FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the Quarterly Period Ended Commission File
June 30, 1997 Number 1-1550
CHIQUITA BRANDS INTERNATIONAL, INC.
Incorporated under the IRS Employer I.D.
Laws of New Jersey No. 04-1923360
250 East Fifth Street, Cincinnati, Ohio 45202
(513) 784-8000
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days. YES X NO
As of August 1, 1997, there were 56,283,637 shares of Common Stock
outstanding.
Page 1 of 11 Pages<PAGE>
CHIQUITA BRANDS INTERNATIONAL, INC.
TABLE OF CONTENTS
Page(s)
PART I - Financial Information
Consolidated Statement of Income for the quarters and
six months ended June 30, 1997 and 1996 . . . . . . . . . . . . . 3
Consolidated Balance Sheet as of June 30, 1997,
December 31, 1996 and June 30, 1996 . . . . . . . . . . . . . . . 4
Consolidated Statement of Cash Flow for the six months
ended June 30, 1997 and 1996 . . . . . . . . . . . . . . . . . . . 5
Notes to Consolidated Financial Statements . . . . . . . . . . . . . 6
Management's Analysis of Operations and Financial Condition . . . . 7-8
PART II - Other Information
Item 4 - Submission of Matters to a Vote of Security Holders . . . . 8
Item 6 - Exhibits and Reports on Form 8-K . . . . . . . . . . . . . 8
Signature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
<PAGE>
Part I - Financial Information
<TABLE>
<CAPTION> CHIQUITA BRANDS INTERNATIONAL, INC.
CONSOLIDATED STATEMENT OF INCOME (Unaudited)
(In thousands, except per share amounts)
Quarter Ended June 30, Six Months Ended June 30,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Net sales $ 646,233 $ 713,698 $ 1,277,643 $ 1,338,504
---------- ---------- ------------ -----------
Operating expenses
Cost of sales 484,036 534,591 948,107 1,006,590
Selling, general and administrative 72,834 81,319 147,212 154,554
Depreciation 21,466 22,668 43,041 44,379
---------- ---------- ------------ -----------
578,336 638,578 1,138,360 1,205,523
---------- ---------- ------------ -----------
Operating income 67,897 75,120 139,283 132,981
Interest income 4,247 7,671 8,633 15,011
Interest expense (27,320) (34,949) (55,778) (70,116)
Other income, net 159 247 439 441
---------- ---------- ------------ -----------
Income before income taxes 44,983 48,089 92,577 78,317
Income taxes (3,900) (5,000) (8,200) (11,000)
---------- ---------- ------------ -----------
Income before extraordinary item 41,083 43,089 84,377 67,317
Extraordinary loss from debt refinancing -- (5,556) -- (5,556)
---------- ---------- ------------ -----------
Net income $ 41,083 $ 37,533 $ 84,377 $ 61,761
========== ========== ============ ===========
Shares used to calculate earnings
per common share:
Primary 57,264 55,984 57,108 55,952
========== ========== ============ ===========
Fully diluted 72,496 63,550 72,506 63,689
========== ========== ============ ===========
Earnings per common share:
Primary - Income before
extraordinary item $ .64 $ .73 $ 1.33 $ 1.13
- Extraordinary item -- (.10) -- (.10)
---------- ---------- ---------- ----------
- Net income $ .64 $ .63 $ 1.33 $ 1.03
========== ========== ========== ==========
Fully diluted - Income before
extraordinary item $ .57 $ .68 $ 1.16 $ 1.06
- Extraordinary item -- (.09) -- (.09)
---------- ---------- ---------- ----------
- Net income $ 57 $ .59 $ 1.16 $ .97
========== ========== ========== ==========
Dividends per common share $ .05 $ .05 $ .10 $ .10
========== ========== ========== ==========
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
CHIQUITA BRANDS INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEET (Unaudited)
(In thousands, except share amounts)
