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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K
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(MARK ONE)
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
[FEE REQUIRED]
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1994
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934 [NO FEE REQUIRED]
FOR THE TRANSITION PERIOD FROM TO
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Commission File Number 1-4455
DOLE FOOD COMPANY, INC.
______(Exact name of registrant as specified in its charter)______
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HAWAII 99-0035300
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
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31355 OAK CREST DRIVE
WESTLAKE VILLAGE, CALIFORNIA 91361
(Address of principal executive offices)
Registrant's telephone number, including area code: (818) 879-6600
Securities registered pursuant to Section 12(b) of the Act:
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NAME OF EACH EXCHANGE
ON WHICH REGISTERED
TITLE OF EACH CLASS -------------------------------
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Common Stock, No Par Value New York Stock Exchange
Pacific Stock Exchange
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Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether 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 (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes _X_ No ____
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive Proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendments to
this Form 10-K. /X/
The aggregate market value of the voting stock held by non-affiliates of the
registrant as of March 17, 1995 was approximately $1,620,846,568.
The number of shares of Common Stock outstanding as of March 17, 1995 was
59,480,608.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant's 1994 Annual Report to Stockholders for the year
ended December 31, 1994 are incorporated by reference into Parts I, II and IV.
Portions of the registrant's definitive Proxy Statement for its 1995 Annual
Meeting of Stockholders are incorporated by reference into Part III.
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DOLE FOOD COMPANY, INC.
FORM 10-K
FISCAL YEAR ENDED DECEMBER 31, 1994
TABLE OF CONTENTS
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ITEM NUMBER
IN FORM 10-K PAGE
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PART I
1. Business..................................................................................... 1
2. Properties................................................................................... 9
3. Legal Proceedings............................................................................ 11
4. Submission of Matters to a Vote of Security Holders
Executive Officers of the Registrant....................................................... 12
PART II
5. Market for the Registrant's Common Equity and Related Stockholder Matters.................... 13
6. Selected Financial Data...................................................................... 13
7. Management's Discussion and Analysis of Financial Condition and Results of Operations........ 13
8. Financial Statements and Supplementary Data.................................................. 13
9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure......... 13
PART III
10. Directors and Executive Officers of the Registrant........................................... 14
11. Executive Compensation....................................................................... 14
12. Security Ownership of Certain Beneficial Owners and Management............................... 14
13. Certain Relationships and Related Transactions............................................... 14
PART IV
14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.............................. 14
(a) 1. Index to Financial Statements........................................................ 14
2. Index to Financial Statement Schedules.................................................... 14
3. Index to Exhibits......................................................................... 15
(b) Reports on Form 8-K..................................................................... 16
Signatures.............................................................................................. 17
Financial Statements and Financial Statement Schedules.................................................. F- - F-
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PART I
ITEM 1. BUSINESS
Dole Food Company, Inc. was founded in Hawaii in 1851 and was incorporated
under the laws of Hawaii in 1894. Unless the context otherwise requires, Dole
Food Company, Inc. and its consolidated subsidiaries are referred to herein as
the "Company". The Company's principal executive offices are located at 31355
Oak Crest Drive, Westlake Village, California 91361, telephone (818) 879-6600.
At December 31, 1994, the Company had approximately 46,000 full-time employees
worldwide.
The Company is engaged in three principal businesses: food production and
distribution, real estate development, and resorts. The Company is one of the
largest companies engaged in the worldwide sourcing, processing, distributing
and marketing of high quality, branded food products. The Company's food
operations are conducted through the Company's food group ("Dole"), which
sources, grows, processes and markets fruits, vegetables, nuts and juices in the
following locations: North America; Latin America, principally Chile, Colombia,
Costa Rica, Ecuador, Honduras and Panama; Asia, principally Japan, the
Philippines and Thailand; and Europe, principally Germany, France and Italy.
The Company's real estate operations are primarily conducted under the
"Castle & Cooke" name through the Company's real estate group which holds,
develops, operates and sells residential, commercial, industrial and retail
properties in Hawaii, California, Arizona, North Carolina, Georgia and
Mississippi. In December 1994, the Company completed a tender offer for the
publicly traded shares of its homebuilding and residential development
subsidiary, Castle & Cooke Homes, Inc.
The Company's resort operations are located on the Hawaiian Island of Lana'i
and include two luxury resorts: The Lodge at Koele and The Manele Bay Hotel.
The Company's food, real estate development and resort operations are
described below. For detailed financial information with respect to the revenue,
operating income and assets of the Company's food products, real estate and
resort segments, and its operations in various geographic areas, see the
Company's Consolidated Financial Statements and the related Notes to
Consolidated Financial Statements, which are included in its 1994 Annual Report
for the fiscal year ended December 31, 1994 (the "Dole Annual Report") and
incorporated by reference in Part II of this report.
FOOD
GENERAL
Dole is engaged in the worldwide sourcing, processing, distributing and
marketing of high quality branded food products. Dole provides retail and
institutional customers and other food product companies with high quality
products bearing the DOLE-Registered Trademark- name which are produced and
improved through research, agricultural assistance and advanced harvesting,
processing, packing, cooling, shipping and marketing techniques.
Dole is one of the world's largest producers of bananas and pineapples. Dole
is also a major marketer of citrus and table grapes worldwide and an industry
leader in iceberg lettuce, celery, cauliflower and broccoli. Dole is the second
largest processor of California raisins and processes significant amounts of
California's almond, pistachio and date crops. On March 7, 1995, the Company
signed a letter of intent to sell its California-based raisin, date and prune
business to Sun-Diamond Growers of California, a grower cooperative, for
approximately $100 million. It is a major participant in the chilled,
shelf-stable and frozen juice markets with DOLE-Registered Trademark- 100%
pineapple juice and 100% blended juice varieties. On January 5, 1995, the
Company signed a letter of intent to sell its worldwide juice business (except
for the canned pineapple juice business) to The Seagram Company Ltd., owner of
Tropicana Products, Inc., for approximately $285 million.
Dole's fresh food products are produced both directly on Company-owned or
leased land and through associated producer and independent grower arrangements
pursuant to which Dole provides varying degrees of farming, harvesting, packing,
storing, shipping, stevedoring and marketing services, as well as financing
through advances to growers of certain products. Fresh fruit and vegetable
products, dried fruit and nuts and processed pineapple products are, for the
most part, packed and/or processed directly by Dole.
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Other processed foods, such as fruit juices, are obtained through co-production
arrangements with independent manufacturers. Co-producers manufacture these
products pursuant to strict specifications and under Company supervision
designed to ensure consistently high product quality.
Dole utilizes product quality, brand recognition, competitive pricing,
effective customer service and consumer marketing programs to enhance its
position within the highly competitive food industry. Consumer and institutional
recognition of DOLE-Registered Trademark- and related brands and the association
of these brands with high quality food products contribute significantly to
Dole's ability to compete in the markets for fresh fruit and vegetables,
packaged foods and dried fruit and nuts. The Company owns these trademarks in
the United States, Canada and in other countries in which it conducts business
and regards them as important corporate assets with high recognition and
acceptance.
The markets for all of Dole's products are highly competitive. In order to
compete successfully, Dole sources products of high quality and seeks to
distribute them in worldwide markets on a timely basis. Dole's competitors in
the fresh fruit business include a limited number of large international food
distribution companies, as well as a large number of smaller independent
distributors, including grower cooperatives and foreign government-sponsored
producers which have intensified competition in recent years. With respect to
vegetables, a limited number of grower-shippers in the United States and Mexico
supply a significant portion of the domestic fresh produce market. However,
numerous smaller independent distributors also compete with Dole in the market
for fresh vegetables. With respect to packaged products, Dole competes against a
number of large U.S. companies, as well as a substantial number of smaller
independent canners; Dole's processed pineapple also competes against a
significant volume of product processed abroad by foreign competitors. Dole's
citrus and dried fruit and nut products compete in North America primarily
against large grower cooperatives with strong brand recognition.
Dole's earnings from its fresh fruit, vegetable and dried fruit and nut
operations, and its packaged foods operations are sensitive to fluctuations in
the volatile market prices for these products. Excess supplies often cause
severe price competition. Growing conditions in various parts of the world,
particularly weather conditions such as floods, droughts and freezes, and
diseases and pests are primary factors affecting market prices because of their
influence on supply and quality of product. Other factors affecting Dole's
operations include the seasonality of its supplies, the ability to process
products during critical harvest periods, the timing and effects of ripening,
the degree of perishability, the effectiveness of worldwide distribution
systems, the terms of various federal and state marketing orders (particularly
for dried fruit, nuts and citrus), total worldwide industry volumes, the
seasonality of consumer demand, foreign currency exchange fluctuations, foreign
importation restrictions and foreign political risks.
PRODUCTS
Dole sources, distributes and markets fresh fruit products including
bananas, pineapples, table grapes, apples, pears, plums, oranges, grapefruit,
lemons, mangos, kiwi, tangelos, melons, cherries and other deciduous, tropical
and citrus fruits.
Dole sources, harvests, cools, distributes and markets approximately 25
different types of fresh vegetable products, including iceberg lettuce, red and
green leaf lettuce, romaine lettuce, butter lettuce, celery, cauliflower, green
cauliflower, broccoli, carrots, brussels sprouts, spinach, red and green onions,
asparagus, snow peas, artichokes, strawberries and raspberries. Dole also
markets value-added products such as iceberg lettuce based salad mixes, complete
salad kits which include dressing and condiments, blends of specialty lettuces,
red and green cabbage, mini peeled carrots, coleslaw, vegetable combinations and
broccoli and cauliflower florets.
Dole sources, processes and markets raisins, dates, prunes, almonds,
pistachios and trail mixes.
Dole's fresh fruit and vegetable products and its consumer dried fruit and
nut products are marketed under the DOLE-Registered Trademark- brand, under
other brand names owned by the Company, and, in some cases, under private
labels.
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Dole produces and markets processed food products including sliced, chunk,
tidbit and crushed pineapple in cans, as well as tropical fruit salad, and
markets mandarin oranges. Dole also markets DOLE-Registered Trademark- juice
drinks and DOLEWHIP-Registered Trademark- soft-serve, non-dairy dessert.
Dole's products are marketed through 27 direct selling offices in North
America, 19 in Europe, four in Japan, one each in Hong Kong, Korea, the Middle
East, the Philippines and Taiwan, as well as through independent brokers.
DOLE NORTH AMERICA
DOLE NORTH AMERICA sources, distributes and markets
DOLE-Registered Trademark- fresh fruits and vegetables, dried fruit and nuts and
other processed food products, including processed pineapple, juices and juice
concentrates, in North America.
Dole North America markets bananas grown in Latin America, table grapes
grown in the United States, Chile and Mexico, apples and pears grown in the
United States and Chile, melons grown in Ecuador and citrus fruit grown in the
United States, as well as other deciduous and tropical fruit grown in the United
States, Chile, Costa Rica, Mexico and New Zealand. Fresh pineapple destined for
North America is grown by Dole North America in Hawaii. These products are sold
primarily to wholesalers and retail chains, which in turn resell or distribute
them to retail food stores.
Fresh vegetables marketed by Dole are generally grown by independent growers
in California, Arizona, Colorado and northern and central Mexico. The vegetables
are generally field packed and transported to Dole's central cooling and
distribution facilities. The products are sold to customers in North America,
Asia and Western Europe.
Dole has an agreement with Nestle Dairy Systems, Inc., a subsidiary of
Nestle USA, Inc., in which Dole has licensed to Nestle its rights to market and
manufacture processed products in key segments of the frozen novelty business in
the United States and Canada, including FRUIT 'N JUICE-REGISTERED TRADEMARK-,
SUNTOPS-TM-, FRESH LITES-REGISTERED TRADEMARK-, FRUIT 'N YOGURT-TM- and FRUIT 'N
CREAM-TM- bars and, in the premium novelty category, Fruit Sorbet.
Dried fruit and nut products are sourced from independent growers and, to a
lesser extent, produced by Dole North America. They are packaged for the retail
consumer and in bulk for cereal, confectionery and other food processors and for
food service use. Raisins are acquired from growers and dehydrators located in
the San Joaquin Valley of California. These products are marketed domestically
and overseas, primarily in Western Europe and Asia. Approximately 60% of all
production is sold to other food processors for eventual use in other food
products. Raisins account for the largest portion of dried fruit and nut sales.
On January 5, 1995, the Company signed a letter of intent to sell its
worldwide juice business (except for the canned pineapple juice business) to The
Seagram Company Ltd., owner of Tropicana Products, Inc., for approximately $285
million. On March 7, 1995, the Company signed a letter of intent to sell its
California-based raisin, date and prune business to Sun-Diamond Growers of
California, a grower cooperative, for approximately $100 million.
DOLE LATIN AMERICA
DOLE LATIN AMERICA sources and transports bananas grown in Costa Rica,
Colombia, Ecuador, Guatemala, Honduras, Nicaragua and Panama for markets
principally in North America, Europe and the Mediterranean.
Fresh pineapples destined for the North American and Western European
markets are grown by Dole Latin America on plantations in Honduras and the
Dominican Republic and sourced from independent producers in Costa Rica.
Dole Latin America sources table grapes, apples, pears and other deciduous
fruit grown in Chile, melons grown in Ecuador, citrus fruit grown in Honduras
and Argentina, and mangoes from Mexico, Peru and Venezuela for markets in North
America, Western Europe and Asia.
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Dole operates a fleet of approximately 33 refrigerated vessels, of which 14
are Company-owned and the remainder are chartered. From time to time, excess
capacity may be chartered or subchartered to others. In January 1995 Dole took
delivery of the last of four new breakbulk refrigerated vessels built by a
Polish shipbuilder.
Dole Latin America conducts other food and beverage operations in Honduras,
including an approximately 80% interest in a beer and soft drink bottling
operation, a bottle crown plant, a plastic injection facility used primarily for
the manufacture of beer and soft drink plastic cases, a sugar mill and sugar
cane plantations, as well as a majority interest in an edible oils refinery, a
laundry soap factory, a palm oil extraction operation and a palm oil plantation.
The beer and soft drink bottling operation, which sells its products primarily
in Honduras, competes against other local soft drink bottlers. Competition
focuses on product quality, consumer marketing programs and the effectiveness of
the distribution system.
DOLE ASIA
Bananas and pineapples grown in the Philippines are transported to markets
principally in Asia and the Middle East. Pineapples used for processed products
are grown primarily in Thailand and the Philippines. DOLE ASIA also sources
DOLE-Registered Trademark- and Mountain-Registered Trademark- asparagus from the
Philippines and distributes and markets these products in Japan and other Asian
countries.
Snow Dole Co., Ltd., a joint venture of Dole and Snow Brand Milk Products
Co., Ltd. of Japan, processes and distributes a full line of 100% fruit juices,
frozen desserts and canned pineapple in Japan. The juice component of this joint
venture is part of the Company's proposed sale of its juice business to The
Seagram Company Ltd., owner of Tropicana Products, Inc.
Dole Asia, with joint venture partners, is developing citrus orchards and
juice processing facilities in mainland China. The juice processing facility is
part of the Company's proposed sale of its juice business to The Seagram Company
Ltd., owner of Tropicana Products, Inc.
Dole Asia also produces leather-leaf ferns, anthuriums and other tropical
flowers in the Philippines for export to Japan. The winding down of Dole Asia's
shrimp farming operation in the Philippines is continuing.
DOLE EUROPE
DOLE EUROPE is a major importer of bananas and other fresh fruits, dried
fruits, nuts, canned fruits and juices in Europe and the Near East.
Dole Europe operates four regional banana ripening and distribution
companies in France which complement the Company's investment in the largest
French banana producer, with banana plantations in Cameroon, import operations
in France and Spain, and banana ripening in seven regional facilities in France
and three in Spain. Dole Europe is a minority partner with the Jamaican Producer
Group (the largest banana producer in Jamaica), in the Jamaican Producers Fruit
Distributors Ltd. in the United Kingdom. This banana ripening and fruit
distribution company operates five facilities in the United Kingdom. This joint
venture distributes Dole fresh fruits and bananas as well as Jamaican bananas,
fruits and vegetables direct to retail in the UK.
Dole Europe is the majority partner, with the Livorno Stevedore Company
C.I.L.P., in a major port discharge and distribution facility in the Italian
port of Livorno. This facility provides reefer container service utilizing
feeder vessels to distribute fruit to Mediterranean markets. A distribution
facility in Turkey is under construction.
Dole Europe operates a European dried fruit and nut business which sources
products from around the world for processing and packaging in France and
distribution in France and to other European markets. This business distributes
a line of dried fruit and nut products sold throughout Europe. In 1994, Dole
purchased a prune processor, packer and distributor in France. These businesses
are not part of the Company's proposed sale of its California-based raisin, date
and prune business to Sun-Diamond Growers of California.
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The Company owns affiliated fruit juice businesses which produce and
distribute juice products in Europe and the United States under the
Looza-Registered Trademark-, Fruvita-Registered Trademark- and Juice
Bowl-Registered Trademark- brands. Looza-Registered Trademark- is a leader in
shelf-stable juices and nectars in its market sector.
Fruvita-Registered Trademark- is the leader in the chilled fruit juice category
in continental Europe. Juice Bowl-Registered Trademark- brand juice products are
distributed in the United States. These businesses are part of the Company's
proposed sale of its juice business to The Seagram Company Ltd., owner of
Tropicana Products, Inc.
RESEARCH AND DEVELOPMENT
Dole's research and development programs concentrate on the development of
new value-added products and new uses for existing products, as well as
agricultural research and packaging design for improving product quality. New
product development and packaging research activities are conducted primarily at
Dole's research technical center in San Jose, California.
Agricultural research is directed toward improving product yields and
product quality by examining and improving agricultural practices in all phases
of production (such as development of specifically adapted plant varieties, land
preparation, fertilization, cultural practices, pest and disease control, and
post-harvesting, packing, and shipping procedures), and includes on-site
technical services and the implementation and monitoring of recommended
agricultural practices. Specialized machinery is also developed for various
phases of agricultural production and packaging which reduces labor, improves
productivity and efficiency and increases product quality. Agricultural research
is conducted at field facilities primarily in California, Hawaii, Latin America
and Asia.
