it had occurred on January 1, 2005. For the period ended June 30, 2008, Atlanta’s results of operations were presented as discontinued operations in the company’s Quarterly Report on Form 10-Q, in accordance with Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”. Therefore, the pro forma elimination of historical results of Atlanta is not necessary for that period. The Unaudited Pro Forma Condensed Consolidated Balance Sheet as of June 30, 2008 is based on Chiquita’s historical balance sheet as of that period, and gives effect to the disposition transaction as if it had occurred on June 30, 2008.

The unaudited pro forma condensed consolidated financial statements presented below are based on the assumptions and adjustments described in the accompanying notes and do not reflect any adjustments for non-recurring items or changes in operating strategies arising as a result of the disposition. These pro forma financial statements include no assumptions regarding the use of proceeds, which are presented as additional retained cash on the Unaudited Pro Forma Condensed Consolidated Balance Sheet. Accordingly, the actual effect of the Sale, due to this and other factors, could differ from the pro forma adjustments presented herein. However, management believes that the assumptions used and the adjustments made are reasonable under the circumstances and given the information available.

These unaudited pro forma condensed consolidated financial statements are presented for illustrative purposes only and are not necessarily indicative of the operating results or the financial position that would have been achieved had the Sale been consummated as of the dates indicated or of the results that may be obtained in the future. These unaudited pro forma condensed consolidated financial statements and the accompanying notes should be read together with Chiquita’s audited consolidated financial statements and accompanying notes as of and for the year ended December 31, 2007, and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in Chiquita’s Annual Report on Form 10-K for the year ended December 31, 2007, as well as in conjunction with Chiquita’s unaudited condensed consolidated financial statements and accompanying notes as of and for the period ended June 30, 2008, and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in Chiquita’s Quarterly Report on Form 10-Q for the period ended June 30, 2008.


CHIQUITA BRANDS INTERNATIONAL, INC.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED INCOME STATEMENT

For the six-months ended June 30, 2008

(in thousands, except for per share data)

 

     Historical
Chiquita
    Pro Forma
Adjustments
    Pro Forma
Chiquita
 

Net sales

   $ 1,930,073     $ —       $ 1,930,073  
                        

Operating expenses

      

Cost of sales

     1,588,316       (702 (f)     1,587,614  

Selling, general and administrative

     180,261       —         180,261  

Depreciation

     33,456       —         33,456  

Amortization

     4,911       —         4,911  

Equity in earnings of investees

     (6,086 )     —         (6,086 )
                        
     1,800,858       (702 )     1,800,156  
                        

Operating income

     129,215       702       129,917  

Interest income

     3,082       —         3,082  

Interest expense

     (43,375 )     —         (43,375 )

Other income

     8,622       —         8,622  
                        

Income from continuing operations before income taxes

     97,544       702       98,246  

Income taxes

     (5,700 )     —         (5,700 )
                        

Income from continuing operations

   $ 91,844     $ 702     $ 92,546  
                        

Earnings per common share:

      

Basic

   $ 2.13       $ 2.14  

Diluted

     2.06         2.07  

Weighted average shares outstanding:

      

Basic

     43,183         43,183  

Diluted

     44,750         44,750  


CHIQUITA BRANDS INTERNATIONAL, INC.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED INCOME STATEMENT

For the year ended December 31, 2007

(in thousands, except for per share data)

 

     Historical
Chiquita
    Pro Forma
Adjustments (b)
    Pro Forma
Chiquita
 

Net sales

   $ 4,662,785     $ (1,198,082 )   $ 3,464,703  
                        

Operating expenses

      

Cost of sales

     4,082,921       (1,134,676 (f)     2,948,245  

Selling, general and administrative

     433,062       (58,347 )     374,715  

Depreciation

     79,499       (7,096 )     72,403  

Amortization

     9,823       —         9,823  

Equity in earnings of investees

     441       —         441  

Restructuring

     25,912       —         25,912  
                        
     4,631,658       (1,200,119 )     3,431,539  
                        

Operating income

     31,127       2,037       33,164  

Interest income

     10,603       (823 )     9,780  

Interest expense

     (87,071 )     880       (86,191 )