June 30, December 31, June 30,
1997 1996 1996
<S> <C> <C> <C>
ASSETS
Current assets
Cash and equivalents $ 233,077 $ 285,558 $ 205,338
Marketable securities -- -- 66,865
Trade receivables (less allowances
of $9,599, $9,832 and $11,105) 197,458 162,566 218,451
Other receivables, net 72,739 91,126 87,023
Inventories 250,136 275,177 251,280
Other current assets 33,644 29,884 30,767
---------- ---------- ----------
Total current assets 787,054 844,311 859,724
Restricted cash -- -- 39,520
Property, plant and equipment, net 1,130,785 1,139,677 1,158,226
Investments and other assets 312,912 319,149 352,049
Intangibles, net 156,701 163,797 166,150
---------- ---------- ----------
Total assets $ 2,387,452 $ 2,466,934 $ 2,575,669
========== ========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Notes and loans payable $ 27,110 $ 78,107 $ 91,565
Long-term debt due within one year 97,489 56,982 53,762
Accounts payable 199,281 193,875 224,959
Accrued liabilities 90,033 135,370 108,425
---------- ---------- ----------
Total current liabilities 413,913 464,334 478,711
Long-term debt of parent company 697,788 704,763 780,663
Long-term debt of subsidiaries 299,577 374,488 394,515
Accrued pension and other employee benefits 86,127 83,797 86,420
Other liabilities 89,679 115,299 107,952
---------- ---------- ----------
Total liabilities 1,587,084 1,742,681 1,848,261
---------- ---------- ----------
Shareholders' equity
Preferred stock 249,256 249,256 138,369
Capital stock, $.33 par value (56,249,551,
55,841,384 and 55,561,291 shares) 18,750 18,614 18,520
Capital surplus 600,540 594,885 583,861
Accumulated deficit (68,178) (138,502) (13,342)
---------- ---------- ----------
Total shareholders' equity 800,368 724,253 727,408
---------- ---------- ----------
Total liabilities and shareholders' equity $ 2,387,452 $ 2,466,934 $ 2,575,669
========== ========== ==========
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
CHIQUITA BRANDS INTERNATIONAL, INC.
CONSOLIDATED STATEMENT OF CASH FLOW (Unaudited)
(In thousands)
Six Months Ended June 30,
1997 1996
<S> <C> <C>
Cash provided (used) by:
Operations
Income before extraordinary item $ 84,377 $ 67,317
Depreciation and amortization 45,739 48,141
Write-down of Costa Rican banana
producing assets -- 8,900
Changes in current assets and liabilities
Receivables (29,156) (32,541)
Inventories 24,604 42,099
Accounts payable 15,010 18,832
Other current assets and liabilities (39,928) (15,712)
Other (2,308) (1,803)
---------- ----------
Cash flow from operations 98,338 135,233
---------- ----------
Investing
Capital expenditures (34,319) (32,652)
Refundable deposits for container equipment (8,589) --
Investment in Japanese joint venture (4,474) --
Proceeds from sale of non-core assets -- 5,350
Increase in marketable securities -- (39,235)
Other (1,328) 1,373
---------- ----------
Cash flow from investing (48,710) (65,164)
---------- ----------
Financing
Debt transactions
Issuances of long-term debt -- 23,738
Repayments of long-term debt (42,112) (94,219)
Decrease in notes and loans payable (50,248) (25,497)
Stock transactions
Issuances of capital stock 4,304 4,238
Dividends (14,053) (9,666)
---------- ----------
Cash flow from financing (102,109) (101,406)
---------- ----------
Decrease in cash and equivalents (52,481) (31,337)
Balance at beginning of period 285,558 236,675
---------- ----------
Balance at end of period $ 233,077 $ 205,338
========== ==========
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
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, 1996 for additional information relating to the Company's
financial statements.