FOREIGN OPERATIONS
Dole has significant food sourcing and related operations in Chile,
Colombia, Costa Rica, the Dominican Republic, Ecuador, Honduras, the Philippines
and Thailand. Dole also sources food products in Algeria, Argentina, Australia,
Cameroon, China, Greece, Guatemala, Italy, Ivory Coast, Mexico, New Zealand,
Nicaragua, Panama, Peru, Spain, Syria, Tunisia, Turkey and Venezuela.
Significant volumes of Dole's fresh fruit and packaged products are marketed in
Canada, Western Europe and Japan, with lesser volumes marketed in New Zealand,
Hong Kong, South Korea, Australia and certain countries in Asia, Eastern Europe,
Scandinavia, the Middle East and Central and South America. Exports of Dole's
products to these countries, particularly Japan, South Korea and Taiwan, are
subject to various restrictions which may be increased or reduced in response to
international political pressures, thus affecting Dole's ability to compete in
these markets. Some of Dole's dried fruit and nut products are marketed to Asia
and Western Europe. The European Union ("EU") banana regulations which impose
quotas and tariffs on bananas were in full effect in 1994 and continue to be in
effect in 1995. In addition, beginning in 1995, four Latin American countries
(Costa Rica, Colombia, Nicaragua and Venezuela) will implement an agreement with
the EU to receive a guaranteed share of the import quotas. Regulations governing
this agreement are expected to be published in the first quarter of 1995 and
could result in higher costs of operations for the Company due to additional
license requirements and export fees that may be imposed. As part of the
agreement, the basic EU import quota will be increased 10% and the tariff
decreased approximately 35%. The EU quota will receive a second increase to
accommodate an additional 20 million consumers when Norway, Sweden and Austria
join the EU effective January 1995. Regulations governing the issuance of
licenses to control this new volume are also expected to be published in the
first quarter of 1995. The net impact of these changing regulations on Dole's
future results of operations is not determinable at this time.
Dole's foreign operations are subject to risks of expropriation, civil
disturbances, political unrest, increases in taxes and other restrictive
governmental policies, such as import quotas. Loss of one or more of its foreign
operations could have a material adverse effect on Dole's operating results.
Dole attempts to maintain a cordial working relationship in each country where
it operates. Because Dole's operations are a significant factor in the economies
of certain countries, its activities are subject to intense public and
governmental scrutiny, and may be affected by changes in the status of the host
economies, the makeup of the government or even public opinion in a particular
country. Dole's international sales are usually transacted in U.S. dollars and
major European and Asian currencies, while many of its costs are incurred in
currencies different from those that are received from the sale of the product.
As the Company has not
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historically entered into forward foreign exchange contracts, results of
operations may be significantly affected by fluctuations in currency exchange
rates in both the sourcing and selling locations. The overall net impact of
foreign currency fluctuations was immaterial to the results of operations in
1993 and 1994.
ENVIRONMENTAL AND REGULATORY MATTERS
Dole's agricultural operations are subject to a broad range of evolving
environmental laws and regulations in each country in which it operates. In the
United States, these laws and regulations include the Clean Air Act, the Clean
Water Act, the Resource Conservation and Recovery Act, the Federal Insecticide,
Fungicide and Rodenticide Act and the Comprehensive Environmental Response,
Compensation and Liability Act.
Compliance with these foreign and domestic laws and related regulations is
an ongoing process which is not currently expected to have a material effect on
Dole's capital expenditures, earnings or competitive position. Environmental
concerns are, however, inherent in most major agricultural operations, including
those conducted by Dole, and there can be no assurance that the cost of
compliance with environmental laws and regulations will not be material.
Moreover, it is possible that future developments, such as increasingly strict
environmental laws and enforcement policies thereunder, and further restrictions
on the use of agricultural chemicals could result in increased compliance costs.
Dole's food operations are also subject to regulations enforced by, among
others, the U.S. Food and Drug Administration and state, local and foreign
equivalents and to inspection by the U.S. Department of Agriculture and other
federal, state, local and foreign environmental and health authorities. Among
other things, the U.S. Food and Drug Administration enforces statutory standards
regarding the branding and safety of food products, establishes ingredients and
manufacturing procedures for certain foods, establishes standards of identity
for foods and determines the safety of food substances in the United States.
Similar functions are performed by state, local and foreign governmental
entities with respect to food products produced or distributed in their
respective jurisdictions.
Several of Dole's products, including but not limited to dried fruit, nuts
and citrus fruit, are or in the future may be subject to, federal and state
marketing orders which may affect the quantities of such products that can be
sold at any one time, the amount of such products that must be held in reserve,
the manner in which such products can be processed, quality standards for such
products and various other matters relating to the marketing and sale of such
products.
SOURCES AND AVAILABILITY OF RAW MATERIALS
The major raw material and operating supplies used by Dole are seed and
other planting materials, fuels for transportation, agricultural chemicals,
packaging materials and tinplate. Generally, all of these items are readily
available from a number of sources; however, operations would be affected by any
substantial reductions in supply.
REAL ESTATE
The Company conducts real estate activities, including residential,
commercial and/or industrial real estate projects, in Hawaii, California,
Arizona, North Carolina, Georgia and Mississippi. The Company generally competes
against a number of large, well-capitalized real estate developers for
residential, commercial and industrial projects. The Company competes for
residential sales with other developers, homebuilders and individuals reselling
existing residential housing in the greater metropolitan areas in which it
conducts business. The Company competes primarily on the basis of location,
prices, quality and design. The Company also competes with other developers and
homebuilders for desirable properties, financing, raw materials and skilled
labor. The Company's real estate operations are subject to a variety of risks
including increases in mortgage interest rates, shifts in population, real
estate market fluctuations, changes in the desirability and preferences for
residential, commercial and industrial areas, and the effects of changes in tax
laws. Land use planning, management and development are also subject to local
zoning, economic and political constraints.
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RESIDENTIAL REAL ESTATE OPERATIONS
In December 1994, the Company completed a tender offer for the publicly
traded shares of Castle & Cooke Homes, Inc. ("CKI"), its homebuilding and
residential development subsidiary. Prior to completion of the tender offer, the
Company owned approximately an 82% interest in CKI, which was listed on the New
York Stock Exchange under the symbol "CKI".
In Hawaii, Mililani Town, located in central Oahu, is being developed as a
3,500-acre master-planned community, complete with homes, parks, recreation
centers, schools, shopping centers and a library. In Mililani Makai, the first
section of the community to be developed, approximately 9,300 units on
approximately 2,300 acres of land have been sold. Mililani Mauka is the section
of Mililani Town now undergoing development; current plans call for the
development of approximately 6,600 units on 1,200 acres over the next eight
years. The necessary land use and zoning approvals for the first phase of 4,500
units on approximately 790 acres in Mililani Mauka have been received, and
approximately 1,665 units have been built and sold through December 31, 1994.
Other active Hawaii developments include Royal Kunia and The Crowne at
Wailuna.
Royal Kunia is a 270-acre master-planned community to be built on the Ewa
Plain in central Oahu. Royal Kunia is owned by a limited partnership in which a
wholly-owned subsidiary of the Company is the sole general partner and holds a
50% interest. The development, when completed in accordance with the master
plan, will offer single-family and multi-family housing adjacent to commercial
properties, parks and recreational facilities. The master plan provides for
1,748 units, of which 160 were sold in 1994.
The Crowne at Wailuna is the fourth and final phase of a planned residential
community above Pearl City on the island of Oahu. This 26-acre parcel was
purchased by the Company in 1993. It is planned to include 158 detached homes
developed under condominium ownership. Construction is currently underway. As of
December 31, 1994, 30 units had been sold.
In December 1994, the Company purchased the Kaluanui 1 parcel, an
approximately 22-acre site in Hawaii Kai in East Oahu. The Company is entitled
to develop up to 290 units on the parcel. The project is currently undergoing
design development to include townhouses and flats under fee simple condominium
ownership. Construction is anticipated to start in late 1995, with first
deliveries anticipated in early 1996.
In Bakersfield, California, planned residential communities are being
developed on approximately 4,840 acres. The property was in various stages of
development when acquired in late 1987. Approximately 1,305 acres are currently
zoned for development, portions of which have been master-planned and
subdivided, with roadways and utilities constructed to each subdivision. In
Bakersfield, lots are sold to independent builders for single family projects,
and homes are also sold in a few developments.
Current residential development activities in Bakersfield include Silver
Creek, Seven Oaks, Brimhall, The Oaks and Haggin Oaks. Silver Creek is a
master-planned community encompassing approximately 600 acres. Homes and
homesites are offered at three price levels. Approximately 1,120 homes and
homesites remain to be developed on approximately 420 acres.
Seven Oaks is a master-planned community on approximately 1,000 acres and is
designed to be the premier residential development in Bakersfield. Seven Oaks
surrounds an 18-hole golf course and country club developed by the Company,
which will be contributed to a nonprofit mutual benefit corporation. The Company
sells homesites in Seven Oaks. Approximately 1,275 home and homesites on
approximately 500 acres remain to be developed.
Brimhall is a 285-acre residential community designed to attract
entry-level, middle-market and custom homebuyers. Development commenced in 1991.
An additional 940 acres are currently being master-planned to complete the
Brimhall community. The Company currently plans to develop approximately 4,040
homesites on the approximately 1,200 remaining acres.
Other developments include The Oaks and Haggin Oaks in Bakersfield,
California, and Sierra Vista, Arizona. Approximately 240 single family lots
remain to be developed in The Oaks and an additional 63
7
<PAGE>
single family lots in Haggin Oaks. The Sierra Vista, Arizona project contains
single-family and multi-family homesites for sale to builders and individuals.
Approximately 3,500 homesites remain to be developed on approximately 1,280
acres. In March 1995, the Company sold a 320-unit apartment complex in
Bakersfield that it had developed to a third party.
The Company also owns and operates a 192-unit apartment complex in
Charlotte, North Carolina, a 360-unit apartment complex in Jackson, Mississippi,
a 204-unit apartment complex in Southaven, Mississippi, and a 252-unit apartment
complex in Horn Lake, Mississippi.
COMMERCIAL, INDUSTRIAL AND RETAIL REAL ESTATE OPERATIONS
The Company's commercial, industrial and retail real estate operations are
conducted through wholly-owned subsidiaries of the Company.
In Hawaii, the Company is constructing a shopping center in Mililani Town on
approximately 40 acres, of which approximately 400,000 square feet of building
space have been completed, including Hawaii's first Walmart store. In addition,
the Company is developing Mililani Technology Park, a 256-acre, campus-like
business/research office park currently zoned and designed primarily for high
technology companies. As of December 31, 1994, 49 acres had been sold.
The Company also operates a Company-owned mixed-use complex at Dole's former
cannery facility in Honolulu and a tourist attraction at Dole's pineapple
plantation in central Oahu.
In Bakersfield, California, the Company has three industrial parks in
various stages of development. The Company also owns two office buildings, a
150,000 square foot industrial warehouse and a 50% general partnership interest
in a partnership owning a shopping center.
The Company also owns and operates a 188,000 square foot commercial office
building in Atlanta, Georgia, a 167,000 square foot commercial office building
in Raleigh, North Carolina, a 81,000 square foot commercial office building in
Raleigh, North Carolina and a 62,000 square foot commercial office building in
Tempe, Arizona.
The construction work conducted by the Company's residential, commercial,
industrial and retail real estate operations is largely performed by independent
contractors, subcontractors and suppliers, and the materials and supplies are
secured by these contractors, subcontractors and suppliers from customary trade
sources. Although certain products are subject to supply limitations from time
to time, such limitations have not significantly impaired the Company's ability
to conduct its business in the past.
RESORTS
The Company owns and operates two luxury hotels on the Hawaiian island of
Lana'i. The Lodge at Koele is a two story, 102-room luxury lodge set in the
wooded highlands of Koele, Lana'i. It includes an 18-hole golf course called The
Experience at Koele. The Manele Bay Hotel is a luxury, oceanfront hotel with 249
guest rooms and suites. A conference center for The Manele Bay Hotel was
completed in 1992. The Challenge at Manele, an 18-hole golf course immediately
adjacent to The Manele Bay Hotel, was completed in 1993. The Company is also
planning to develop the property contiguous to the Lodge and golf course sites
on Lana'i as residential homesites. The Company began marketing golf course
frontage townhomes and single family lots at Koele in early 1995. Development of
homesites at Manele is awaiting final land use and zoning approvals. The
Company's resort operations are subject to the risks of changes in the
desirability and preference for resort areas and economic and local political
constraints.
ENVIRONMENTAL AND REGULATORY MATTERS
The Company's real estate and resort operations are subject to a broad range
of evolving federal, state and local environmental laws and regulations.
Management is not currently aware of any environmental compliance issues that
are expected to have a material effect on the Company's capital expenditures,
earnings or competitive position.
8
<PAGE>
ITEM 2. PROPERTIES
The Company maintains executive offices in Westlake Village, California and
auxiliary executive offices in Los Angeles, California and New York, New York,
each of which is leased from third parties. Dole's various divisions also
maintain headquarters offices in Westlake Village and Salinas, California, which
are leased from third parties, and in Fresno, California, Wahiawa, Hawaii and
Wenatchee, Washington, which are owned by the Company. The Company owns the
headquarters building of Dole Fresh Fruit International, Limited in Costa Rica,
as well as offices in Colombia and Honduras. Dole Europe maintains its European
headquarters in Paris, France as well as regional offices in Hamburg, Germany,
Brussels, Belgium, Genoa, Italy and Istanbul, Turkey, which are leased from
third parties. In addition, the Company's Hawaii real estate operations maintain
offices in Honolulu, Hawaii in a building which is owned by the Company. The
Company's California real estate operations and its California fresh fruit and
citrus operations are headquartered in Bakersfield, California in a building
owned by the Company. The Company's resort operations maintain offices on the
Island of Lana'i in buildings owned by the Company. The inability to renew any
of the above office leases by the Company would not have a material adverse
effect on the Company's operating results. The Company and each of its
subsidiaries believe that their property and equipment are generally well
maintained, in good operating condition and adequate for their present needs.
The following is a description of the food and real estate operations'
significant properties.
DOLE
DOLE NORTH AMERICA
Dole's Hawaii pineapple operations for the fresh produce market are located
on the island of Oahu and total approximately 7,000 acres owned by the Company.
Dole produces citrus on approximately 11,000 acres in the San Joaquin and
Coachella Valleys of California owned directly, through agricultural
partnerships or under management arrangements, as well as through independent
growing arrangements. Dole also provides care and management services for
approximately 9,000 citrus acres in Florida. Citrus is packed in seven
Company-owned or leased packing houses -- five in California, one in Florida and
one in Arizona. Dole, through a joint venture, operates a 175,000 square foot
packing house in southwest Florida with two multi-variety production lines.
Domestic table grapes are sourced from approximately 6,000 acres on four
Company-owned vineyards, one located in the Coachella Valley and three located
in the San Joaquin Valley. Domestic table grapes are fumigated and cooled in
three Company-owned facilities, two are located in the San Joaquin Valley and
one is located in the Coachella Valley. Dole produces wine grapes on
approximately 2,000 acres of vineyards, and stone fruit on approximately 800
acres of Company-owned property in the San Joaquin Valley. The Company owns a
cherry packing and processing facility in Victor, California.
Dole produces apples and pears directly from seven Company-owned orchards on
approximately 1,800 productive acres in Wenatchee and Chelan, Washington as well
as through independent growing arrangements. The Company also owns apple and
pear storage, processing and packing facilities in Wenatchee and Chelan.
The Company owns approximately 1,400 acres of farmland in California and
Arizona, and leases approximately 11,400 acres of farmland in California and
another 5,300 acres in Arizona in connection with Dole's vegetable operations.
The majority of this acreage is farmed under joint growing arrangements with
independent growers, while the remainder is farmed by Dole. The Company owns
cooling, packing and shipping facilities in Yuma, Arizona and the following
California cities: Marina, Holtville, Guadalupe, Gonzales and Huron.
Additionally, the Company has partnership interests in facilities in Yuma,
Arizona and Mexico, and leases facilities in Oxnard, California. The Company
owns state-of-the-art, value-added processing plants in Yuma, Arizona and
Soledad, California.
Dole produces almonds from approximately 4,200 acres and pistachios from
approximately 3,100 acres of orchards in the San Joaquin Valley, owned directly
or through agricultural partnerships or leased. The Company leases approximately
50 acres of date gardens in the Coachella Valley.
9
<PAGE>
The Company owns and operates one almond processing and packing plant, three
almond receiving and storage facilities, one pistachio processing plant and two
raisin and prune processing plants, all of which are located in the San Joaquin
and Sacramento Valleys. The Company owns and operates a date processing plant in
the Coachella Valley.
Hawaii sugar operations include a mill which produces raw sugar and a
plantation on the island of Oahu, although a phase-out of this operation was
announced in 1994. Approximately 12,000 acres (approximately 6,100 acres of
which are owned and the remainder of which are leased) are used for crops.
Portions of the Company's fresh fruit and vegetable farm properties are
irrigated by surface water supplied by local government agencies using
facilities financed by federal or state agencies, as well as from underground
sources. Water received through federal facilities is subject to acreage
limitations under the 1982 Reclamation Reform Act. The quantity and quality of
these water supplies varies depending on weather conditions and government
regulations. The Company believes that under normal conditions these water
supplies are adequate for current production needs.
DOLE LATIN AMERICA
Dole produces bananas directly from Company-owned plantations in Costa Rica,
Colombia and Honduras as well as through associated producers or independent
growing arrangements in those countries and in Ecuador, Guatemala, Panama and
Nicaragua. The Company owns approximately 40,400 acres in Honduras, 32,400 acres
in Costa Rica and 3,600 acres in Colombia.
Dole also grows pineapple on approximately 6,000 acres of owned land in
Honduras, primarily for the fresh produce market, and owns a juice concentrate
plant in Honduras for pineapple and citrus. Dole grows pineapple on
approximately 11,000 acres of leased land in the Dominican Republic and owns a
juice concentrate plant located adjacent to the leased acreage.