Other income

     —         —         —    
                        

Income from continuing operations before income taxes

     (45,341 )     2,094       (43,247 )

Income taxes

     (3,700 )     2,800       (900 )
                        

Income from continuing operations

   $ (49,041 )   $ 4,894     $ (44,147 )
                        

Earnings per common share:

      

Basic

   $ (1.22 )     $ (1.04 )

Diluted

     (1.22 )       (1.04 )

Weighted average shares outstanding:

      

Basic

     42,493         42,493  

Diluted

     42,493         42,493  


CHIQUITA BRANDS INTERNATIONAL, INC.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED INCOME STATEMENT

For the year ended December 31, 2006

(in thousands, except for per share data)

 

     Historical
Chiquita
    Pro Forma
Adjustments(b)
    Pro Forma
Chiquita
 

Net sales

   $ 4,499,084     $ (1,233,290 )   $ 3,265,794  
                        

Operating expenses

      

Cost of sales

     3,960,489       (1,175,870 (f)     2,784,619  

Selling, general and administrative

     416,480       (53,165 )     363,315  

Depreciation

     77,812       (6,430 )     71,382  

Amortization

     9,730       —         9,730  

Equity in earnings of investees

     (5,937 )     —         (5,937 )

Goodwill impairment charge

     42,793       (42,793 )     —    

Charge for contingent liability

     25,000       —         25,000  
                        
     4,526,367       (1,278,258 )     3,248,109  
                        

Operating income

     (27,283 )     44,968       17,685  

Interest income

     9,006       (395 )     8,611  

Interest expense

     (85,663 )     716       (84,947 )

Other income

     6,320       —         6,320  
                        

Income from continuing operations before income taxes

     (97,620 )     45,289       (52,331 )

Income taxes

     2,100       (4,200 )     (2,100 )
                        

Income from continuing operations

   $ (95,520 )   $ 41,089     $ (54,431 )
                        

Earnings per common share:

      

Basic

   $ (2.27 )     $ (1.29 )

Diluted

     (2.27 )       (1.29 )

Weighted average shares outstanding:

      

Basic

     42,084         42,084  

Diluted

     42,084         42,084  


CHIQUITA BRANDS INTERNATIONAL, INC.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED INCOME STATEMENT

For the year ended December 31, 2005

(in thousands, except for per share data)

 

     Historical
Chiquita
    Pro Forma
Adjustments (b)
    Pro Forma
Chiquita
 

Net sales

   $ 3,904,361     $ (1,238,136 )   $ 2,666,225  
                        

Operating expenses

      

Cost of sales

     3,268,128       (1,167,113 (f)     2,101,015  

Selling, general and administrative

     384,184       (49,233 )     334,951  

Depreciation

     59,763       (7,224 )     52,539  

Amortization

     5,253       —         5,253  

Equity in earnings of investees

     (600 )     —         (600 )
                        
     3,716,728       (1,223,570 )     2,493,158  
                        

Operating income

     187,633       (14,566 )     173,067  

Interest income

     10,255       (559 )     9,696  

Interest expense

     (60,294 )     620       (59,674 )

Other income

     (3,054 )     —         (3,054 )
                        

Income from continuing operations before income taxes

     134,540       (14,505 )     120,035  

Income taxes

     (3,100 )     1,100       (2,000 )
                        

Income from continuing operations

   $ 131,440     $ (13,405 )   $ 118,035  
                        

Earnings per common share:

      

Basic

   $ 3.16       $ 2.84  

Diluted

     2.92         2.62  

Weighted average shares outstanding:

      

Basic

     41,601         41,601  

Diluted

     45,071         45,071  


CHIQUITA BRANDS INTERNATIONAL, INC.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

As of June 30, 2008

(in thousands, except for per share data)

 

     Historical
Chiquita
   Pro Forma
Adjustments
    Pro Forma
Chiquita

ASSETS

       

Current assets

       

Cash and equivalents

   $ 202,654    $  98,672   (a)   $ 301,326

Trade receivables (less allowances of $10,919)