Inventories consist of the following (in thousands):
<TABLE>
<CAPTION>
June 30, December 31, June 30,
1997 1996 1996
<S> <C> <C> <C>
Bananas and other fresh produce $ 34,774 $ 34,557 $ 34,670
Other food products 44,852 66,929 35,774
Growing crops 113,359 114,425 120,086
Materials and supplies 49,064 49,699 50,415
Other 8,087 9,567 10,335
$ 250,136 $275,177 $ 251,280
</TABLE>
The Company has a long-standing policy of periodically entering into
foreign exchange forward contracts and purchasing currency options to hedge
transactions denominated in foreign currencies. These forward contracts and
options are specifically designated as hedges and offset the losses or gains
from currency risk associated with the hedged transactions. The Company does
not enter into forward contracts or options for speculative purposes. Amounts
paid for options and any gains realized thereon, as well as any gains or
losses realized prior to the maturity of forward contracts used to hedge firm
commitments, are deferred until the hedged transaction occurs. These deferred
amounts, along with gains or losses on forward contracts held to maturity, are
included in the measurement of the transaction being hedged. Gains and losses
on forward contracts used to hedge transactions where a firm commitment does
not exist are included in income on a current basis.
At June 30, 1997, the Company had option contracts which ensure
conversion of approximately $175 million of foreign sales through the end of
1997 at a rate of 1.55 Deutsche marks per dollar and approximately $175
million of foreign sales in 1998 at rates not higher than 1.64 Deutsche marks
per dollar or lower than 1.50 Deutsche marks per dollar. At June 30, 1997,
the carrying value of these option contracts was approximately $4 million and
their fair value based on quoted market prices was approximately $28 million.
In February 1997, the Financial Accounting Standards Board issued
Statement No. 128, "Earnings per Share," which the Company is required to
adopt on December 31, 1997. At that time, the Company will be required to
change the method currently used to compute earnings per share and to restate
all prior periods. Statement No. 128 is not expected to have a material
effect on the Company's earnings per share. <PAGE>
CHIQUITA BRANDS INTERNATIONAL, INC.
MANAGEMENT'S ANALYSIS OF
OPERATIONS AND FINANCIAL CONDITION
OPERATIONS
Net sales for the quarter and first half ended June 30, 1997 decreased
9.5% and 4.5% from the corresponding periods last year. The decrease in sales
for the second quarter resulted primarily from lower volume in low-margin
produce distribution operations, deconsolidation of Japanese banana operations
(which are now operated through a joint venture and accounted for under the
equity method), and the impact of a stronger dollar. None of these items
individually caused a material decrease in sales.
First quarter banana volume in 1997 was higher than in 1996; second
quarter volume in 1997 was comparable to the 1996 level. Available supplies
of bananas have been somewhat limited during 1997 as a result of prior year
weather-related disruptions.
Operating income for the 1997 second quarter decreased by $7 million from
the prior year to $68 million, while first half operating income in 1997
increased $6 million to $139 million. First half operating income in 1996
included write-downs and costs of $12 million resulting from flood damage in
Costa Rica during the 1996 first quarter. Operating income in 1997 was
adversely affected by a stronger dollar, mitigated in part by the Company's
foreign currency hedging program.
Net interest expense for the second quarter and first half of 1997
decreased by $4 million (15%) and $8 million (14%) from the prior year levels
as a result of the Company's debt reduction and refinancing activities.
The Company's effective tax rate is affected by the level and mix of
income among various domestic and foreign jurisdictions in which the Company
operates.
FINANCIAL CONDITION
Cash decreased by $52 million in the first half of 1997 primarily due to
prepayments of debt. As a result of debt reduction and refinancing
activities, debt has decreased by $92 million since December 31, 1996 to $1.1
billion at June 30, 1997.