Dole produces citrus on approximately 650 acres of Company-owned land and
operates a grapefruit packing house in Honduras. Dole also produces grapes,
stonefruit, kiwi and pears on approximately 900 acres in Chile.
Dole operates Company-owned corrugated box plants in Chile, Colombia, Costa
Rica, Ecuador and Honduras.
The Company has an interest in the following properties in Honduras: an
approximately 80% interest in a beer and soft drink bottling operation, a bottle
crown plant, a plastic injection facility used primarily for the manufacture of
beer and soft drink plastic cases and a sugar mill, as well as a majority
interest in an edible oils refinery, a laundry soap factory, a palm oil
extraction operation and 3,400 acres of palm oil plantation.
Dole operates a fleet of approximately 33 refrigerated vessels, of which 14
are Company-owned and the remainder are chartered. From time to time, excess
capacity may be chartered or subchartered to others. Dole enters into spot
charters as necessary to supplement its transportation resources. In January
1995, Dole took delivery of the last of four new breakbulk refrigerated vessels
built by a Polish shipbuilder.
DOLE ASIA
Dole operates a pineapple plantation of approximately 30,200 acres in the
Philippines. Originally covered by a grower agreement between Dole and a
government-owned and controlled corporation, approximately 22,100 acres of the
plantation have been transferred to a cooperative of Dole employees that will
acquire the land pursuant to an agrarian reform law. The remaining acreage in
the Philippines is farmed pursuant to farm management contracts. A cannery,
chillroom, juice concentrate plant, corrugated box plant and can manufacturing
plant, each owned by Dole, are proximately located to the plantation.
Through a subsidiary in Thailand controlled by Dole, Dole grows pineapple on
approximately 5,000 acres of leased land and purchases additional supplies of
pineapple in Thailand on the open market. Dole's Thailand subsidiary owns and
operates a cannery, can plant and juice concentrate plant located adjacent to
the leased acreage in central Thailand, and a second multi-fruit cannery in
southern Thailand.
10
<PAGE>
Dole also produces bananas through associated producers or independent
growing arrangements in the Philippines, and, with a joint venture partner, is
developing approximately 6,400 acres of citrus orchards in China.
DOLE EUROPE
Dole owns four banana ripening and fruit distribution facilities in France
and one in Barcelona, Spain. The Company has an interest in a French company
which has seven banana ripening and fruit distribution facilities in France and
three in Spain. This French company owns a majority interest in banana
plantations in Cameroon and pineapple plantations in Ivory Coast, with banana
producing joint interests in Ivory Coast. Dole owns an interest in a United
Kingdom banana ripening and fruit distribution company with five facilities in
the United Kingdom. Dole Europe is the majority owner in a port terminal and
marine distribution facility in Livorno, Italy. The Company owns land and has
begun construction of a banana ripening and fruit distribution facility in
Istanbul, Turkey.
Dole owns two affiliated fruit juice companies which have production
facilities in Belgium, France and Florida. These companies are part of the
Company's proposed sale of its juice business to The Seagram Company Ltd., owner
of Tropicana Products, Inc.
In France, the Company owns a dried fruit and nut processing, packaging and
warehousing facility in Vitrolles, a date processing and packing plant in
Marseille and a prune processing and packaging plant in Agen. These facilities
are not part of the Company's proposed sale of its California-based raisin, date
and prune business to Sun-Diamond Growers of California.
REAL ESTATE AND RESORTS
The Company owns an aggregate of approximately 129,000 acres of land in
Hawaii. Of that total, approximately 40,400 acres are located on the island of
Oahu, of which approximately 13,600 acres currently are used for the cultivation
of pineapple, approximately 12,000 acres are leased or rented to approximately
94 tenants and approximately 5,600 acres are held for real estate development.
Approximately 88,600 acres are located on the Island of Lana'i, of which the
Company uses approximately 1,300 acres for resort and residential development.
In addition, approximately 15,100 acres on Lana'i are being used or are
available for diversified agricultural operations, including pasture land for
livestock.
In California, the Company owns approximately 10,950 acres, including
approximately 3,200 acres near San Jose, 7,400 acres near Bakersfield and 350
acres at the Mountaingate development in West Los Angeles. The Company also owns
approximately 6,800 acres in Cochise County, Arizona.
The Company also owns and operates four office buildings located in North
Carolina, Georgia and Arizona, and three apartment complexes located in
Mississippi and one apartment complex located in North Carolina.
ITEM 3. LEGAL PROCEEDINGS
Lawsuits have been filed in Texas against the manufacturers of a formerly
widely used agricultural chemical called DBCP and against the Company.
Plaintiffs are foreign nationals who claim they were employees or independent
contract growers of Company subsidiaries during the 1970's. Damages are claimed
for alleged personal injuries caused by contact with DBCP approximately 15 to 20
years ago. The Company has denied liability and asserted substantial defenses.
Similar lawsuits with a different group of plaintiffs have been settled. The
portion paid by the Company was covered by insurance and immaterial to the
Company. In the opinion of management, after consultation with outside counsel,
these pending lawsuits are not expected to have a material adverse effect on the
Company.
The Company is involved from time to time in other various claims and legal
actions incident to its operations, both as plaintiff and defendant. In the
opinion of management, after consultation with outside counsel, none of the
claims or actions to which the Company is a party is expected to have a material
adverse effect on the Company.
11
<PAGE>
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of security holders during the
quarter ended December 31, 1994.
EXECUTIVE OFFICERS OF THE REGISTRANT
Below is a list of the names and ages of all executive officers of the
Company as of March 15, 1995 indicating their positions with the Company and
their principal occupations during the past five years. The current terms of the
executive officers will expire at the next organizational meeting of the
Company's Board of Directors or at such time as their successors are elected.
<TABLE>
<CAPTION>
NAME AND AGE POSITIONS WITH THE COMPANY AND SUBSIDIARIES AND FIVE-YEAR EMPLOYMENT HISTORY
------------------------------ --------------------------------------------------------------------------------
<S> <C>
David H. Murdock (71) Chairman of the Board, Chief Executive Officer and Director of the Company since
July 1985. Since June 1982, Chairman of the Board and Chief Executive Officer of
Flexi-Van Corporation, a Delaware corporation wholly-owned by Mr. Murdock. Sole
owner and developer of the Sherwood Country Club in Ventura County, California,
and numerous other real estate developments; also sole stockholder of numerous
corporations engaged in a variety of business ventures and in the manufacture of
textile-related products and industrial and building products.
David A. DeLorenzo (48) President of Dole Food Company -- International since September 1993 and
Executive Vice President and Member of the Office of the Chairman of the Company
since July 1990. Director of the Company since February 1991. President of Dole
Fresh Fruit Company from September 1986 to June 1992.
Gerald W. LaFleur (62) Executive Vice President and Member of the Office of the Chairman of the Company
since April 1992. Executive Vice President of Pacific Holding Company (a sole
proprietorship of Mr. Murdock) since July 1991. Prior to July 1991, partner in
Arthur Andersen LLP.
Alan B. Sellers (47) Executive Vice President and Member of the Office of the Chairman of the Company
since January 1990. Chief Financial Officer of the Company from March 1992 to
February 1995 and Chief Administrative Officer of the Company from July 1990 to
February 1995. Senior Vice President and General Counsel of the Company from
February 1988 to January 1990. Corporate Secretary of the Company since February
1986. Vice President-Legal Affairs of Flexi-Van Corporation (a corporation
wholly owned by Mr. Murdock) from August 1987 to December 1993; Corporate
Secretary of Flexi-Van Corporation and General Counsel of Pacific Holding
Company (a sole proprietorship of Mr. Murdock) from August 1986 to December
1993.
Ernest W. Townsend (49) Executive Vice President, Member of the Office of the Chairman of the Company
and President of Dole Food Company -- North America since September 1993.
President of Dole Fresh Fruit and Vegetables (North America) since June 1992.
President and Chief Executive Officer of the All-American Gourmet division of
Kraft/General Foods from March 1989 to May 1992. President of Frozen Food Group
of Kraft, Inc. from January 1988 to March 1989.
George R. Horne (58) Vice President of the Company since October 1982. Vice President-Human Resources
of Dole since February 1986.
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
POSITIONS WITH THE COMPANY AND SUBSIDIARIES AND FIVE-YEAR
NAME AND AGE EMPLOYMENT HISTORY
------------------------ ----------------------------------------------------------------
Michael S. Karsner (36) Vice President - Treasurer and Chief Financial Officer of the Company since
February 1995. Vice President and Treasurer of the Company from January 1994 to
February 1995. Vice President and Treasurer of The Black & Decker Corporation
from January 1990 to January 1994. Vice President - Corporate Development of The
Black and Decker Corporation from March 1989 to January 1990.
<S> <C> <C>
Thomas C. Leppert (40) Vice President of the Company and President of Castle & Cooke
Properties, Inc. since March 1989.
Patricia A. McKay (37) Vice President - Finance and Controller of the Company since
February 1995. Vice President - Controller of the Company from
August 1991 to February 1995. Controller of Dole Fresh Fruit
Company since October 1988.
Patrick A. Nielson (44) Vice President and General Counsel - Food Operations of the
Company since May 1994. General Counsel - Food Operations of the
Company from July 1991 to May 1994. Vice President and General
Counsel of Dole Fresh Fruit Company since 1983.
J. Brett Tibbitts (39) Vice President and Corporate General Counsel of the Company
since May 1994. General Counsel - Corporate of the Company from
June 1992 to May 1994. Deputy General Counsel of the Company
from January 1990 to June 1992. Assistant General Counsel of the
Company from January 1988 to June 1990.
Roberta Wieman (51) Vice President since February 1995. Executive Assistant to the
Chairman of the Board and Chief Executive Officer from November
1991 to February 1995. Joint proprietor of sportswear outlet
from 1986 to October 1991.
</TABLE>
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
As of March 17, 1995, there were approximately 15,501 holders of record of
the Company's Common Stock. Additional information required by Item 5 is
contained on pages 26, 27, 30, 35 and 37 of the Dole Annual Report. Such
information is incorporated herein by reference.
ITEM 6. SELECTED FINANCIAL DATA
There is hereby incorporated by reference the information appearing under
the caption "Results of Operations and Selected Financial Data" on page 35 of
the Dole Annual Report.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
There is hereby incorporated by reference the information appearing under
the caption "Management's Discussion and Analysis of Results of Operations and
Financial Position" on pages 32, 33 and 34 of the Dole Annual Report.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
There is hereby incorporated by reference the information appearing on pages
19 through 31 of the Dole Annual Report. See also Item 14 of this report.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
There have been no changes in the Company's independent auditors for the
1994 and 1993 fiscal years nor have there been any disagreements with the
Company's independent auditors on accounting principles or practices for
financial statement disclosures.
13
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
There is hereby incorporated by reference the information regarding the
Company's directors to appear under the caption "Election of Directors" in the
Company's definitive proxy statement for its 1995 Annual Meeting of Stockholders
(the "1995 Proxy Statement"). See the list of the Company's executive officers
and related information under "Executive Officers of the Registrant", which is
set forth in Part I hereof.
ITEM 11. EXECUTIVE COMPENSATION
There is hereby incorporated by reference the information to appear under
the captions "Remuneration of Directors" and "Compensation of Executive
Officers" in the 1995 Proxy Statement.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
There is hereby incorporated by reference the information with respect to
security ownership to appear under the captions "General Information",
"Beneficial Ownership of Certain Stockholders" and "Security Ownership of
Directors and Executive Officers" in the 1995 Proxy Statement.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There is hereby incorporated by reference the information to appear under
the caption "Certain Transactions" in the 1995 Proxy Statement.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(A) 1. FINANCIAL STATEMENTS:
The following consolidated financial statements are included in the Dole
Annual Report and are incorporated herein by reference:
<TABLE>
<CAPTION>
ANNUAL
REPORT
PAGES
-----------
<S> <C>
Consolidated Statements of Income -- fiscal years ended December 31, 1994, January 1, 1994 and
January 2, 1993............................................................................... 19
Consolidated Balance Sheets -- December 31, 1994 and January 1, 1994........................... 20
Consolidated Statements of Cash Flow -- fiscal years ended December 31, 1994, January 1, 1994
and January 2, 1993........................................................................... 21
Notes to Consolidated Financial Statements..................................................... 22-30
Report of Independent Public Accountants....................................................... 31
</TABLE>
2. FINANCIAL STATEMENT SCHEDULES:
<TABLE>
<CAPTION>
FORM 10-K
PAGES
-----------
<S> <C>
Independent Public Accountants' Report on Financial Statement Schedule...................... F-1
Schedule II -- Valuation and Qualifying Accounts............................................ F-2
</TABLE>
All other schedules are omitted because they are not applicable, not
required or the information is included elsewhere in the financial
statements or notes thereto.
14
<PAGE>
3. EXHIBITS:
<TABLE>
<CAPTION>
EXHIBIT
NO.
---------
<C> <S>
3.1 The Restated Articles of Association of the Company, as amended through July 30, 1991. Incorporated by
reference to Exhibit 3(a) to the Company's Annual Report on Form 10-K for the fiscal year ended December
28, 1991, File No. 1-4455.
3.2 By-Laws of the Company, as amended through March 25, 1993. Incorporated by reference to Exhibit 3.2 to
the Company's Annual Report on Form 10-K for the fiscal year ended January 1, 1994, File No. 1-4455.
4.1 Credit Agreement dated as of May 10, 1994 among the Company, Citicorp USA, Inc., as Administrative Agent
and Lender and the financial institutions which are Lenders thereunder, relating to the Company's $1
billion revolving credit facility. Incorporated by reference to Exhibit 10.1 to the Company's Quarterly
Report on Form 10-Q for the quarter ended June 18, 1994, File No.1-4455.
4.2 Indenture dated as of April 15, 1993 between the Company and Chemical Trust Company of California,
relating to $300 million of the Company's senior notes. Incorporated by reference to Exhibit 4.1 to the
Company's Current Report on Form 8-K, event date May 6, 1993, File No. 1-4455.
4.3 Indenture dated as of July 15, 1993 between the Company and Chemical Trust Company of California,
relating to $400 million of the Company's senior notes. Incorporated by reference to Exhibit 4 to the
Company's Current Report on Form 8-K, event date July 15, 1993, File No. 1-4455.
4.4 The Company agrees to furnish to the Securities and Exchange Commission upon request a copy of each
instrument with respect to issues of long-term debt of the Company and its subsidiaries, the authorized
principal amount of which does not exceed 10% of the consolidated assets of the Company and its
subsidiaries.
Executive Compensation Plans and Arrangements -- Exhibits 10.1 - 10.10:
10.1 The Company's 1991 Stock Option and Award Plan. Incorporated by reference to Exhibit 10(a) to the
Company's Annual Report on Form 10-K for the fiscal year ended December 28, 1991, File No. 1-4455.
10.2 The Company's 1982 Stock Option and Award Plan, as amended. Incorporated by reference to Exhibit 28(a) to
the Company's Report on Form S-8 filed on May 22, 1989, Registration No. 33-28782.
10.3 Dole Food Company, Inc. Executive Supplementary Retirement Plan (effective January 1, 1989), First
Restatement. Incorporated by reference to Exhibit 10(c) to Company's Annual Report on Form 10-K for the
fiscal year ended December 29, 1990, File No. 1-4455.
10.4 Bonus Agreement dated as of August 30, 1991 by and between the Company and David A. DeLorenzo, with
promissory note dated September 5, 1991 in the principal amount of $500,000 by David A. DeLorenzo in
favor of the Company. Incorporated by reference to Exhibit 10(e) to the Company's Annual Report on Form
10-K for the fiscal year ended December 28, 1991, File No. 1-4455.
10.5 Employment Agreement between the Company and Gerald W. LaFleur. Incorporated by reference to Exhibit
10(k) to the Company's Annual Report on Form 10-K for the fiscal year ended January 2, 1993, File No.
1-4455.
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO.
---------
10.6 Board of Directors Deferred Compensation Plan. Incorporated by reference to Exhibit 10.12 to the
Company's Annual Report on Form 10-K for the fiscal year ended January 1, 1994, File No. 1-4455.
<C> <S>
10.7 Dole Food Company, Inc. Annual Incentive Plan. Incorporated by reference to Exhibit 10.15 to the
Company's Annual Report on Form 10-K for the fiscal year ended January 1, 1994, File No. 1-4455.
10.8 Dole Food Company, Inc. Long-Term Incentive Plan. Incorporated by reference to Exhibit 10.16 to the
Company's Annual Report on Form 10-K for the fiscal year ended January 1, 1994, File No. 1-4455.
10.9 Dole Food Company, Inc. Executive Deferred Compensation Plan.
11 Computations of earnings per common share.
13 Dole Food Company, Inc. 1994 Annual Report for the fiscal year ended December 31, 1994. (This Report is
furnished for information of the Commission and, except for those portions thereof which are expressly
incorporated by reference herein, is not "filed" as a part of this Annual Report on Form 10-K.)
22 Subsidiaries of Dole Food Company, Inc.
23 Consent of Arthur Andersen LLP.
</TABLE>
(b) REPORTS ON FORM 8-K:
No current reports on Form 8-K were filed by the Company during the last
quarter of the year ended December 31, 1994.
16
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
DOLE FOOD COMPANY, INC.