     353,587      —         353,587

Other receivables, net

     101,320      —         101,320

Inventories

     216,201      —         216,201

Prepaid expenses

     37,873      —         37,873

Other current assets

     62,984      —         62,984

Current assets of discontinued operations

     231,766      (231,766 (b)     —  
                     

Total current assets

     1,206,385      (133,094 )     1,073,291

Property, plant and equipment, net

     329,302      —         329,302

Investments and other assets, net

     178,879      8,689   (c)     187,568

Trademarks

     449,085      —         449,085

Goodwill

     552,761      —         552,761

Other intangible assets, net

     139,141      —         139,141

Non-current assets of discontinued operations

     105,985      (105,985 (b)     —  
                     

Total assets

   $ 2,961,538    $ (230,390 )   $ 2,731,148
                     

LIABILITIES AND SHAREHOLDERS’ EQUITY

       

Current liabilities

       

Notes and loans payable

   $ —      $ —       $ —  

Long-term debt of subsidiaries due within one year

     10,836      —         10,836

Accounts payable

     365,129      —         365,129

Accrued liabilities

     146,991      —         146,991

Current liabilities of discontinued operations

     173,971      (173,971 (b)     —  
                     

Total current liabilities

     696,927      (173,971 )     522,956

Long-term debt of parent company

     675,000      —         675,000

Long-term debt of subsidiaries

     187,898      —         187,898

Accrued pension and other employee benefits

     56,028      —         56,028

Deferred gain – sale of shipping fleet

     85,993      —         85,993

Net deferred tax liability

     106,859      (391 ) (g)     106,468

Other liabilities

     74,565      9,066   (d)     83,631

Non-current liabilities of discontinued operations

     11,612      (11,612 (b)     —  
                     

Total liabilities

     1,894,882      (176,908 )     1,717,974
                     

Commitments and contingencies

       

Shareholders’ equity

       

Common stock, $0.01 par value (44,142,849, shares outstanding)

     441      —         441

Capital surplus

     711,178      —         711,178

Retained earnings

     198,689      4,851   (e)(g)     203,540

Accumulated other comprehensive income of continuing operations

     98,015      —         98,015

Accumulated other comprehensive income of discontinued operations

     58,333      (58,333 (b)     —  
                     

Total shareholders’ equity

     1,066,656      (53,482 )     1,013,174
                     

Total liabilities and shareholders’ equity

   $ 2,961,538    $ (230,390 )   $ 2,731,148
                     


CHIQUITA BRANDS INTERNATIONAL, INC.

NOTES TO UNAUDITED PRO FORMA

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

(a) Represents sales proceeds less certain transaction costs based on the euro exchange rate of $1.58 at June 30, 2008.

 

(b) Reflects the elimination of the financial results of operations, assets, liabilities and accumulated other comprehensive income amounts associated with the discontinued operations of Atlanta in accordance with Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.”

 

(c) Represents cash held in escrow based on the euro exchange rate of $1.58 at June 30, 2008 to secure, for an 18 month period, any potential obligations of the Seller under the Agreement.

 

(d) This adjustment, which is calculated based on the euro exchange rate of $1.58 at June 30, 2008, reflects a liability, the amortization of which will reduce cost of sales over the first five years of the long-term strategic agreement under which Univeg will continue to serve as Chiquita’s preferred supplier of banana ripening and distribution services in Germany, Austria and Denmark.

 

(e) Represents the recognition of a gain, based on the euro exchange rate of $1.58 at June 30, 2008, which would have been realized upon the disposition of Atlanta had the transaction closed on June 30, 2008.

 

(f) Reflects the amortization of a liability related to the ripening and distribution agreement (see (d) above). The calculation of the liability and amortization thereof is based on the euro exchange rate of $1.36 as of January 1, 2005. The amounts included for the amortization of the liability in the Unaudited Pro Forma Condensed Consolidated Income Statements are $1.5 million, $1.7 million and $1.9 million for the years ended December 31, 2007, 2006 and 2005, respectively, and $0.7 million for the six months ended June 30, 2008.

 

(g) Reflects the tax benefit from the reversal of certain valuation allowances.