OTHER
Reference is made to the discussion of the European Union ("EU") banana
quota and licensing regime, the Framework Agreement and the pending World
Trade Organization ("WTO") proceeding regarding this regime contained in Part
I, Item 1 - "Business-Risks of International Operations" in the Company's 1996
Form 10-K and "Management's Analysis of Operations and Financial Condition" in
the Company's 1996 Annual Report to Shareholders. In May 1997, the WTO panel
hearing the case issued its final report, finding that the licensing and quota
systems under the EU regime and the Framework Agreement violate numerous
international trade obligations to the detriment of Latin American supplying
<PAGE>
countries and U.S. marketing firms such as Chiquita. The report recommends
that the WTO request the EU to bring its import regime for bananas into
conformity with these obligations. In June 1997, the EU appealed the report,
and oral hearings on the appeal were held in July. A decision on the appeal
is expected in September 1997, with adoption of the final report expected in
October. If the final report is upheld on appeal, the EU would be required,
within one month following its adoption, to indicate whether it will comply
with the final report, in which case the parties would have a "reasonable"
period of time (not to exceed 15 months) to implement the report's
recommendations. Alternatively, if the EU refused to fully comply with the
final report, it could offer to pay compensation to the injured governments
and, if that compensation were unacceptable to the governments, they could
engage in retaliatory trade measures against the EU. There can be no
assurance as to the ultimate outcome of the WTO proceedings, including the
appeal of the final report, the nature and extent of any actions that may be
taken by the affected countries or the impact on the EU quota regime or the
Framework Agreement.
Part II - Other Information
Item 4 - Submission of Matters to a Vote of Security Holders
In connection with the election of eight directors of the Company,
proxies were solicited pursuant to Regulation 14 under the Securities
Exchange Act of 1934 and the following votes were cast at the Company's
Annual Meeting of Shareholders held on May 14, 1997:
Name Votes For Votes Withheld
Carl H. Lindner 48,956,500 744,000
Keith E. Lindner 48,962,660 737,840
Fred J. Runk 48,984,227 716,273
Jean Head Sisco 48,982,956 717,544
William W. Verity 48,969,944 730,556
Oliver W. Waddell 48,984,591 715,909
Ronald F. Walker* 48,992,687 707,813
Steven G. Warshaw 48,977,576 722,924
*Mr. Walker, a director of the Company since 1984, passed away on
May 15, 1997; the Board of Directors is now comprised of seven
members.
The remaining 6,532,710 shares outstanding on the record date were not
voted.<PAGE>
Item 6 - Exhibits and Reports on Form 8-K
Page
Number(s)
(a) Exhibit 10-g - Amended and Restated Deferred Compensation Plan . . . **
Exhibit 11 - Computation of Earnings Per Common Share . . . . .10-11
Exhibit 27 - Financial Data Schedule . . . . . . . . . . . . . . . **
** Copy omitted from this Quarterly Report on Form 10-Q. Copy included
in report filed electronically with the Securities and Exchange
Commission.
(b) There were no reports on Form 8-K filed by the Company during the
quarter ended June 30, 1997.<PAGE>
SIGNATURE
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 thereunto duly authorized.
CHIQUITA BRANDS INTERNATIONAL, INC.
By: /s/ William A. Tsacalis
William A. Tsacalis
Vice President and Controller
(Chief Accounting Officer)
August 7, 1997<PAGE>
Exhibit 10g
1997 AMENDED AND RESTATED
CHIQUITA BRANDS INTERNATIONAL, INC.
DEFERRED COMPENSATION PLAN
Effective as of January 1, 1997<PAGE>
1997 Amended and Restated
Chiquita Brands International, Inc.
Deferred Compensation Plan
TABLE OF CONTENTS
Section Page
1. Establishment and Purpose . . . . . . . . . . . . . . . . . . . . 1
2. Plan Objectives . . . . . . . . . . . . . . . . . . . . . . . . . 1
3. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . 1-3
4. Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
5. Participation . . . . . . . . . . . . . . . . . . . . . . . . . . 3
6. Deferred Compensation Account . . . . . . . . . . . . . . . . . . 3
7. Deferral Sources and Matching Contributions . . . . . . . . . . 3-4
8. Deferral Term . . . . . . . . . . . . . . . . . . . . . . . . . . 4
9. Interest Indices . . . . . . . . . . . . . . . . . . . . . . . . 5
10. Payment Form and Method . . . . . . . . . . . . . . . . . . . . . 5
11. Account Statement . . . . . . . . . . . . . . . . . . . . . . . . 5
12. Account Distribution . . . . . . . . . . . . . . . . . . . . . . 5
13. Hardship Distributions . . . . . . . . . . . . . . . . . . . . . 6
14. Beneficiary Designation . . . . . . . . . . . . . . . . . . . . . 6
15. General Provisions . . . . . . . . . . . . . . . . . . . . . . 6-7
<PAGE>
1997 Amended and Restated
Chiquita Brands International, Inc.