Registrant
March 24, 1995 By /s/ DAVID H. MURDOCK
------------------------------------
David H. Murdock
Chairman of the Board and
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
<TABLE>
<C> <S> <C>
/s/ DAVID H. MURDOCK
---------------------------------------- Chairman of the Board and Chief March 24, 1995
David H. Murdock Executive Officer and Director
/s/ DAVID A. DeLORENZO
---------------------------------------- Executive Vice President and Director March 24, 1995
David A. DeLorenzo
/s/ MICHAEL S. KARSNER Vice President -- Treasurer and Chief
---------------------------------------- Financial and (Principal Financial March 24, 1995
Michael S. Karsner Officer)
/s/ PATRICIA A. McKAY
---------------------------------------- Vice President -- Finance and Controller March 24, 1995
Patricia A. McKay (Principal Accounting Officer)
/s/ ELAINE L. CHAO
---------------------------------------- Director March 24, 1995
Elaine L. Chao
/s/ MIKE CURB
---------------------------------------- Director March 24, 1995
Mike Curb
/s/ RICHARD M. FERRY
---------------------------------------- Director March 24, 1995
Richard M. Ferry
/s/ JAMES F. GARY
---------------------------------------- Director March 24, 1995
James F. Gary
/s/ FRANK J. HATA
---------------------------------------- Director March 24, 1995
Frank J. Hata
</TABLE>
17
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. PAGE
--------- -----
<C> <S> <C>
3.1 The Restated Articles of Association of the Company, as amended through July 30, 1991.
Incorporated by reference to Exhibit 3(a) to the Company's Annual Report on Form 10-K for the
fiscal year ended December 28, 1991, File No. 1-4455. ............................................
3.2 By-Laws of the Company, as amended through March 25, 1993. Incorporated by reference to Exhibit
3.2 to the Company's Annual Report on Form 10-K for the fiscal year ended January 1, 1994, File
No. 1-4455. ......................................................................................
4.1 Credit Agreement dated as of May 10, 1994 among the Company, Citicorp USA, Inc., as Administrative
Agent and Lender and the financial institutions which are Lenders thereunder, relating to the
Company's $1 billion revolving credit facility. Incorporated by reference to Exhibit 10.1 to the
Company's Quarterly Report on Form 10-Q for the quarter ended June 18, 1994, File No.1-4455. .....
4.2 Indenture dated as of April 15, 1993 between the Company and Chemical Trust Company of California,
relating to $300 million of the Company's senior notes. Incorporated by reference to Exhibit 4.1
to the Company's Current Report on Form 8-K, event date May 6, 1993, File No. 1-4455. ............
4.3 Indenture dated as of July 15, 1993 between the Company and Chemical Trust Company of California,
relating to $400 million of the Company's senior notes. Incorporated by reference to Exhibit 4 to
the Company's Current Report on Form 8-K, event date July 15, 1993, File No. 1-4455. .............
4.4 The Company agrees to furnish to the Securities and Exchange Commission upon request a copy of
each instrument with respect to issues of long-term debt of the Company and its subsidiaries, the
authorized principal amount of which does not exceed 10% of the consolidated assets of the Company
and its subsidiaries. ............................................................................
Executive Compensation Plans and Arrangements -- Exhibits 10.1 - 10.10:
10.1 The Company's 1991 Stock Option and Award Plan. Incorporated by reference to Exhibit 10(a) to the
Company's Annual Report on Form 10-K for the fiscal year ended December 28, 1991, File No.
1-4455. ..........................................................................................
10.2 The Company's 1982 Stock Option and Award Plan, as amended. Incorporated by reference to Exhibit
28(a) to the Company's Report on Form S-8 filed on May 22, 1989, Registration No. 33-28782. ......
10.3 Dole Food Company, Inc. Executive Supplementary Retirement Plan (effective January 1, 1989), First
Restatement. Incorporated by reference to Exhibit 10(c) to Company's Annual Report on Form 10-K
for the fiscal year ended December 29, 1990, File No. 1-4455. ....................................
10.4 Bonus Agreement dated as of August 30, 1991 by and between the Company and David A. DeLorenzo,
with promissory note dated September 5, 1991 in the principal amount of $500,000 by David A.
DeLorenzo in favor of the Company. Incorporated by reference to Exhibit 10(e) to the Company's
Annual Report on Form 10-K for the fiscal year ended December 28, 1991, File No. 1-4455. .........
10.5 Employment Agreement between the Company and Gerald W. LaFleur. Incorporated by reference to
Exhibit 10(k) to the Company's Annual Report on Form 10-K for the fiscal year ended January 2,
1993, File No. 1-4455. ...........................................................................
10.6 Board of Directors Deferred Compensation Plan. Incorporated by reference to Exhibit 10.12 to the
Company's Annual Report on Form 10-K for the fiscal year ended January 1, 1994, File No.
1-4455. ..........................................................................................
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO. PAGE
--------- -----
10.7 Dole Food Company, Inc. Annual Incentive Plan. Incorporated by reference to Exhibit 10.15 to the
Company's Annual Report on Form 10-K for the fiscal year ended January 1, 1994, File No.
1-4455. ..........................................................................................
<C> <S> <C>
10.8 Dole Food Company, Inc. Long-Term Incentive Plan. Incorporated by reference to Exhibit 10.16 to
the Company's Annual Report on Form 10-K for the fiscal year ended January 1, 1994, File No.
1-4455. ..........................................................................................
10.9 Dole Food Company, Inc. Executive Deferred Compensation Plan. ....................................
10.15 Incorporated by reference to Exhibit 10.12 to the Company's Annual Report on Form 10-K for the
fiscal year ended January 1, 1994, File No. 1-4455. ..............................................
10.16 Incorporated by reference to Exhibit 10.12 to the Company's Annual Report on Form 10-K for the
fiscal year ended January 1, 1994, File No. 1-4455. ..............................................
11 Computations of earnings per common share. .......................................................
13 Dole Food Company, Inc. 1994 Annual Report for the fiscal year ended December 31, 1994. (This
Report is furnished for information of the Commission and, except for those portions thereof which
are expressly incorporated by reference herein, is not "filed" as a part of this Annual Report on
Form 10-K.) ......................................................................................
22 Subsidiaries of Dole Food Company, Inc. ..........................................................
23 Consent of Arthur Andersen LLP. ..................................................................
</TABLE>
19
<PAGE>
INDEPENDENT PUBLIC ACCOUNTANTS REPORT ON
FINANCIAL STATEMENT SCHEDULE
To the Shareholders and Board of Directors
of Dole Food Company, Inc.:
We have audited in accordance with generally accepted auditing standards,
the consolidated financial statements included in Dole Food Company, Inc.'s
annual report to shareholders incorporated by reference in this Form 10-K, and
have issued our report thereon dated January 30, 1995. Our audit was made for
the purpose of forming an opinion on those statements taken as a whole. The
schedule listed in the preceding index is the responsibility of the Company's
management and presented for purposes of complying with the Securities and
Exchange Commission's rules and not part of the basic financial statements. This
schedule has been subjected to the auditing procedures applied in the audit of
the basic financial statements, and in our opinion, fairly states in all
material respects the financial data required to be set forth therein in
relation to the basic financial statements taken as a whole.
Arthur Andersen LLP
Los Angeles, California
January 30, 1995
F-1
<PAGE>
SCHEDULE II
DOLE FOOD COMPANY, INC. AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
<TABLE>
<CAPTION>
ADDITIONS
BALANCE AT CHARGED TO
BEGINNING COSTS AND BALANCE AT
OF YEAR EXPENSES DEDUCTIONS(A) END OF YEAR
----------- ----------- -------------- -----------
<S> <C> <C> <C> <C>
(IN THOUSANDS)
Year Ended December 31, 1994
Allowance for doubtful accounts
Trade receivables...................................... $ 18,396 $ 11,023 $ 4,198 25,221
Notes and other current receivables.................... 9,153 2,562 1,038 10,677
Long-term receivables.................................. 19,384 5,821 11,246 13,959
Year Ended January 1, 1994
Allowance for doubtful accounts
Trade receivables...................................... $ 15,203 $ 7,733 $ 4,540 18,396
Notes and other current receivables.................... 9,706 1,083 1,636 9,153
Long-term receivables.................................. 27,838 4,572 13,026 19,384
Year Ended January 2, 1993
Allowance for doubtful accounts
Trade receivables...................................... $ 13,681 $ 3,148 $ 1,626 15,203
Notes and and other current receivables................ 11,974 3,031 5,299 9,706
Long-term receivables.................................. 22,401 6,633 1,196 27,838
<FN>
------------------------
Note:
(A) Write-off of uncollectible amounts.
</TABLE>
F-2
<PAGE>
EXHIBIT 10.9
DOLE FOOD COMPANY, INC.
EXECUTIVE DEFERRED COMPENSATION PLAN
ADOPTED: FEBRUARY 2, 1995
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
Article 1
Purpose............................................................................... 1
Article 2
Definitions and Certain Provisions.................................................... 2
2.1 Annual Salary................................................................. 2
2.2 Annual Bonus.................................................................. 2
2.3 Beneficiary................................................................... 2
2.4 Board......................................................................... 2
2.5 Committee..................................................................... 2
2.6 Compensation.................................................................. 2
2.7 Declared Rate................................................................. 2
2.8 Deferral Account.............................................................. 2
2.9 Eligible Executive............................................................ 2
2.10 Enrollment Agreement.......................................................... 2
2.11 Excess Deferrals.............................................................. 2
2.12 Participant................................................................... 2
2.13 Payout Date................................................................... 2
2.14 Plan Year..................................................................... 2
2.15 Termination................................................................... 3
2.16 IRC Section401(a)17........................................................... 3
Article 3
Administration of the Plan............................................................ 4
3.1 Charter of the Committee...................................................... 4
3.2 Plan Interpretations Following a Change In Control............................ 4
Article 4
Participation......................................................................... 5
4.1 Election To Participate....................................................... 5
4.2 Deferral Options.............................................................. 5
4.3 Deferral Accounts............................................................. 5
4.4 Valuation of Accounts......................................................... 6
4.5 Statement of Accounts......................................................... 6
4.6 Refund of Deferrals........................................................... 6
Article 5
Benefits.............................................................................. 7
5.1 Benefit....................................................................... 7
5.2 Benefit Reelection............................................................ 7
5.3 Survivor Benefit.............................................................. 7
5.4 Emergency Benefit............................................................. 8
5.5 Early Payout.................................................................. 8
5.6 Small Benefit................................................................. 8
5.7 Withholding; Employment Taxes................................................. 8
Article 6
Beneficiary Designation............................................................... 9
Article 7
Arbitration........................................................................... 10
7.1................................................................................. 10
</TABLE>
i
<PAGE>
<TABLE>
<S> <C>
Article 8
Amendment and Termination of the Plan................................................. 12
8.1 Amendment..................................................................... 12
8.2 Termination................................................................... 12
Article 9
Miscellaneous......................................................................... 13
9.1 Unsecured General Creditor.................................................... 13
9.2 Obligations to Company........................................................ 13
9.3 Nonassignability.............................................................. 13
9.4 Protective Provisions......................................................... 13
9.5 Gender, Singular, and Plural.................................................. 13
9.6 Captions...................................................................... 13
9.7 Validity...................................................................... 13
9.8 Notice........................................................................ 14
9.9 Applicable Law................................................................ 14
</TABLE>
ii
<PAGE>
ARTICLE 1
PURPOSE
The purpose of the Dole Food Company, Inc. Executive Deferred Compensation
Plan (the "Plan") is to provide a means whereby Dole Food Company, Inc. (the
"Company") may extend the opportunity to defer salary and bonus on a pretax
basis to certain members of management.
The Plan is effective as of March 1, 1995. It shall have no application to
any persons who terminated their service prior to January 1, 1995, except as
otherwise expressly determined by the Committee.
1
<PAGE>
ARTICLE 2
DEFINITIONS AND CERTAIN PROVISIONS
2.1 ANNUAL SALARY. "Annual Salary" means base pay.
2.2 ANNUAL BONUS. "Annual Bonus" means the short-term incentive payout
made under the Dole Food Company, Inc. Annual Incentive Plan.
2.3 BENEFICIARY. "Beneficiary" means the person or persons designated as
such in accordance with Article 6.
2.4 BOARD. "Board" means the Board of Directors of the Company.
2.5 COMMITTEE. "Committee" means the Corporate Compensation & Benefits
Committee of the Board appointed to administer the Plan pursuant to Article 3.
2.6 COMPENSATION. "Compensation" means earnings as defined in the
Retirement Plan for Salaried Employees of Dole Food Company, Inc. and
Participating Divisions and Subsidiaries, excluding severance pay and ignoring
any IRS limitations, less deferrals under the Plan.
2.7 DECLARED RATE. "Declared Rate" means the interest rate for each Plan
Year established by the Committee in accordance with Article 4.3(a).
2.8 DEFERRAL ACCOUNT. "Deferral Account" means the account maintained on
the books of account of the Company for each Participant pursuant to Article
4.3.
2.9 ELIGIBLE EXECUTIVE. "Eligible Executive" means an employee designated
by the Committee who is expected to earn salary and bonus in excess of $150,000
(as indexed under IRC Section401(a)17).
2.10 ENROLLMENT AGREEMENT. "Enrollment Agreement" means the election form
that an Eligible Executive files with the Company to participate in the Plan.
2.11 EXCESS DEFERRALS. "Excess Deferrals" means deferrals which cause
Compensation to fall below the IRC Section401(a)17 limitation.
2.12 PARTICIPANT. "Participant" means an executive who has filed a
completed and executed Enrollment Agreement with the Committee and is
participating in the Plan in accordance with the provisions of Article 4.
2.13 PAYOUT DATE. "Payout Date" means the date on which the Participant
elected (in his enrollment form) to commence receiving deferred monies, but in
no event later than Termination.
2.14 PLAN YEAR. "Plan Year" means the calendar year beginning January 1
and ending December 31.
2.15 TERMINATION. "Termination" means termination of employment or
retirement other than by reason of death.
2.16 IRC SECTION401(A)17. "IRC Section401(a)17" refers to the section of
the Internal Revenue Code which limits earnings under qualified pension plans.
2
<PAGE>
ARTICLE 3
ADMINISTRATION OF THE PLAN
3.1 CHARTER OF THE COMMITTEE. This Plan shall be administered according to
the Revised Charter of the Corporate Compensation & Benefits Committee. The
provisions of the Revised Charter of the Corporate Compensation & Benefits
Committee, including any amendments thereto subsequently adopted, are
incorporated herein by reference as if set forth fully herein.
3.2 PLAN INTERPRETATIONS FOLLOWING A CHANGE IN CONTROL. Following a Change
in Control or an Event, any provisions of this Plan or the Revised Charter of
the Corporate Compensation & Benefits Committee which allow or purport to allow
the Plan Committee, any Company, or any fiduciary of the Plan discretionary
authority or power to construe and interpret the terms of the Plan shall be void
as applied to any dispute involving benefits which accrued under this Plan prior
to the Change in Control or Event. Accordingly, as to such disputes, an
arbitrator or court shall, following a Change in Control or Event, interpret the
Plan on a DE NOVO basis.
3
<PAGE>
ARTICLE 4
PARTICIPATION
4.1 ELECTION TO PARTICIPATE. An Eligible Executive may elect to
participate in the Plan effective as of the first day of the Plan Year by filing
a completed and fully executed Enrollment Agreement with the Committee prior to
the beginning of such Plan Year. The Committee also may permit any person who
first becomes an Eligible Executive on or after the first day of a Plan Year to
enroll in the Plan within 30 days following his eligibility. A separate
Enrollment Agreement must be completed for each Plan Year in which a Participant
makes deferrals under the Plan.
Pursuant to such Enrollment Agreement, the Participant shall irrevocably
elect the deferral option(s) in which he chooses to participate in accordance
with Article 4.2.
4.2 DEFERRAL OPTIONS. The following deferral options will be available to
Eligible Executives under the Plan, subject to the limitations and conditions
herein stated and such other limitations and conditions as the Committee may
impose, from time to time, in its complete and sole discretion.
(a) ANNUAL SALARY. An Eligible Executive may elect to defer a
specified percentage of his Annual Salary to be earned the following year. A
minimum deferral of ten percent (10%) of the Participant's Annual Salary is
required, and the maximum deferral allowed is one hundred percent (100%) of
the Participant's Annual Salary. Deferral elections between 10% and 100% may
be made in whole increments of 10%.
(b) ANNUAL BONUS. An Eligible Executive may elect to defer a specified
percentage of his Annual Bonus to be earned the following year. A minimum
deferral of ten percent (10%) of the Participant's Annual Bonus is required,
and the maximum deferral allowed is one hundred percent (100%) of the
Participant's Annual Bonus. Deferral elections between 10% and 100% may be
made in whole increments of 10%.
An Eligible Executive may elect deferral option (a) only, deferral option
(b) only, or deferral options (a) and (b).
A Participant may elect to discontinue deferrals during the year if he
satisfies the criteria set forth in Article 5.3 for receiving an Emergency
Benefit.
4.3 DEFERRAL ACCOUNTS. The Committee shall establish and maintain separate
Deferral Accounts for each Participant and every Payout Date.
The amount of a Participant's Annual Salary or Annual Bonus that is deferred
in accordance with Article 4.2 shall be credited to the Participant's Deferral
Accounts no later than the first day of the month following the month in which
such Annual Bonus and/or Annual Salary otherwise would have been paid. The
Deferral Accounts shall be debited by the amount of any payments made to the
Participant or the Participant's Beneficiary with respect to such Deferral
Accounts pursuant to the Plan.
(a) INTEREST ON DEFERRAL ACCOUNTS. Prior to the beginning of each Plan
Year a Declared Rate of interest will be established by the Committee for
that Plan Year. Interest will be credited on December 31 by multiplying the
annual Declared Rate by the average balance in the Deferral Accounts during
the preceding 12 months. The Declared Rate for a Plan Year applies both to
the amounts initially deferred for such Plan Year and to the amounts
previously credited to Deferral Accounts for previous Plan Years. The
Declared Rate will be established on an annual basis by the Committee.
4.4 VALUATION OF ACCOUNTS. The value of a Deferral Account as of any date
shall equal the amounts theretofore credited to such account, plus the interest
deemed to be earned on such account in accordance with Article 4.3 through the
day preceding such date, less the amounts theretofore debited to such account.
4
<PAGE>
4.5 STATEMENT OF ACCOUNTS. The Committee shall submit to each Participant,
within one hundred twenty (120) days after the close of each Plan Year, a
statement in such form as the Committee deems desirable setting forth the
balance standing to the credit of each Participant in each of his Deferral
Accounts.