Deferred Compensation Plan
(effective January 1, 1997)
1. Establishment and Purpose
1.1 Effective January 1, 1997, Chiquita Brands International,
Inc., a New Jersey corporation, adopts this 1997 Amended and
Restated Chiquita Brands International, Inc. Deferred
Compensation Plan to enable eligible Associates of the Company
and certain of its subsidiaries and affiliates to elect
deferral of payment of their compensation.
1.2 A Participant's deferrals prior to January 1, 1997, shall be
governed by the Plan that was in effect prior to January 1,
1997.
2. Plan Objectives
2.1 The purpose of this Plan is to allow Participants to achieve
the following objectives:
(a) Accumulate income for retirement; and
(b) Provide opportunity for financial growth.
3. Definitions
When used in this Plan, the following words and phrases shall have
the following meanings:
3.1 Account means the record maintained for each Participant to
which all deferrals, investment indices and distributions are
credited and debited for each Plan Year.
3.2 Administrator means the Employee Benefits Committee appointed
by the Company's Board of Directors.
3.3 Annual Bonus means the annual lump-sum Total Compensation
Review Bonus Award made in addition to a Participant's Base
Salary.
3.4 Associate means an employee of the Company.
3.5 Base Salary means base pay, excluding any bonuses, commissions
and other extraordinary payments.<PAGE>
3.6 Company means Chiquita Brands International, Inc. and (unless
the context indicates otherwise) its subsidiaries and
affiliates which have not adopted a separate deferred
compensation plan.
3.7 Compensation means Base Salary and Annual Bonus earned for
services rendered during a given Plan Year.
3.8 Disabled and Disability mean that a Participant, as a result
of accident or illness, is physically, mentally or emotionally
unable to perform the duties for which the Participant is
employed, and in the Administrator's opinion is likely to
remain so Disabled for at least one year. The Administrator
shall make all determinations as to whether a Participant is
Disabled and shall use such evidence, including independent
medical reports and data, as the Administrator deems necessary
and desirable.
3.9 Excess 401(k) Deferral means the excess, if any, of (i) the
amount a Qualified Participant elects to defer under the
Savings Plan, over (ii) the limitations (as adjusted) on
deferrals contained in Sections 401(a)(17) and 402(g) of the
Internal Revenue Code of 1986, as amended.
3.10 Expiration Date means, with respect to each annual deferral
under Section 7.1, the earlier of (i) the last day of the year
to which a Participant elects to defer Compensation pursuant
to Section 8.1, or (ii) the date on which a Participant dies,
becomes Disabled or terminates employment with the Company.
3.11 Matching Contributions means, with respect to each Qualified
Participant in a Plan Year, Company contributions to the Plan,
in respect of the Participant's contributions under Section
7.1, equal to the difference, if any, between the following
two amounts: (i) the total of the Basic Matching Contribution
and Discretionary Matching Contribution (the "Contributions")
such Participant would have received for such Plan Year under
the Savings Plan, up to the 6% limit imposed by the Savings
Plan, if such Contributions were determined without respect to
cumulative annual Base Salary without applying the limitations
on compensation and contributions in Sections 401(a)(17) and
402(g) of the Internal Revenue Code of 1986, as amended, and
(ii) the actual Contributions on behalf of such Participant
under the Savings Plan for that Plan Year.
3.12 Participant means an officer or other highly compensated
Associate who is selected or entitled to participate and
participates in the Plan for a designated Plan Year.
3.13 Plan means this 1997 Amended and Restated Chiquita Brands
International, Inc. Deferred Compensation Plan.<PAGE>
3.14 Plan Year means the calendar year, January 1 through December
31.
3.15 Savings Plan means the Chiquita Savings and Investment Plan.
3.16 Qualified Participant means a Participant whose Base Salary
exceeds the limitation on compensation in Section 401(a)(17)
of the Internal Revenue Code of 1986, as amended, who elects
to defer Excess 401(k) Deferrals under this Plan, and
participates in the Savings Plan for the entire year and does
not change his or her percentage of compensation contributed
to the Savings Plan for the entire Plan Year.