4.6 REFUND OF DEFERRALS. If at the earlier of December 31 of any year and
Termination a Participant's Excess Deferrals are greater than zero, Excess
Deferrals will be refunded no later than December 31 in an amount sufficient to
cause Compensation to exceed the IRC Section401(a)17 limitation.
5
<PAGE>
ARTICLE 5
BENEFITS
5.1 BENEFIT. A Participant is eligible for a benefit under the Plan when
he has reached a Payout Date (as defined in Article 2). The benefit will be
based on the total value of the Participant's Deferral Accounts.
The benefit attributable to the amounts deferred for any Plan Year will be
paid at the time and in the manner that the Participant elects pursuant to the
Enrollment Agreement applicable to such Plan Year. Enrollment Agreements are
irrevocable.
The Enrollment Agreement shall provide that a Participant may elect a
benefit Payout Date with respect to each year's deferral either:
(a) Commencing January 1 in any year of the Participant's choosing other
than the year for which the deferrals are made; or
(b) Commencing the January 1 following his Termination, if later.
The Enrollment Agreement also shall provide that a Participant may further
elect to receive his retirement benefit in either a lump sum or annual
installments over 5, 10, or 15 years.
If the Participant elects to receive annual installments, the amount of each
installment will equal his Deferral Account amortized on a level basis at the
Declared Rate in effect immediately preceding the Payout Date.
5.2 BENEFIT REELECTION. Notwithstanding the Participant's Payout Date
election under Article 5.1, a Participant, prior to the occurrence of a Payout
Date, may elect to change said Payout Date to any subsequent January 1, provided
such re-election is made at least two years prior to the original payout date. A
Participant may make a Benefit Reelection only one time with respect to each
Payout Date.
5.3 SURVIVOR BENEFIT.
(a) If a Participant dies before the commencement of payment of his
retirement benefit, the Company will pay to the Participant's Beneficiary
the retirement benefit the Participant would have received had the
Participant terminated his service with the Company on the day prior to such
Participant's death, irrespective of when the Participant had elected to
receive payment of his retirement benefit. Such payment shall be made in
accordance with the method of payment (i.e., lump sum or installments) that
the Participant had elected for payment of his retirement benefit.
(b) If a Participant dies after the commencement of a payment of his
retirement benefit, the Company will pay to the Participant's Beneficiary
the remaining installments of any such benefit that would have been paid to
the Participant had the Participant survived.
5.4 EMERGENCY BENEFIT. In the event that the Committee, on written
petition of the Participant, determines, in its sole discretion, that the
Participant has suffered an unforeseeable financial emergency, the Company shall
pay to the Participant, as soon as practicable following such determination, an
amount up to the balance of his Deferral Account as necessary to meet the
emergency (the "Emergency Benefit"). For purposes of the Plan, an unforeseeable
financial emergency is an unexpected need for cash arising from an illness,
casualty loss, sudden financial reversal, or other such unforeseeable
occurrence. The amount of the benefits otherwise payable under the Plan shall
thereafter be adjusted to reflect the payment of the Emergency Benefit.
Applications for Emergency Benefits and the determinations thereon by the
Committee shall be in writing, and a Participant may be
6
<PAGE>
required to furnish written proof of the financial emergency. Any Participant
who receives an Emergency Benefit will be precluded from electing to make new
deferrals under the Plan until the next enrollment period that occurs at least
twelve (12) months following payment of the Emergency Benefit.
5.5 EARLY PAYOUT. Notwithstanding a Participant's election under Article
5.1, a Participant may elect to receive his entire Deferral Account in a single
lump-sum payment less fifteen percent (15%) immediately. Such Participant will
cease to become an Eligible Executive for the 12-month period commencing on the
Early Payout.
5.6 SMALL BENEFIT. In the event the Committee determines that the balance
of a Participant's Deferral Account is less than $25,000 at the time of
commencement of payment of his benefit, or that the portion of the balance of
the Participant's Deferral Account payable to any Beneficiary is less than
$25,000 at the time of commencement of payment of a survivor benefit to such
Beneficiary, the Company may pay the benefit in the form of a lump sum payment,
notwithstanding any provision of this Article 5 to the contrary. Such lump sum
payment shall be equal to the balance of the Participant's Deferral Account or
the portion thereof payable to a Beneficiary.
5.7 WITHHOLDING; EMPLOYMENT TAXES. To the extent required by the law in
effect at the time payments of deferred amounts are made, the Company shall
withhold from payments made hereunder the minimum taxes required to be withheld
by the federal or any state or local government.
7
<PAGE>
ARTICLE 6
BENEFICIARY DESIGNATION
Each Participant shall have the right, at any time, to designate any person
or persons as Beneficiary or Beneficiaries to whom payments under the Plan shall
be made in the event of the Participant's death prior to complete distribution
to the Participant of the benefits due under the Plan. Each Beneficiary
designation shall become effective only when filed in writing with the Committee
on a form prescribed or accepted by the Committee.
Any Participant shall have the right to designate a new Beneficiary at any
time by filing with the Committee a written request for such change, but any
such change shall become effective only on receipt of such request by the
Committee. On receipt by the Committee of such request, the change shall relate
back to and take effect as of the date the Participant signs such request,
whether or not the Participant is living at the time the Committee receives such
request.
If there is no designated Beneficiary living at the death of the Participant
when any payment hereunder shall be payable to a Beneficiary, then such payment
shall be made as follows:
To such Participant's wife or husband if living, and, if not
living, to such Participant's executors or administrators.
8
<PAGE>
ARTICLE 7
ARBITRATION
7.1(a) A Participant or, following the Participant's death, a Beneficiary
(collectively referred to in this section as "Claimant") may, if he desires,
submit any claim for payment under the Plan or any dispute regarding the
interpretation of the Plan to arbitration. This right to select arbitration
shall be solely that of the Claimant, and the Claimant may decide whether or not
to arbitrate in his discretion. The "right to select arbitration" does not
impose on the Claimant a requirement to submit a dispute for arbitration. The
Claimant may, in lieu of arbitration, bring an action in appropriate civil
court. The Claimant retains the right to select arbitration, even if a civil
action (including, without limitation, an action for declatory relief) is
brought by the Company or any other fiduciary of the Plan prior to the
commencement of arbitration. If arbitration is selected by the Claimant after a
civil action concerning the Claimant's dispute has been brought by a person
other than the Claimant, the Company, the trustee of any grantor trust that
holds assets for the purpose of making benefit payments under the Plan
("Trustee"), and the Claimant shall take such actions as are necessary or
appropriate, including dismissal of the civil action, so that the arbitration
can be timely heard. Once an arbitration is commenced, it may not be
discontinued without the unanimous consent of all parties to the arbitration.
During the lifetime of the Participant only he can use the arbitration procedure
set forth in this section.
(b) Any claim for arbitration may be submitted as follows: if the Claimant
disagrees with an interpretation of the Plan by the Company or any fiduciary of
the Plan, or disagrees with the calculation of his benefit under the Plan, such
claim may be filed in writing with an arbitrator of the Claimant's choice who is
selected by the method described in the next four sentences. The first step of
the selection shall consist of the Claimant submitting in writing a list of five
potential arbitrators to the Company and to the Trustee. Each of the five
arbitrators must be either (1) a member of the National Academy of Arbitrators
located in the state of the Claimant's principal residence or (2) a retired
California Superior Court or Appellate Court judge. Within one week after
receipt of the list, the Trustee and the Company shall jointly select one of the
five arbitrators as the arbitrator of the dispute in question. If the Trustee
and Company fail to select an arbitrator in a timely manner (including failure
to select an arbitrator by reason of disagreement between the Trustee and the
Company as to the arbitrator to be selected), the Claimant then shall designate
one of the five arbitrators as the arbitrator of the dispute in question.
(c) The arbitration hearing shall be held within seven days (or as soon
thereafter as possible) after the selection of the arbitrator. No continuance of
said hearing shall be allowed without the mutual consent of the Claimant, the
Trustee, and the Company. Absence from or nonparticipation at the hearing by any
party shall not prevent the issuance of an award. Hearing procedures that will
expedite the hearing may be ordered at the arbitrator's discretion, and the
arbitrator may close the hearing in his sole discretion when he decides he has
heard sufficient evidence to justify issuance of an award.
(d) The arbitrator's award shall be rendered as expeditiously as possible
and in no event later than one week after the close of the hearing. In the event
the arbitrator finds that the Claimant is entitled to the benefits he claimed,
the arbitrator shall order the Company and/or the Trustee to pay such benefits,
in the amounts and at such time as the arbitrator determines. The obligation of
the Trustee to pay such benefits shall not, however, exceed the assets of the
trust, and the Company shall be jointly and severally liable for any amount that
the Trustee is ordered to pay. The award of the arbitrator shall be final and
binding on the parties. The Company shall thereupon pay the Claimant immediately
the amount that the arbitrator orders to be paid in the manner described in the
award. The award may be enforced in any appropriate court as soon as possible
after its rendition. If any action is brought to confirm the award, no appeal
shall be taken by any party from any decision rendered in such action.
9
<PAGE>
(e) If the arbitrator determines either that the Claimant is entitled to
the claimed benefits or that the claim by the Claimant was made in good faith,
the arbitrator shall direct the Company to pay to the Claimant, and Company
agrees to pay to the Claimant in accordance with such order, an amount equal to
the Claimant's expenses in pursuing the claim, including attorneys' fees.
10
<PAGE>
ARTICLE 8
AMENDMENT AND TERMINATION OF THE PLAN
8.1 AMENDMENT. The Board may at any time amend the Plan in whole or in
part; provided, however, that (1) no such amendment shall be effective to
decrease the benefits accrued by any Participant prior to the date of such
amendment; (2) no such amendment shall, without the written consent of a
Participant, delay the date on which payment of the Participant's benefit is to
be made; and (3) no amendment shall modify the procedure set forth under Article
8.2(b), except as may apply to a Participant who consents in writing to such
amendment. Written notice of any amendment shall be given to each Participant in
the Plan.
8.2 TERMINATION.
(a) COMPANY'S RIGHT TO TERMINATE. The Board may at any time terminate
the Plan.
(b) PAYMENTS ON TERMINATION. On any termination of the Plan under this
Article 8.2, the Participants will be deemed to have voluntarily terminated
their participation under the Plan as of the date of such termination.
Annual Salary and Annual Bonus shall prospectively cease to be deferred for
the current Plan Year, and the Company will pay to each Participant the
value of each of the Participants' Deferral Accounts, determined as if each
had reached a Payout Date on the January 1 following the date of such
termination of the Plan.
11
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ARTICLE 9
MISCELLANEOUS
9.1 UNSECURED GENERAL CREDITOR. Participants and their Beneficiaries,
heirs, successors, and assigns shall have no legal or equitable rights, claims,
or interests in any specific property or assets of the Company, nor shall they
be, as a result of the Plan, beneficiaries of or have any rights, claims, or
interest in any life insurance policies, annuity contracts, or the proceeds
therefrom that may hereafter be owned or acquired by the Company ("Policies").
Such Policies or assets of the Company shall not be held under any trust for the
benefit of Participants, their Beneficiaries, heirs, successors, or assigns, or
held in any way as collateral security for the fulfilling of the obligations of
the Company under the Plan. Any and all of the Company's assets and Policies
shall be, and remain, the general, unpledged, unrestricted assets of the
Company. The Company's obligation under the Plan shall be merely that of any
unfunded and unsecured promise of the Company to pay money in the future.
9.2 OBLIGATIONS TO COMPANY. If a Participant becomes entitled to a
distribution of benefits under the Plan, and if at such time the Participant has
outstanding any debt, obligation, or other liability representing an amount
owing to the Company, then the Company may offset such amount owed to it against
the amount of benefits otherwise distributable. Such determination shall be made
by the Committee.
9.3 NONASSIGNABILITY. Neither a Participant nor any other person shall
have any right to commute, sell, assign, transfer, pledge, anticipate, mortgage,
or otherwise encumber, hypothecate, or convey in advance of actual receipt the
amounts, if any, payable hereunder, or any part thereof, or interest therein
that are, and all rights to which are expressly declared to be unassignable and
nontransferable. No part of the amounts payable shall, prior to actual payment,
be subject to seizure or sequestration for the payment of any debts, judgments,
alimony, or separate maintenance owed by a Participant or any other person, or
be transferable by operation of law in the event of a Participant's or any other
person's bankruptcy or insolvency.
9.4 PROTECTIVE PROVISIONS. Each Participant shall cooperate with the
Company by furnishing any and all information requested by the Company to
facilitate the payment of benefits hereunder.
9.5 GENDER, SINGULAR, AND PLURAL. All pronouns and any variations thereof
shall be deemed to refer to the masculine, feminine, or neuter, as the identity
of the person or persons may require. As the context may require, the singular
may be read as the plural and the plural as the singular.
9.6 CAPTIONS. The captions of the articles, sections, and paragraphs of
the Plan are for convenience only and shall not control or affect the meaning or
construction of any of its provisions.
9.7 VALIDITY. In the event any provision of the Plan is held invalid,
void, or unenforceable, the same shall not affect, in any respect whatsoever,
the validity of any other provision of the Plan.
9.8 NOTICE. Any notice or filing required or permitted to be given to the
Committee under the Plan shall be sufficient if in writing and hand delivered,
or sent by registered or certified mail, to the principal office of the Company,
directed to the attention of the Vice President - Human Resources of the
Company. Such notice shall be deemed given as of the date of delivery or, if
delivery is made by mail, as of the date shown on the postmark on the receipt
for registration or certification.
9.9 APPLICABLE LAW. The Plan shall be governed and construed in accordance
with the laws of the State of California.
12
<PAGE>
EXHIBIT 11
DOLE FOOD COMPANY, INC. AND SUBSIDIARIES
Computation of Earnings Per Common Share
(in thousands, except per share data)
<TABLE>
<CAPTION>
1994 1993 1992
-------- -------- --------
<S> <C> <C> <C>
PRIMARY
Income before cumulative effect of change
in accounting principle $ 67,883 $ 77,889 $ 65,213
Cumulative effect of change in accounting
principle -- -- (49,492)
-------- -------- --------
Net income applicable to common shares $ 67,883 $ 77,889 $ 15,721
-------- -------- --------
-------- -------- --------
Average number of common shares
outstanding during the year 59,472 59,441 59,408
Shares issuable upon exercise of stock
options at average prices during the
year 208 261 253
-------- -------- --------
Total primary shares 59,680 59,702 59,661
-------- -------- --------
-------- -------- --------
Primary earnings per common share
Income before cumulative effect of
change in accounting principle $ 1.14 $ 1.30 $ 1.09
Cumulative effect of change in accounting
principle -- -- (0.83)
-------- -------- --------
Net income $ 1.14 $ 1.30 $ 0.26
-------- -------- --------
-------- -------- --------
FULLY DILUTED
Income before cumulative effect of change
in accounting principle $ 67,883 $ 77,889 $ 65,213
Cumulative effect of change in accounting
principle -- -- (49,492)
-------- -------- --------
Net income applicable to common shares $ 67,883 $ 77,889 $ 15,721
-------- -------- --------
-------- -------- --------
Average number of common shares
outstanding during the year 59,472 59,441 59,408
Shares issuable upon exercise of stock
options at higher of average prices or end
of year prices 208 261 262
-------- -------- --------
Total fully diluted shares 59,680 59,702 59,670
-------- -------- --------
-------- -------- --------
Fully diluted earnings per common share
Income before cumulative effect of
change in accounting principle $ 1.14 $ 1.30 $ 1.09
Cumulative effect of change in accounting
principle -- -- (0.83)
-------- -------- --------
Net income $ 1.14 $ 1.30 $ 0.26
-------- -------- --------
-------- -------- --------
</TABLE>
<PAGE>
DOLE FOOD COMPANY, INC.