4. Eligibility
4.1 Officers and other highly compensated Associates of the
Company will be eligible to become Participants in the Plan
either through annual invitation by the President of the
Company or through an employment agreement approved by the
President.
5. Participation
5.1 A Participant elects to participate in the Plan by delivering
to the Administrator, before the beginning of each Plan Year,
a properly completed enrollment form.
5.2 The enrollment form shall conform to the terms and conditions
of the Plan.
6. Deferred Compensation Account
6.1 Each Plan Year a deferred compensation Account will be
established for each Participant.
6.2 All Compensation deferred by the Participant (including all
Excess 401(k) Deferrals), all increases in the value of the
Account resulting from the application of the appropriate
Interest Index, all other amounts credited to the Account
pursuant to this Plan and all distributions from the Account
to the Participant or the Participant's beneficiary(ies) or
estate shall be reflected in the Account.
6.3 All Accounts shall be maintained by the Administrator.<PAGE>
7. Deferral Sources and Matching Contributions
7.1 At the time of enrollment, a Participant must elect to defer
Compensation for services rendered in the next Plan Year
consisting, for the purposes of this Plan, of one or more of
the following three components: Base Salary, Annual Bonus
and, if a Qualified Participant, Excess 401(k) Deferrals.
7.2 Any Base Salary deferral must be at least 10% of Base Salary.
Any Annual Bonus deferral must be at least 20% of each Annual
Bonus or $10,000, whichever is less. The maximum Base Salary
deferral must not exceed 80% of Base Salary and the maximum
Annual Bonus deferral must not exceed 85% of Annual Bonus.
7.3 Compensation and Excess 401(k) Deferrals deferred under this
Plan shall be credited to the Participant's Account on the
date such amounts would have otherwise been paid.
7.4 The deferral sources and amounts elected for a given Plan Year
are irrevocable.
7.5 If a Qualified Participant in this Plan has elected to
participate in the Savings Plan and has Excess 401(k)
Deferrals, the Company will make Matching Contributions for
that Participant in accordance with Section 3.11 provided the
Participant does not change such Participant's 401(k)
contribution rate during the Plan Year. All such Matching
Contributions shall be credited to the Participant's Account
on the earliest of the last pay day of the respective Plan
Year or the Expiration Date.
8. Deferral Term
8.1 At the time a Participant elects to defer Compensation, the
Participant must also elect the term for which such deferral
is made (the "Deferral Term"). The Deferral Term for Base
Salary or Annual Bonus deferrals must be either five years or
ten years or the date on which the Participant dies, becomes
Disabled or terminates employment with the Company for any
reason. The Deferral Term for all Excess 401(k) Deferrals and
Matching Contributions shall always end upon death, Disability
or termination of employment for any reason.
8.2 The Deferral Term for deferrals of Base Salary and Annual
Bonus must be the same.
8.3 A Deferral Term, once elected, is irrevocable.<PAGE>
8.4 Should a Participant die, become Disabled or the Participant's
employment with the Company be terminated for any reason
before the Expiration Date of a Deferral Term of five or ten
years, the Participant's Account will be distributed as if the
Participant had elected the death, Disability or termination
of employment Deferral Term.
9. Interest Indices
9.1 Amounts deferred under this Plan shall accrue interest from
the date which is the midpoint of the calendar quarter in
which the deferrals are credited to the Participant's Account
until the Expiration Date. Such interest shall be credited to
the Account quarterly, at the interest rate specified in the
Interest Rate Schedule for the respective Plan Year and
Deferral Term elected by the Participant.
10. Payment Form and Method
10.1 All payments from the Plan shall be made only in a lump-sum in
the form of cash.
10.2 The payment shall cover all Deferral Terms, from all deferral
sources, for the respective Plan Year.
11. Account Statement
11.1 Account statements will be sent periodically (at least
annually) to each Participant until the Participant's Account
has been completely distributed.