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
(IN THOUSANDS, EXCEPT PER SHARE DATA) 1994 1993 1992
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Revenue $3,841,566 $3,430,521 $3,375,492
Cost of products sold 3,239,041 2,880,502 2,862,729
----------------------------------------------------------------------------------------------------------------------------
Gross margin 602,525 550,019 512,763
Selling, marketing and administrative expenses 428,578 365,250 327,985
Cost reduction program -- 42,500 45,700
----------------------------------------------------------------------------------------------------------------------------
Operating income 173,947 142,269 139,078
Interest expense (88,930) (71,682) (72,777)
Interest income 11,907 12,464 15,846
Gain on sale of 18% of common stock of subsidiary -- 30,853 --
Other expense -- net (8,741) (15,815) (10,534)
----------------------------------------------------------------------------------------------------------------------------
Income before income taxes and cumulative effect of change in
accounting principle 88,183 98,089 71,613
Income taxes (20,300) (20,200) (6,400)
----------------------------------------------------------------------------------------------------------------------------
Income before cumulative effect of change in accounting principle 67,883 77,889 65,213
Cumulative effect of change in accounting principle -- -- (49,492)
----------------------------------------------------------------------------------------------------------------------------
Net income $ 67,883 $ 77,889 $ 15,721
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
Earnings per common share, primary and fully diluted
Income before cumulative effect of change in accounting principle $ 1.14 $ 1.30 $ 1.09
Cumulative effect of change in accounting principle -- -- (.83)
----------------------------------------------------------------------------------------------------------------------------
Net income $ 1.14 $ 1.30 $ .26
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
19
<PAGE>
DOLE FOOD COMPANY, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
(IN THOUSANDS, EXCEPT SHARES OUTSTANDING) 1994 1993
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Current assets
Cash and short-term investments $ 46,566 $ 37,497
Receivables -- net 510,221 407,554
Inventories 558,400 553,428
Real estate development inventory 183,492 105,900
Prepaid expenses 47,320 37,970
----------------------------------------------------------------------------------------------------------------------------
Total current assets 1,345,999 1,142,349
Real estate developments 341,526 288,217
Investments 65,633 34,071
Property, plant and equipment -- net 1,926,453 1,767,089
Long-term receivables -- net 54,487 70,653
Other assets 114,584 85,540
----------------------------------------------------------------------------------------------------------------------------
$3,848,682 $3,387,919
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
Current liabilities
Notes payable $ 50,366 $ 64,050
Current portion of long-term debt 3,450 14,612
Accounts payable 212,859 163,966
Accrued liabilities 438,451 417,524
----------------------------------------------------------------------------------------------------------------------------
Total current liabilities 705,126 660,152
Long-term debt 1,554,504 1,158,297
Deferred income taxes and other long-term liabilities 483,730 430,014
Minority interests 24,681 87,342
Common shareholders' equity
Common stock (shares outstanding: 1994 -- 59,478,108; 1993 -- 59,455,918) 320,121 320,099
Additional paid-in capital 165,541 164,908
Retained earnings 634,717 596,573
Cumulative foreign currency translation adjustment (39,738) (29,466)
----------------------------------------------------------------------------------------------------------------------------
Total common shareholders' equity 1,080,641 1,052,114
----------------------------------------------------------------------------------------------------------------------------
$3,848,682 $3,387,919
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
20
<PAGE>
DOLE FOOD COMPANY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOW
<TABLE>
<CAPTION>
(IN THOUSANDS) 1994 1993 1992
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operating activities
Net income $ 67,883 $ 77,889 $ 15,721
Adjustments to net income
Depreciation and amortization 147,670 132,623 109,631
Undistributed equity earnings (2,470) (3,306) (1,880)
Gain on sale of subsidiary stock -- (30,853) --
Provision (benefit) for deferred income taxes 8,530 649 (33,408)
Cumulative effect of accounting change -- -- 49,492
Charge for cost reduction program -- 42,500 45,700
Other 1,232 (963) (585)
Change in operating assets and liabilities, net of effects from acquisitions
Receivables -- net (107,540) (18,603) (22,024)
Inventories 2,007 16,477 4,609
Prepaid expenses (9,062) (8,222) 1,947
Real estate developments (77,032) (22,598) (86,990)
Other assets (28,673) (23,145) (14,345)
Accounts payable and accrued liabilities 53,460 (31,296) (35,113)
Income taxes payable 8,558 (5,636) 13,929
Other 5,010 5,146 (13,043)
----------------------------------------------------------------------------------------------------------------------------
Cash flow from operations 69,573 130,662 33,641
Investing activities
Proceeds from property disposals 17,657 17,140 5,917
Capital additions (239,717) (218,659) (191,745)
Purchase price of acquisitions, net of acquired cash (93,115) (107,996) (14,342)
Purchases of investments -- net (3,286) (181) (5,002)
Purchase of minority interest in subsidiary (85,000) -- --
Other (614) 1,659 2,776
----------------------------------------------------------------------------------------------------------------------------
Cash flow used in investing activities (404,075) (308,037) (202,396)
Financing activities
Short-term borrowings 54,213 78,244 149,184
Repayments of short-term debt (69,202) (117,014) (134,313)
Long-term borrowings 415,185 687,782 359,480
Repayments of long-term debt (34,004) (542,487) (166,734)
Cash dividends paid (23,791) (23,784) (23,763)
Net proceeds on sale of subsidiary common stock -- 73,595 --
Other 1,170 1,264 568
----------------------------------------------------------------------------------------------------------------------------
Cash flow from financing activities 343,571 157,600 184,422
Increase (decrease) in cash and short-term investments 9,069 (19,775) 15,667
Cash and short-term investments at beginning of year 37,497 57,272 41,605
----------------------------------------------------------------------------------------------------------------------------
Cash and short-term investments at end of year $ 46,566 $ 37,497 $ 57,272
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
21
<PAGE>
DOLE FOOD COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 -- SUMMARY OF ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION -- The consolidated financial statements include the
accounts of Dole Food Company, Inc. and all significant majority-owned
subsidiaries ("the Company").
ANNUAL CLOSING DATE -- The Company's fiscal year ends on the Saturday closest to
December 31. Fiscal years 1994, 1993 and 1992 ended on December 31, 1994,
January 1, 1994 and January 2, 1993, respectively. Fiscal years 1994 and 1993
each had 52 weeks and fiscal year 1992 had 53 weeks.
INVENTORIES -- Inventories are stated at the lower of cost or market. Cost is
determined principally on a first-in, first-out basis. Specific identification
and average cost methods are also used for packing materials and operating
supplies.
AGRICULTURAL COSTS -- The costs of growing bananas and pineapples are charged to
operations as incurred. Growing costs related to other crops are recognized when
the crops are harvested and sold.
REAL ESTATE DEVELOPMENTS -- Real estate developments are carried at cost, not in
excess of net realizable value. Costs which are directly related to land
development and construction are capitalized and amortized to cost of sales as
closings occur. Profit from the sale of land and residential units is recognized
when closings have occurred and other criteria for sale and profit recognition
are satisfied in accordance with generally accepted accounting principles.
INVESTMENTS -- Investments in affiliates with ownership of 20% to 50% are
generally recorded on the equity method.
PROPERTY, PLANT AND EQUIPMENT -- Property, plant and equipment are stated at
cost, less accumulated depreciation. Depreciation is computed principally by the
straight-line method over the estimated useful lives of the assets.
FOREIGN EXCHANGE -- The U.S. dollar is the functional currency for substantially
all of Dole's consolidated operations. Net foreign exchange gains or losses for
companies with the U.S. dollar as their functional currency are included in
determining net income and resulted in net losses of $3.5 million, $3.6 million
and $2.4 million, for 1994, 1993 and 1992, respectively. Net exchange gains or
losses resulting from the translation of assets and liabilities of foreign
subsidiaries whose local currency is the functional currency are accumulated in
a separate component of common shareholders' equity.
INCOME TAXES -- Deferred income taxes are recognized for the tax consequences of
temporary differences by applying enacted statutory tax rates to the differences
between financial statement carrying amounts and the tax bases of assets and
liabilities. The income taxes which would be due upon the distribution of
foreign subsidiary earnings have not been provided where the undistributed
earnings are considered permanently invested.
EARNINGS PER COMMON SHARE -- Primary earnings per common share are based on the
weighted average number of shares outstanding during the period after
consideration of the dilutive effect of stock options and restricted stock
awards. The primary weighted average number of common shares outstanding was
59.7 million for 1994, 1993 and 1992.
CASH AND SHORT-TERM INVESTMENTS -- Cash and short-term investments include cash
on hand and time deposits. Such short-term investments generally have maturities
of three months or less at the time of purchase.
FAIR VALUE OF FINANCIAL INSTRUMENTS -- For short-term financial instruments, the
historical carrying amount is a reasonable estimate of fair value. For long-term
financial instruments not readily marketable, fair values were estimated based
upon discounted future cash flows at prevailing market interest rates. Based on
these assumptions, management believes the fair market values of the Company's
financial instruments other than certain debt instruments (see Note 6) are not
materially different from their recorded amounts as of December 31, 1994 and
January 1, 1994.
RECLASSIFICATIONS -- Certain prior year amounts have been reclassified to
conform to the 1994 presentation.
22
<PAGE>
NOTE 2 -- ACQUISITIONS
During 1994, the Company acquired certain businesses for an aggregate purchase
price of approximately $94 million. These acquisitions included a 35% interest
in a produce distribution company in the United Kingdom, as well as various
other food and food related operations. The Company also purchased three
commercial real estate properties. In 1993, the Company invested $117 million to
acquire various businesses including a French dried fruit and nut business,
three French banana ripening and distribution companies, two affiliated fruit
juice businesses and five commercial real estate properties. The purchase
agreement related to the 1993 acquisition of the fruit juice businesses provides
for potential additional consideration to be paid based upon future operating
results.
Each of these acquisitions was accounted for as a purchase and, accordingly, the
purchase price was allocated to the net assets acquired based upon their
estimated fair values at the date of acquisition. The fair values of assets
acquired and liabilities assumed in connection with the 1994 acquisitions
totaled $121 million (including cash of $1 million) and $27 million,
respectively, and $200 million (including cash of $9 million) and $83 million,
respectively, for the 1993 acquisitions.
NOTE 3 -- SUBSIDIARY STOCK TRANSACTIONS
During the first quarter of 1993, approximately 18% or 5.4 million shares of the
common stock of the Company's residential real estate development company,
Castle & Cooke Homes, Inc., was sold at $15 per share through an initial public
offering. Net proceeds from the sale totaled approximately $74 million and
resulted in a gain of approximately $31 million ($18 million, net of tax).
During the fourth quarter of 1994, the Company acquired the minority
shareholders' interest in Castle & Cooke Homes, Inc. through a cash tender offer
for $15.75 per share, or for an aggregate purchase price of $85 million
including related expenses. This transaction was accounted for as a purchase.
The excess of the purchase price over the book basis of the minority interest
acquired, after consideration of related tax effects, was allocated to real
estate developments.
NOTE 4 -- CURRENT ASSETS AND LIABILITIES
Short-term investments of $8.3 million and $11.7 million in 1994 and 1993,
respectively, consisted principally of time deposits. Outstanding checks which
are funded as presented for payment totaled $38.9 million and $31.7 million in
1994 and 1993, respectively, and were included in accounts payable.
Details of certain current assets were as follows:
<TABLE>
<CAPTION>
(IN THOUSANDS) 1994 1993
--------------------------------------------------------
<S> <C> <C>
Receivables
Trade $394,806 $290,507
Notes and other 144,019 130,253
Affiliated operations 7,294 14,343
--------------------------------------------------------
546,119 435,103
Allowance for doubtful accounts (35,898) (27,549)
--------------------------------------------------------
$510,221 $407,554
--------------------------------------------------------
--------------------------------------------------------
Inventories
Finished products $205,922 $213,753
Raw materials and work in progress 138,152 160,635
Growing crop costs 36,605 38,509
Packing materials 96,729 69,843
Operating supplies and other 80,992 70,688
--------------------------------------------------------
$558,400 $553,428
--------------------------------------------------------
--------------------------------------------------------
</TABLE>
Accrued liabilities in 1994 and 1993 included approximately $84.6 million and
$104.6 million, respectively, of amounts due to growers.
In 1992, the Company implemented a worldwide cost reduction program which
involved employee reductions, facility consolidations and aggressive efforts to
reduce procurement and other costs and to enhance productivity. The Company
recorded a charge in the fourth quarter of 1992 of $45.7 million for severance
and costs associated with these undertakings. In 1993, in line with its
continued cost reduction and profit improvement efforts, the Company targeted
additional operations for closure and consolidation, resulting in a fourth
quarter charge of $42.5 million. Accrued liabilities in 1994 and 1993 reflected
approximately $12.2 million and $45.9 million, respectively, of amounts related
to these programs.
23
<PAGE>
NOTE 5 -- PROPERTY, PLANT AND EQUIPMENT
Major classes of property, plant and equipment were as follows:
<TABLE>
<CAPTION>
(IN THOUSANDS) 1994 1993
------------------------------------------------------
<S> <C> <C>
Land and land improvements $ 769,315 $ 681,353
Buildings and improvements 619,918 499,680
Machinery and equipment 1,038,734 921,031
Construction in progress 95,238 153,934
------------------------------------------------------
2,523,205 2,255,998
Accumulated depreciation (596,752) (488,909)
------------------------------------------------------
$1,926,453 $1,767,089
------------------------------------------------------
------------------------------------------------------
</TABLE>
Depreciation expense for 1994, 1993 and 1992 totaled $134.3 million, $120.8
million and $106.6 million, respectively.
At December 31, 1994, the Company had remaining commitments to spend
approximately $12 million for vessels for its fresh fruit operations.
NOTE 6 -- DEBT
Notes payable consisted primarily of short-term borrowings required to fund
certain foreign operations and totaled $50.4 million with a weighted average
interest rate of 6.2% at the end of 1994, and $64.1 million with a weighted
average interest rate of 9.6% at the end of 1993.
Long-term debt consisted of:
<TABLE>
<CAPTION>
(IN THOUSANDS) 1994 1993
-----------------------------------------------------------
<S> <C> <C>
Unsecured debt
Notes payable to banks at an
average interest rate of 6.2%
(3.9% -- 1993) $ 835,598 $ 397,807
6.75% notes due 2000 225,000 225,000
7% notes due 2003 300,000 300,000
7.875% debentures due 2013 175,000 175,000
Various other notes due 1995 --
2006 at an average interest rate
of 5.2% (7.2% -- 1993) 7,840 16,604
Secured debt
Mortgages, contracts and notes
due 1995-2007, at an average
interest rate of 9.6%
(6.7% -- 1993) 17,608 61,967
Unamortized debt discount and
issue costs (3,092) (3,469)
-----------------------------------------------------------
1,557,954 1,172,909
Current maturities (3,450) (14,612)
-----------------------------------------------------------
$1,554,504 $1,158,297
-----------------------------------------------------------
-----------------------------------------------------------
</TABLE>
On May 6, 1993 and July 27, 1993, the Company sold $300 million and $400
million, respectively, of unsecured noncallable notes in public offerings. The
$300 million notes bear interest at 7% and mature in 2003. The $400 million
issuance is comprised of $225 million notes bearing interest at 6.75% and
maturing in 2000 and $175 million notes bearing interest at 7.875% and maturing
in 2013. The Company estimates the fair value of its fixed interest rate
unsecured debt based on current quoted market prices. The estimated fair value
was $628 million at December 31, 1994. At January 1, 1994, the estimated fair
value approximated book value.
In November 1993, the Company entered into a $400 million, 364-day revolving
credit facility. There were no borrowings outstanding under this facility at
January 1, 1994. In May 1994, the Company replaced its $400 million facility
with a $1 billion, 5-year revolving credit facility ("Facility"). At the
Company's option, borrowings under the Facility bear interest at the agent's
prime rate or at a certain percentage over the London Interbank Offered Rate
("LIBOR"). Provisions under the Facility require the Company to comply with
certain financial covenants which include a maximum permitted ratio of
consolidated debt to net worth and a minimum required fixed charge coverage
ratio. At December 31, 1994, net borrowings outstanding under this Facility
totaled approximately $771 million.
The Company may also borrow under uncommitted lines of credit at rates offered
from time to time by various banks that may or may not be lenders under the
Facility. Net borrowings outstanding under the uncommitted lines of credit
totaled $65.0 million and $397.8 million at December 31, 1994 and January 1,
1994, respectively.
At January 1, 1994, Castle & Cooke Homes, Inc. had borrowings under its $100
million revolving credit facility totaling $47.7 million with a weighted average
interest rate of 5.5%. During 1994, this credit facility was amended to increase
available borrowings from $100 million to $135 million. In December 1994, in
conjunction with the Company's tender offer, all borrowings outstanding under
this credit agreement were refinanced using the Company's Facility, at which
time the Castle & Cooke Homes, Inc. credit facility was terminated.
Sinking fund requirements and maturities with respect to long-term debt at
December 31, 1994 were as follows (in millions): 1996 -- $4.5; 1997 -- $2.1;
1998 -- $1.9; 1999 -- $837.4; and thereafter -- $708.6.
24
<PAGE>
Interest payments during 1994, 1993 and 1992, net of amounts capitalized,
totaled $90.2 million, $60.0 million and $75.9 million, respectively. Interest
costs of $7.0 million, $4.4 million and $5.4 million were capitalized in 1994,
1993 and 1992, respectively, pertaining to constructed assets.
NOTE 7 -- EMPLOYEE BENEFIT PLANS
The Company has qualified defined benefit pension plans covering certain
full-time employees. Benefits under these plans are generally based on each
employee's eligible compensation, except for certain hourly plans which are
based on negotiated benefits and years of service.
For U.S. plans, the Company's funding policy is to fund the net periodic pension
cost plus a 15-year amortization of the unfunded liability. The plans covering
foreign employees are generally not funded.
The status of the plans was as follows:
<TABLE>
<CAPTION>
(IN THOUSANDS) 1994 1993
-------------------------------------------------------------
<S> <C> <C>
Actuarial present value of
accumulated benefit obligation
Vested $233,202 $248,492
Non-vested 14,001 16,866
-------------------------------------------------------------
$247,203 $265,358
-------------------------------------------------------------
Actuarial present value of projected
benefit obligation $265,158 $282,765
Plan assets at fair value, primarily
stocks and bonds 220,229 241,262
-------------------------------------------------------------
Projected benefit obligation in excess
of plan assets (44,929) (41,503)
Unrecognized net transition
obligation 2,646 2,167
Unrecognized prior service cost 6,244 6,763
Unrecognized net loss 17,447 13,320
Additional minimum liability (11,612) (9,120)
-------------------------------------------------------------
Accrued pension liability $(30,204) $(28,373)
-------------------------------------------------------------
-------------------------------------------------------------
</TABLE>
For U.S. plans, the projected benefit obligation was determined using an assumed
discount rate of 8.5% in 1994 and 7.25% in 1993, and an assumed rate of increase
in future compensation levels of 5% in both 1994 and 1993. The expected
long-term rate of return on assets was 9% in both years. For non-U.S. plans, the
projected benefit obligation was determined using assumed discount rates of 12%
to 20% in 1994 and 12% to 15% in 1993, and assumed rates of increase in future
compensation levels of 10% to 17.5% in 1994 and 10% to 13% in 1993. The expected
long-term rate of return on assets for non-U.S. plans was 12% to 20% in 1994 and
12% to 15% in 1993.
Pension expense included the following components:
<TABLE>
<CAPTION>
(IN THOUSANDS) 1994 1993 1992
-----------------------------------------------------------
<S> <C> <C> <C>
Service cost-benefits earned
during the year $ 8,049 $ 6,600 $ 6,691
Interest cost on projected
benefit obligation 21,232 21,737 20,894
Actual (return) loss
on plan assets 4,954 (33,136) (16,675)
Net amortization and deferral (24,325) 14,125 (2,085)
-----------------------------------------------------------
$ 9,910 $ 9,326 $ 8,825
-----------------------------------------------------------
-----------------------------------------------------------
</TABLE>
The Company has several 401(k) plans generally covering full-time U.S. employees
with at least one year of continuous service. Eligible employees may defer a
percentage of their annual compensation up to a maximum allowable under federal
income tax law to supplement their retirement income. These plans provide for
Company contributions based on a certain percentage of each participant's
contribution. Total Company contributions to these plans for 1994, 1993 and 1992
were $4.9 million, $4.8 million and $4.3 million, respectively.
The Company is also a party to various industrywide collective bargaining
agreements which also provide pension benefits. Total contributions to these
plans plus direct payments to pensioners were $1.5 million in 1994, $1.9 million
in 1993 and $3.0 million in 1992.
In addition to providing pension benefits, the Company provides certain health
care and life insurance benefits for eligible retired employees. Certain
employees may become eligible for such benefits if they fulfill established
requirements upon reaching retirement age.
In 1992, the Company implemented Statement of Financial Accounting Standards No.
106, "Employers' Accounting for Postretirement Benefits Other Than Pensions."
This statement, among other changes, requires companies to accrue the projected
costs of retiree benefits during the employee's active service period. The
Company elected to immediately recognize the accumulated postretirement benefit
obligation as of December 29, 1991 of $82.5 million ($49.5 million, net of tax).
25
<PAGE>
The status of the plans was as follows:
<TABLE>
<CAPTION>
(IN THOUSANDS) 1994 1993
------------------------------------------------------
<S> <C> <C>
Accumulated postretirement
benefit obligation ("APBO")
Retirees $63,809 $61,993
Fully eligible actives 9,886 20,560
Other actives 9,042 15,511
------------------------------------------------------
82,737 98,064
Unrecognized prior service cost 1,516 (92)
Unrecognized net gain (loss) 4,447 (9,347)
------------------------------------------------------
Accrued postretirement
benefit liability $88,700 $88,625
------------------------------------------------------
------------------------------------------------------
</TABLE>
Net periodic postretirement benefit cost included the following components:
<TABLE>
<CAPTION>
(IN THOUSANDS) 1994 1993
------------------------------------------------------------
<S> <C> <C>
Service cost -- benefits earned during
the year $ 609 $ 852
Interest cost on APBO 7,044 7,751
Net amortization and deferral 35 5
------------------------------------------------------------
Net periodic postretirement
benefit cost $7,688 $8,608
------------------------------------------------------------
------------------------------------------------------------
</TABLE>
For U.S. plans, an annual rate of increase in the per capita cost of covered
health care benefits of 13.0% in 1995 decreasing to 5.5% in 2010 and thereafter
was assumed in determining the APBO for 1994, and 13.5% in 1994 decreasing to
5.5% in 2010 was assumed in determining the APBO for 1993. For the Company's
foreign plan, the assumed health care cost trend rate was 20% in 1994 and 15% in
1993. The health care cost trend rate assumption has a significant effect on the
amounts reported. Increasing the assumed health care cost trend rate by one
percentage point in each year would have resulted in an increase in the
Company's APBO as of December 31, 1994 of approximately $8.9 million and the
aggregate of the service and interest cost components of net periodic
postretirement benefit cost for 1994 of approximately $1.0 million. The weighted
average discount rate used in determining the APBO was 8.5% in 1994 and 7.25% in
1993 for U.S. plans and 20% in 1994 and 15% in 1993 for the foreign plan. The
plans are not funded.
The Company provides postemployment benefits to certain former and inactive
employees. The Company adopted Statement of Financial Accounting Standards No.
112, "Employers' Accounting for Postemployment Benefits" as of the beginning of
1994. This accounting standard requires the accrual of the cost of
postemployment benefits over the employees' years of service. The cumulative
effect of adopting this new standard was not significant.
NOTE 8 -- STOCK OPTIONS AND AWARDS
Under the 1991 and 1982 Stock Option and Award Plans ("the Plans"), the Company
can grant incentive stock options, non-qualified stock options, stock
appreciation rights, restricted stock awards and performance share awards to
officers and key employees of the Company. Stock options may be exercised for up
to ten years from the date of grant with or without stock appreciation rights,
as determined by the committee of the Company's Board of Directors administering
the Plans. No stock appreciation rights or performance share awards were
outstanding at December 31, 1994.
Changes in outstanding stock options were as follows:
<TABLE>
<CAPTION>
AVERAGE
SHARES PRICE
-------------------------------------------------------
<S> <C> <C>
Outstanding, December 28, 1991 1,517,349 $29.91
Granted 40,000 32.14
Exercised (9,717) 27.96
Cancelled (51,902) 38.00
-------------------------------------------------------
Outstanding, January 2, 1993 1,495,730 29.70
Granted 411,850 33.12
Exercised (41,733) 27.88
Cancelled (146,065) 36.52
-------------------------------------------------------
Outstanding, January 1, 1994 1,719,782 29.98
Granted 508,500 29.07
Exercised (12,117) 26.69
Cancelled (160,401) 34.39
-------------------------------------------------------
Outstanding, December 31, 1994 2,055,764 $29.43
-------------------------------------------------------
-------------------------------------------------------
Exercisable, December 31, 1994 1,345,619 $28.94
-------------------------------------------------------
-------------------------------------------------------
</TABLE>
During 1992, the Company granted 27,500 restricted stock awards to key
employees. These awards become fully vested over a five-year period from the
date of grant. At December 31, 1994, 15,000 restricted stock awards were
outstanding.
NOTE 9 -- SHAREHOLDERS' EQUITY
Authorized capital at December 31, 1994 consisted of 80 million shares of no par
value common stock and 30 million shares of no par value preferred stock,
issuable in series. At December 31, 1994, approximately 3.7 million shares of
common stock were reserved for issuance under the Company's Stock Option and
Award Plans. There was no preferred stock outstanding.
The Company's dividend policy is to pay quarterly dividends on common shares at
an annual rate of 40 cents per share. Dividends declared in 1994 included the
regular 10 cents per share dividend related to the first quarter of 1995.
26
<PAGE>
Changes in shareholders' equity were as follows:
<TABLE>
<CAPTION>
CUMULATIVE
FOREIGN TOTAL
ADDITIONAL CURRENCY COMMON COMMON
COMMON PAID-IN RETAINED TRANSLATION SHAREHOLDERS' SHARES
(IN THOUSANDS, EXCEPT SHARE DATA) STOCK CAPITAL EARNINGS ADJUSTMENT EQUITY OUTSTANDING
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance, December 28, 1991 $320,036 $163,139 $550,510 $(24,245) $1,009,440 59,393,943
Net income -- -- 15,721 -- 15,721 --
Cash dividends declared ($.40 per share) -- -- (23,763) -- (23,763) --
Translation adjustments -- -- -- (948) (948) --
Other 21 547 -- -- 568 20,712
-----------------------------------------------------------------------------------------------------------------------------
Balance, January 2, 1993 320,057 163,686 542,468 (25,193) 1,001,018 59,414,655
Net income -- -- 77,889 -- 77,889 --
Cash dividends declared ($.40 per share) -- -- (23,784) -- (23,784) --
Translation adjustments -- -- -- (4,273) (4,273) --
Other 42 1,222 -- -- 1,264 41,263
-----------------------------------------------------------------------------------------------------------------------------
Balance, January 1, 1994 320,099 164,908 596,573 (29,466) 1,052,114 59,455,918
Net income -- -- 67,883 -- 67,883 --
Cash dividends declared ($.50 per share) -- -- (29,739) -- (29,739) --
Translation adjustments -- -- -- (10,272) (10,272) --
Other 22 633 -- -- 655 22,190
-----------------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1994 $320,121 $165,541 $634,717 $(39,738) $1,080,641 59,478,108
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE 10 -- CONTINGENCIES
The Company is contingently liable as joint indemnitors on surety bonds related
to its real estate development operations. Outstanding bond commitments
approximated $143 million at December 31, 1994.
The Company was contingently liable for guarantees of indebtedness aggregating
approximately $46 million at December 31, 1994. These guarantees were issued on
behalf of certain key fruit suppliers.
The Company is involved from time to time in various claims and legal actions
incident to its operations, both as plaintiff and defendant. In the opinion of
management, after consultation with legal counsel, none of such claims is
expected to have a material adverse effect on the Company.
NOTE 11 -- LEASE COMMITMENTS
The Company has obligations under non-cancelable operating leases, primarily for
ship charters and containers, and certain equipment and office facilities. Lease
terms are generally for less than the economic life of the property. Certain
agricultural land leases provide for increases in minimum rentals based on
production. Total rental expense was $178.7 million, $168.5 million and $171.1
million (net of sublease income of $13.3 million, $19.1 million and $39.2
million) for 1994, 1993 and 1992, respectively.
At December 31, 1994, the aggregate minimum rental commitments, before future
sublease income, were as follows (in millions): 1995 -- $99.1; 1996 -- $66.8;
1997 -- $43.6; 1998 -- $15.2; 1999 -- $10.6 and thereafter -- $57.1. Future
sublease income totaled $21.5 million.
27
<PAGE>
NOTE 12 -- INCOME TAXES
In 1992, the Company adopted Statement of Financial Accounting Standards No.
109, "Accounting for Income Taxes" and elected to apply the provisions
retroactively to 1989. Accordingly, retained earnings at December 30, 1989 were
reduced by $31.7 million, the cumulative effect of the change in the method of
accounting for income taxes.
Income tax expense (benefit) was as follows:
<TABLE>
<CAPTION>
(IN THOUSANDS) 1994 1993 1992
--------------------------------------------------------------
<S> <C> <C> <C>
Current
Federal, state and local $ (9,651) $ 5,926 $ 20,472
Foreign 21,421 13,625 19,336
--------------------------------------------------------------
11,770 19,551 39,808
--------------------------------------------------------------
Deferred
Federal, state and local 3,446 6,034 (33,408)
Foreign 5,084 (5,385) --
--------------------------------------------------------------
8,530 649 (33,408)
--------------------------------------------------------------
$20,300 $20,200 $ 6,400
--------------------------------------------------------------
--------------------------------------------------------------
</TABLE>
Pretax earnings attributable to foreign operations were $165 million, $145
million and $163 million for 1994, 1993 and 1992, respectively. Undistributed
earnings of foreign subsidiaries, which have been or are intended to be
permanently invested, aggregated $909 million at December 31, 1994.
The Company's reported income tax expense varied from the expense calculated
using the U.S. federal statutory tax rate for the following reasons:
<TABLE>
<CAPTION>
(IN THOUSANDS) 1994 1993 1992
--------------------------------------------------------------
<S> <C> <C> <C>
Expense computed at U.S.
federal statutory income
tax rate $ 30,864 $ 34,331 $ 24,348
Foreign income taxed at
different rates (11,036) (24,014) (21,431)
Dividends from subsidiaries 187 341 425
State and local income
tax, net of federal income
tax benefit 932 1,715 1,532
Impact of tax rate change -- 2,510 --
Other (647) 5,317 1,526
--------------------------------------------------------------
Reported income tax
expense $ 20,300 $ 20,200 $ 6,400
--------------------------------------------------------------
--------------------------------------------------------------
</TABLE>
Total income tax payments, net of refunds, in 1994, 1993 and 1992 were $3.1
million, $23.7 million and $29.4 million, respectively.
Deferred tax assets (liabilities) were comprised of the following:
<TABLE>
<CAPTION>
(IN THOUSANDS) 1994 1993 1992
--------------------------------------------------------------
<S> <C> <C> <C>
Operating reserves $ 6,677 $ 16,769 $ 17,919
Accelerated depreciation (38,213) (41,703) (42,613)
Inventory valuation methods 16,667 10,083 14,437
Effect of differences between
book values assigned in
prior acquisitions and
historical tax values (116,668) (109,953) (104,245)
Postretirement benefits 33,988 36,336 34,234
Current year acquisitions (23,098) (8,603) --
Tax credit carryforward 30,509 39,075 --
Net operating loss
carryforward 10,998 3,115 16,042
Gain on sale of subsidiary
stock (12,650) (12,650) --
Other (37,462) (30,053) (24,125)
--------------------------------------------------------------
$(129,252) $ (97,584) $ (88,351)
--------------------------------------------------------------
--------------------------------------------------------------
</TABLE>
The tax credit carryforward amount is primarily comprised of alternative minimum
tax credits which can be utilized to reduce regular tax liabilities and may be
carried forward indefinitely. The remaining credits expire from 1998 to 2009.
Total deferred tax assets and deferred tax liabilities were as follows:
<TABLE>
<CAPTION>
(IN THOUSANDS) 1994 1993 1992
-----------------------------------------------------------
<S> <C> <C> <C>
Deferred tax assets $ 210,972 $ 200,249 $ 190,546
Deferred tax liabilities (340,224) (297,833) (278,897)
-----------------------------------------------------------
$(129,252) $ (97,584) $ (88,351)
-----------------------------------------------------------
-----------------------------------------------------------
</TABLE>
The Company remains contingently liable with respect to certain tax credits sold
with recourse by Flexi-Van Corporation ("Flexi-Van"), the Company's former
transportation equipment leasing business, to a third party in 1981. These
credits which have been contested by the Internal Revenue Service continue to be
litigated by Flexi-Van. Flexi-Van, which separated from the Company in 1987 and
was subsequently acquired by David H. Murdock, has indemnified the Company
against obligations that might result from the resolution of this matter.
28
<PAGE>
NOTE 13 -- INDUSTRY AND GEOGRAPHIC AREA SEGMENT INFORMATION
The Company's major operations are in Food Products, Real Estate and Resorts.
The Food Products segment procures, grows, processes and markets fruits,
vegetables and nuts in the following locations: (1) North America; (2) Latin
America -- principally Chile, Colombia, Costa Rica, Ecuador, Honduras and
Panama; (3) Asia -- principally Japan, the Philippines and Thailand; and (4)
Europe -- principally Germany, France and Italy. Real estate activities are
conducted in the United States and consist primarily of holding, developing,
operating and selling residential and commercial real estate. Resorts include
two luxury hotels on the Island of Lana'i in Hawaii.
Revenue, operating income, identifiable assets, capital expenditures and
depreciation and amortization pertaining to the industries and geographic areas
in which the Company operates are presented below. Product transfers between
geographic areas are accounted for based on the estimated fair market value of
the products.
<TABLE>
<CAPTION>
(IN MILLIONS) 1994 1993 1992
----------------------------------------------------------
<S> <C> <C> <C>
Revenue
Food Products
North America $1,933 $1,890 $1,997
Latin America 677 640 924
Asia 842 700 648
Europe 777 577 488
Intercompany elimination (731) (699) (937)
----------------------------------------------------------
Total Food Products 3,498 3,108 3,120
Real Estate 297 284 230
Resorts 47 39 26
----------------------------------------------------------
$3,842 $3,431 $3,376
----------------------------------------------------------
----------------------------------------------------------
Operating Income
Food Products
North America $ (8) $ 39 $ 40
Latin America 131 62 64
Asia 16 77 83
Europe 13 -- 10
----------------------------------------------------------
Total Food Products 152 178 197
Real Estate 73 64 53
Resorts (37) (40) (41)
Corporate and unallocated (14) (17) (24)
Cost reduction program -- (43) (46)
----------------------------------------------------------
$ 174 $ 142 $ 139
----------------------------------------------------------
----------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
(IN MILLIONS) 1994 1993 1992
----------------------------------------------------------
<S> <C> <C> <C>
Identifiable Assets
Food Products
North America $1,065 $1,043 $ 999
Latin America 776 707 695
Asia 332 266 248
Europe 339 211 85
---------------------------------------------------------
Total Food Products 2,512 2,227 2,027
Real Estate 946 788 715
Resorts 336 316 301
Corporate 55 57 52
---------------------------------------------------------
$3,849 $3,388 $3,095
---------------------------------------------------------
---------------------------------------------------------
Capital Expenditures
Food Products $ 212 $ 174 $ 164
Real Estate 9 9 18
Resorts 19 36 10
---------------------------------------------------------
$ 240 $ 219 $ 192
---------------------------------------------------------
---------------------------------------------------------
Depreciation and Amortization
Food Products $ 117 $ 100 $ 88
Real Estate 10 12 5
Resorts 18 16 15
Corporate and unallocated 3 5 2
---------------------------------------------------------
$ 148 $ 133 $ 110
---------------------------------------------------------
---------------------------------------------------------
</TABLE>
NOTES: FOOD PRODUCTS REVENUE INCLUDES INTER-AREA TRANSFERS FROM LATIN AMERICA TO
NORTH AMERICA, ASIA AND EUROPE OF $444 MILLION IN 1994, $418 MILLION IN 1993 AND
$731 MILLION IN 1992; INTER-AREA TRANSFERS FROM ASIA TO NORTH AMERICA AND EUROPE
OF $190 MILLION IN 1994, $227 MILLION IN 1993 AND $206 MILLION IN 1992;
INTER-AREA TRANSFERS FROM NORTH AMERICA TO ASIA AND EUROPE OF $77 MILLION IN
1994, $38 MILLION IN 1993 AND ZERO IN 1992; AND INTER-AREA TRANSFERS FROM EUROPE
TO NORTH AMERICA, ASIA AND LATIN AMERICA OF $20 MILLION IN 1994, $16 MILLION IN
1993 AND ZERO IN 1992.
THE COST REDUCTION PROGRAM CHARGE INCLUDED IN OPERATING INCOME FOR 1993 IS
RELATED TO THE FOOD PRODUCTS SEGMENT. THE COST REDUCTION PROGRAM CHARGE INCLUDED
IN OPERATING INCOME FOR 1992 IS ALLOCABLE TO THE FOLLOWING SEGMENTS: FOOD
PRODUCTS -- $43 MILLION, REAL ESTATE -- $3 MILLION.
29
<PAGE>
NOTE 14 -- QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
The following table presents summarized quarterly results.
<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH
(IN THOUSANDS, EXCEPT PER SHARE DATA) QUARTER QUARTER QUARTER QUARTER YEAR
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1994
Revenue $818,782 $986,947 $1,081,362 $954,475 $3,841,566
Gross margin 146,479 167,594 160,541 127,911 602,525
Net income 29,749 35,653 1,285 1,196 67,883
-------------------------------------------------------------------------------------------------------------
Earnings per common share $ .50 $ .60 $ .02 $ .02 $ 1.14
-------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------
1993
Revenue $766,488 $863,653 $1,005,791 $794,589 $3,430,521
Gross margin 131,791 159,307 149,203 109,718 550,019
Net income (loss) 53,258 39,656 5,103 (20,128) 77,889
-------------------------------------------------------------------------------------------------------------
Earnings (loss) per common share $ .89 $ .66 $ .09 $ (.34) $ 1.30
-------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------
</TABLE>
OPERATING RESULTS FOR THE FOURTH QUARTER OF 1993 INCLUDE A $42.5 MILLION ($26.7
MILLION, NET OF TAX) CHARGE FOR THE COMPANY'S COST REDUCTION PROGRAM.