11.2 The appropriate Interest Rate Schedules will be used for
crediting the deferrals accrued pursuant to Section 9.
12. Account Distribution
12.1 Payment will be made on the later of:
(i) the first pay date which first follows a 30-day
processing period beginning on the Expiration Date, or
(ii) the first pay date which first follows a 30-day
processing period beginning on the date severance payments
cease to be paid to the Participant.
Prior to the Expiration Date or the date severance payments
cease, the Account will continue to accrue interest in
accordance with the Participant's Deferral Term election.<PAGE>
12.2 Applicable federal, state, local and foreign taxes will be
deducted from the gross amount of the payment.
13. Hardship Distributions
13.1 Distribution of payments from a Participant's Account prior to
the dates set forth in Section 12.1 shall be made only if the
Administrator, after consideration of a written application by
the Participant, determines that the Participant has sustained
financial hardship. For purposes of Section 13, Participant
shall also include a terminated Associate receiving severance
payments from the Company.
13.2 Any hardship distribution shall be withdrawn from the
Participant's Account, starting with the most current Plan
Year, continuing in reverse chronological order.
13.3 Applicable federal, state, local and foreign taxes will be
deducted from the gross amount of the payment.
14. Beneficiary Designation
14.1 A Participant shall have the right to designate one or more
beneficiaries and to change any beneficiary previously
designated.
14.2 A Participant shall submit his or her beneficiary designation
in writing using the beneficiary designation form. The
Participant shall deliver the completed form to the
Administrator.
14.3 The most recently dated and filed beneficiary designation
shall cancel all prior designations.
14.4 In the event of the Participant's death before or after the
commencement of payments from the Account, the amount
otherwise payable to the Participant shall be paid to the
designated beneficiary(ies) or, if no beneficiary, to the
estate, according to the provisions of Section 12, as
applicable.
15. General Provisions
15.1 Participant's Rights Unsecured. The right of any Participant
to receive payments under the provisions of this Plan shall be
an unsecured claim against the general assets of the Company.
It is not required or intended that the amounts credited to
the Participant's Account be segregated on the books of the
Company or be held by the Company in trust for a Participant
and a Participant shall not have any claim to or against a<PAGE>
specific asset or assets of the Company. All credits to an
Account are for bookkeeping purposes only.
15.2 Non-assignability. The right to receive payments shall not be
transferrable or assignable by a Participant. Any attempted
assignment or alienation of payments shall be void and of no
force or effect.
15.3 Administration. The Administrator shall have the authority to
adopt rules, regulations and procedures for carrying out this
Plan, and shall interpret, construe and implement the
provisions of the Plan according to the laws of the State of
Ohio. Any such interpretation by the Administrator shall be
final, binding and conclusive.
15.4 Amendment and Termination. The Company expressly reserves the
sole and exclusive right to amend, modify, or terminate this
Plan at any time by action of the Board of Directors of the
Company or, to the extent it has delegated such authority, by
action of the Employee Benefits Committee. Any amendment,
modification, or termination shall be in writing authorized by
the Board of Directors or the Employee Benefits Committee, as
the case may be, and signed by an officer of the Company. The
Company's right of amendment, modification, or termination
shall not require the assent, concurrence, or any other action
by any subsidiary or affiliate of the Company even though
actions by the Company may relate to persons employed by a
subsidiary or affiliate. However, no amendment, modification,
or termination of this Plan shall adversely affect any
Participant's accrued rights arising from any election to
defer Compensation made prior to such amendment, modification
or termination of the Plan.
15.5 Construction. The singular shall also include the plural
where appropriate.
15.6 Employment Rights. This Plan does not constitute a contract
of employment and participation in the Plan will not give any
Participant the right to be retained in the employ of the
Company.
15.7 Annual Bonus Rights. This Plan does not confer the right for
a Participant to receive an Annual Bonus.
15.8 Complete Document. This document and the Participant
enrollment and designation of beneficiary forms contain all
the terms of this Plan and supersede any prior understandings,
agreements or representations, written or oral, which may have
related to the subject matter hereof in any way.<PAGE>
Exhibit 11
<TABLE>
<CAPTION>
CHIQUITA BRANDS INTERNATIONAL, INC.
COMPUTATION OF EARNINGS PER COMMON SHARE (Unaudited)
(In thousands, except per share amounts)
Quarter Ended Six Months Ended
June 30, June 30,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
A. Primary earnings per common share
Income before extraordinary item $ 41,083 $ 43,089 $ 84,377 $ 67,317
Dividends on preferred stock (4,223) (2,066) (8,445) (4,133)
---------- ---------- ---------- ----------
Income attributable to common shares
before extraordinary item 36,860 41,023 75,932 63,184
Extraordinary loss from debt refinancing -- (5,556) -- (5,556)
---------- ---------- ---------- ----------
Net income attributable to common shares $ 36,860 $ 35,467 $ 75,932 $ 57,628
========== ========== ========== ==========
Shares used in calculation of per share data:
Weighted average common shares outstanding 56,233 55,408 56,146 55,249
Less restricted common shares (176) (278) (188) (294)
Dilutive effect of assumed exercise of
stock options 1,207 854 1,150 997
---------- ---------- ---------- ----------
57,264 55,984 57,108 55,952
========== ========== ========== ==========
Primary earnings per common share:
Income before extraordinary item $ .64 $ .73 $ 1.33 $ 1.13
Extraordinary item -- (.10) -- (.10)
---------- ---------- ---------- ----------
Net income $ .64 $ .63 $ 1.33 $ 1.03
========== ========== ========== ==========
</TABLE>
<PAGE>
Exhibit 11 (continued)
<TABLE>
<CAPTION>
CHIQUITA BRANDS INTERNATIONAL, INC.
COMPUTATION OF EARNINGS PER COMMON SHARE (Unaudited)
(In thousands, except per share amounts)
Quarter Ended Six Months Ended
June 30, June 30,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
B. Fully diluted earnings per common share
Income before extraordinary item $ 41,083 $ 43,089 $ 84,377 $ 67,317
Extraordinary loss from debt refinancing -- (5,556) -- (5,556)
---------- ---------- ---------- ----------
Net income $ 41,083 $ 37,533 $ 84,377 $ 61,761
========== ========== ========== ==========
Shares used in calculation of per share data:
Weighted average common shares outstanding 56,233 55,408 56,146 55,249
Less restricted common shares (176) (278) (183) (284)
Dilutive effect of assumed conversion of
preferred stock 15,232 7,566 15,232 7,566
Dilutive effect of assumed exercise of
stock options 1,207 854 1,311 1,158
---------- ---------- ---------- ----------
72,496 63,550 72,506 63,689
========== ========== ========== ==========
Fully diluted earnings per common share:
Income before extraordinary item $ .57 $ .68 1.16 $ 1.06
Extraordinary item -- (.09) -- (.09)
---------- ---------- ---------- ----------
Net income $ .57 $ .59 $ 1.16 $ .97
========== ========== ========== ==========
/TABLE
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the Chiquita
Brands International, Inc. Form 10-Q for the six months ended June 30, 1997 and
is qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 233,077
<SECURITIES> 0
<RECEIVABLES> 207,057
<ALLOWANCES> 9,599
<INVENTORY> 250,136
<CURRENT-ASSETS> 787,054
<PP&E> 1,744,368
<DEPRECIATION> 613,583
<TOTAL-ASSETS> 2,387,452
<CURRENT-LIABILITIES> 413,913
<BONDS> 997,365
0
249,256
<COMMON> 18,750
<OTHER-SE> 532,362
<TOTAL-LIABILITY-AND-EQUITY> 2,387,452
<SALES> 1,277,643
<TOTAL-REVENUES> 1,277,643
<CGS> 948,107
<TOTAL-COSTS> 948,107
<OTHER-EXPENSES> 43,041
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 55,778
<INCOME-PRETAX> 92,577
<INCOME-TAX> 8,200
<INCOME-CONTINUING> 84,377
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 84,377
<EPS-PRIMARY> 1.33
<EPS-DILUTED> 1.16
</TABLE>