ALL QUARTERS HAVE TWELVE WEEKS, EXCEPT THE THIRD QUARTERS OF BOTH YEARS WHICH
HAVE SIXTEEN WEEKS.
NOTE 15 -- COMMON STOCK DATA (UNAUDITED)
The following table shows the market price range of the Company's common stock
for each quarter in 1994 and 1993.
<TABLE>
<CAPTION>
HIGH LOW
------------------------------------------------------------
<S> <C> <C>
1994
First Quarter $35 1/2 $26 3/8
Second Quarter 34 1/2 26 1/8
Third Quarter 30 3/4 26 1/4
Fourth Quarter 28 3/8 22 1/2
------------------------------------------------------------
Year $35 1/2 $22 1/2
------------------------------------------------------------
------------------------------------------------------------
1993
First Quarter $35 1/2 $30 1/4
Second Quarter 37 7/8 32 1/4
Third Quarter 37 1/2 30 3/8
Fourth Quarter 31 3/4 25 7/8
------------------------------------------------------------
Year $37 7/8 $25 7/8
------------------------------------------------------------
------------------------------------------------------------
</TABLE>
NOTE 16 -- SUBSEQUENT EVENTS
On January 5, 1995, the Company signed a letter of intent to sell its worldwide
fruit juice business (except for its canned pineapple juice business) to The
Seagram Company Ltd., owner of Tropicana Products, Inc., for approximately $285
million. In connection with the transaction, the Company will license the Dole
brand name to Tropicana. The transaction, which is subject to negotiating a
definitive purchase agreement and appropriate government approvals, is expected
to close during the second quarter of 1995 and result in a substantial gain. Net
proceeds from the proposed sale will be used to repay outstanding bank
indebtedness. Revenues related to the fruit juice business totaled approximately
$300 million in 1994.
On March 7, 1995, the Company signed a letter of intent to sell its
California-based dried fruit business to Sun Diamond Growers of California, a
grower cooperative, for approximately $100 million. The Company will license the
Dole brand name to Sun Diamond for raisins, prunes and dates. The sale, which is
subject to negotiating a definitive purchase agreement and appropriate
government approvals, is expected to close during the second quarter of 1995.
Net proceeds from the proposed sale will be used to repay outstanding bank
indebtedness. Revenues related to the California-based dried fruit business
totaled approximately $140 million in 1994.
30
<PAGE>
DOLE FOOD COMPANY, INC.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholders and Board of Directors of Dole Food Company, Inc.:
We have audited the accompanying consolidated balance sheets of Dole Food
Company, Inc., (a Hawaii corporation) and subsidiaries as of December 31, 1994
and January 1, 1994, and the related consolidated statements of income and cash
flow for the years ended December 31, 1994, January 1, 1994 and January 2, 1993.
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 consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Dole Food
Company, Inc. and subsidiaries as of December 31, 1994 and January 1, 1994, and
the results of their operations and their cash flow for the years ended December
31, 1994, January 1, 1994 and January 2, 1993, in conformity with generally
accepted accounting principles.
/s/ Arthur Andersen LLP
Los Angeles, California
January 30, 1995
(except with respect to the matter
discussed in Note 16, as to which the
date is March 7, 1995)
31
<PAGE>
DOLE FOOD COMPANY, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL
POSITION
1994 COMPARED WITH 1993 --
REVENUE -- Consolidated revenue for 1994 increased $411 million, or 12% over the
prior year, reaching a record $3.8 billion compared to $3.4 billion for 1993.
The Company's food operations contributed approximately $390 million in revenue
growth in 1994. This increase was primarily attributable to new businesses
acquired at the end of 1993 and in 1994 which added approximately $130 million
of revenues, and to expansions of existing product lines.
Revenues for the Company's real estate operations were higher in 1994
primarily related to increased home closings and higher average prices for the
Hawaiian residential developments.
SELLING, MARKETING AND ADMINISTRATIVE EXPENSES -- Selling, marketing and
administrative expenses increased from $365 million in 1993 to $429 million in
1994, largely due to the effects of acquired businesses and other business
expansions, as well as additional promotions and marketing programs for the
fresh vegetable and packaged foods operations.
OPERATING INCOME -- Consolidated operating income totaled $174 million in 1994
and $185 million in 1993 before the 1993 pretax charge of $43 million for the
Company's cost reduction program. Operating income for the Company's food
operations, net of corporate general and administrative expenses, totaled $138
million in 1994 compared to $161 million in 1993 before the cost reduction
charge.
Worldwide banana results increased in 1994, despite the weak Pacific Rim
banana market which resulted from a continued oversupply of product. In early
1995, market conditions in the Pacific Rim continued to be weak.
The European Union ("EU") banana regulations which impose quotas and tariffs
on bananas were in full effect in 1994 and continue to be in effect in 1995. In
addition, beginning in 1995, four Latin American countries (Costa Rica,
Colombia, Nicaragua and Venezuela) will implement an agreement with the EU to
receive a guaranteed share of the import quotas. Regulations governing this
agreement are expected to be published in the first quarter of 1995 and could
result in higher costs of operations for the Company due to additional license
requirements and export fees that may be imposed. As part of the agreement, the
basic EU import quota will be increased 10% and the tariff decreased
approximately 35%. The EU quota will receive a second increase to accommodate an
additional 20 million consumers when Norway, Sweden and Austria join the EU
effective January 1995. Regulations governing the issuance of licenses to
control this new volume are also expected to be published in the first quarter
of 1995. The net impact of these changing regulations on Dole's future results
of operations is not determinable at this time.
The improvement in banana earnings was offset by declines in other food
operations. The fresh vegetable group reported lower results in 1994 primarily
due to poor market conditions for lettuce and celery which existed for the first
three quarters of the year. Due to their susceptibility to market fluctuations,
program sizes for lettuce and celery have been reduced. Results for processed
pineapple were also lower in 1994 compared to 1993, although price pressures
resulting from heavy industry supplies experienced in the prior year and for
most of 1994 began to improve at the end of 1994. Lower operating income in 1994
was also attributable to the dried fruit and nut operations. In addition,
operating income for 1993 included a pretax gain of approximately $9 million
related to the sale of the Company's interest in the California and Hawaiian
Sugar Company.
Dole distributes its products in more than 80 countries throughout the world.
Its international sales are usually transacted in U.S. dollars and major
European and Asian currencies, while many of its costs are incurred in
currencies different from those that are received from the sale of the product.
As the Company has not historically entered into forward foreign exchange
contracts, results of operations may be significantly affected by fluctuations
of currency exchange rates in both the sourcing and selling locations. The
overall net impact of foreign currency fluctuations was immaterial to the
results of operations in 1994 and 1993.
Operating income for the Company's real estate operations totaled $73 million
in 1994 and $64 million in 1993. Residential real estate development operations
reported operating income for 1994 of $61 million compared to $56 million for
1993. The higher earnings were primarily attributable to increased home closings
in the Hawaiian developments, as well as an increase in lot deliveries in
California. While strong earnings were posted in 1994, a soft Hawaiian economy,
combined with an increase in mortgage interest rates and competition, could
impact results for the residential real estate operations in 1995.
The Lana'i resort operations continued to report improved occupancy rates at
both hotels, resulting in an operating loss before depreciation of $19 million
for 1994 as compared to $24 million in 1993. Depreciation expense was $18
million and $16 million in 1994 and 1993, respectively.
INTEREST EXPENSE, NET -- Interest expense, net of interest income and
capitalized interest, increased to $77 million in 1994 from $59 million in 1993
due to higher average debt levels and higher interest rates.
OTHER EXPENSE, NET -- Other expense decreased in 1994,
primarily the result of lower minority interest expense due to a smaller
minority share at the Company's Latin American
beverage operation and lower earnings for the Company's citrus operations.
INCOME TAXES -- The Company's effective income tax rate increased to 23.0% in
1994 from 20.6% in 1993, primarily as a result of an increase in earnings
reported in higher tax rate jurisdictions relative to total earnings before tax.
32
<PAGE>
1993 COMPARED WITH 1992 --
REVENUE -- Consolidated revenue increased $55 million from 1992 to 1993, to
over $3.4 billion.
Revenues for the food operations in 1993 and 1992 were level, accounting for
just over 90% of consolidated net sales. New businesses acquired in early 1993
accounted for approximately $100 million of revenue growth.
Banana revenues generated in the Company's North America and Pacific Rim
markets were down in 1993 due to lower prices. Revenues in the European market
were also lower as volumes into the European Union were limited due to the new
EU banana regulations. Overall, the Company's worldwide banana volumes were
comparable in 1993 and 1992.
Improvements in 1993 revenue were noted for the fresh vegetable business,
attributable to higher lettuce and celery prices. This increase was offset by
declines in citrus revenues due to lower volumes and in fresh and packaged
pineapple sales due to lower prices.
The Company's residential real estate operations reported higher revenue in
1993 as home deliveries for both Hawaii and California increased by 46% in 1993
compared to 1992, partially offset by lower average home prices.
SELLING, MARKETING AND ADMINISTRATIVE EXPENSES -- Selling, marketing and
administrative expenses increased 11% from $328 million in 1992 to $365 million
in 1993. The effect of new acquisitions, plus additional spending for new
products and marketing programs for the fresh vegetable and packaged foods
operations more than offset savings achieved through cost reduction measures.
COST REDUCTION PROGRAM -- As part of its emphasis on cost reduction efforts,
Dole targeted the closure of certain of its businesses which had suffered
continuing losses. These included its Hawaiian sugar operations, its Argentina
deciduous operation, its Philippine shrimp farming operation and a vegetable
packing house. In addition, under Dole's newly implemented management structure,
certain functions within each of four global regions, North America, Latin
America, Asia and Europe, were streamlined and consolidated, resulting in labor
savings. One-time costs associated with the above mentioned operational closures
and other actions totaled $43 million on a pretax basis and were recorded in the
1993 fourth quarter results. The charge included provisions for severance
payments and other employee related expenses, facilities consolidation costs,
and other related expenses, as well as write-downs of non-recoverable assets
resulting from the decision to close the above operations.
OPERATING INCOME -- Consolidated operating income, before cost reduction
charges, was $185 million in both 1993 and 1992. Operating income for the
Company's food operations, net of corporate general and administrative expenses
and before the 1993 and 1992 charges for cost reduction programs, totaled $161
million in 1993 compared to $173 million in 1992. During 1993, the food
operations experienced price pressures on some of its products, resulting in
lower earnings. However, the successful implementation of cost reduction efforts
throughout the Company partially offset a portion of these earnings declines.
Cost reductions achieved during 1993 were significant, totaling approximately
$130 million, including a substantial reduction in the Company's worldwide labor
force. Marginally productive banana lands were abandoned and various
agricultural and harvesting practices were modified to be more cost effective.
The efficiency of the Company's shipping service between Latin America and North
America was significantly improved. The Company's citrus and deciduous
businesses were consolidated in Bakersfield, several citrus packing houses and
an underutilized facility in Bakersfield were closed, and the packaged foods
headquarters were relocated from San Francisco to Westlake Village, California.
Tighter inventory controls and new supplier contracts also contributed
significantly to 1993's cost reductions.
Banana earnings, which accounted for a significant portion of operating
income were lower than in 1992 due to several factors. The new EU banana
regulations which impose quotas on bananas exported from Latin America to the EU
were implemented on July 1, 1993. These regulations disrupted traditional
trading patterns causing banana volumes displaced by the EU restrictions to be
shipped into North American and non-EU European banana markets, resulting in
lower prices in the affected markets. Earnings were also lower in the Pacific
Rim markets due to the recession in Japan and increased industry volumes.
Another condition which affected the 1993 banana results was an outbreak in the
Company's farms in Honduras of sigatoka, a fungus which attacks banana plants.
This resulted in reduced volumes and increased fruit costs from that source in
the second half of 1993. Steps were taken to control the disease and by year-end
1993, growing costs had returned to more normal levels. In addition, operating
income for the fourth quarter of 1992 included an insurance recovery of
approximately $15 million related to the 1991 Costa Rican earthquake.
The packaged foods and fresh pineapple operations also reported lower
earnings in 1993. Price pressures for canned pineapple resulted from heavy
industry supplies and a drop in demand in Europe and Japan due to recessions in
those areas. Prices were also lower in 1993 for Dole's beverage products due to
strong competition from lower-priced orange juice, and for fresh pineapple due
to the recession.
Lower 1993 earnings for bananas and pineapples were partially offset by the
strong performance of the fresh vegetable operations resulting primarily from
higher lettuce and celery prices and improvements in cost structure. Improved
1993 results were also reported for California table grapes as sales prices were
up from 1992 levels.
Operating income for the Company's real estate operations totaled $64 million
in 1993 and $53 million in 1992. Residential real estate operations reported
operating income for 1993 of $56 million compared to $52 million for 1992.
Higher earnings in 1993 were primarily attributable to an increase in the number
of units sold at the Hawaiian developments, partially offset by lower earnings
for the California developments.
33
<PAGE>
The Lana'i resorts operations reported an operating loss before depreciation
of $24 million for 1993 as compared to $26 million in 1992, with improved
occupancy rates for both hotels in 1993. Depreciation expense was approximately
$16 million and $15 million in 1993 and 1992, respectively.
GAIN ON SALE OF SUBSIDIARY COMMON STOCK -- On March 4, 1993, approximately 18%
of the common stock of Castle & Cooke Homes, Inc. was sold at $15 per share
through an initial public offering. Net proceeds from the sale totaled
approximately $74 million and resulted in a gain of approximately $31 million
($18 million, net of tax).
INTEREST EXPENSE, NET -- Interest expense, net of interest income and
capitalized interest, increased to $59 million in 1993 from $57 million in 1992,
primarily attributable to higher average debt levels offset by a lower weighted
average borrowing rate, and a decline in interest income.
INCOME TAXES -- The Company's effective income tax rate increased to 20.6% for
1993 from 8.9% in 1992, primarily as a result of a change in the mix of domestic
and foreign earnings, largely due to the inclusion of the gain on the initial
public offering of Castle & Cooke Homes, Inc. In addition, the higher federal
income tax rates enacted in August 1993 required the Company to provide
additional taxes on its 1993 domestic earnings, as well as on its net deferred
tax liability.
LIQUIDITY AND CAPITAL RESOURCES
In 1994, the Company's operational needs and investment activities were financed
through a combination of internally generated funds and external borrowings.
Cash and short-term investments totaled $47 million at December 31, 1994 and $37
million at January 1, 1994.
Cash flow provided by operations totaled $70 million for 1994 compared to
$131 million in 1993. The decrease was primarily attributable to higher
receivable levels related to increased sales, partially offset by higher
accounts payable and accrued liabilities related to the increased activity
levels. In addition, in 1994 there was increased spending for real estate
developments, primarily in Hawaii for infrastructure at the Royal Kunia
development and for the acquisition of a 22 acre parcel on Oahu for
approximately $12 million. The Company's working capital increased to $641
million at the end of 1994 compared to $482 million at the end of 1993.
Cash flow from financing activities totaled $344 million in 1994 compared to
$158 million in 1993. On May 10, 1994, the Company entered into a $1 billion
revolving credit agreement ("Facility") for a five-year term which replaced the
previous $400 million credit facility. At the Company's option, borrowings under
the Facility bear interest at the agent's prime rate or at a certain percentage
over the London Interbank Offered Rate ("LIBOR"). At December 31, 1994, the
Company had approximately $200 million of borrowing capacity under the Facility.
The Company also borrows under uncommitted lines of credit at rates offered from
time to time by various banks that may or may not be lenders under the $1
billion credit facility. At December 31, 1994, net borrowings under the
uncommitted lines of credit totaled approximately $65 million. As discussed in
the Notes to Consolidated Financial Statements, the Company also had outstanding
at December 31, 1994, $700 million of public unsecured notes which were issued
in 1993. These notes bear interest at 6.75%, 7% and 7.875% and mature in years
2000, 2003 and 2013.
In connection with the 1993 initial public offering, Castle & Cooke Homes,
Inc. entered into a $100 million revolving credit facility with a group of
banks. The credit facility was subsequently amended to increase available
borrowings from $100 million to $135 million. During the fourth quarter of 1994,
amounts outstanding under this facility were refinanced with borrowings from the
Company's $1 billion credit facility, at which time the Castle & Cooke Homes,
Inc. revolving credit agreement was terminated.
Funds expended for the Company's investment activities in 1994 totaled $404
million. During the fourth quarter, the Company acquired the minority
shareholders' interest in Castle & Cooke Homes, Inc. through a cash tender offer
for $15.75 per share, or for an aggregate purchase price of $85 million
including related expenses.
Capital expenditures for 1994 totaled approximately $240 million, of which
$212 million was invested in the Company's food operations for infrastructure,
further development and modernization of new and existing facilities, and new
vessels. The Company also invested $19 million for the Lana'i resort project,
primarily for the completion of the Manele Bay Golf Course and clubhouse.
During 1994, the Company acquired various businesses for an aggregate
purchase price of approximately $94 million. These acquisitions included a 35%
interest in a produce distribution company in the United Kingdom, as well as
various other food and food related operations. The Company also purchased three
commercial real estate properties.
The Company paid four quarterly dividends of 10 cents per share on its common
stock totaling approximately $24 million in 1994.
On January 5, 1995, the Company signed a letter of intent to sell its
worldwide fruit juice business (except for its canned pineapple juice business)
to The Seagram Company Ltd., owner of Tropicana Products, Inc., for
approximately $285 million. In connection with the transaction, the Company will
license the Dole brand name to Tropicana. The transaction, which is subject to
negotiating a definitive purchase agreement and appropriate government
approvals, is expected to close during the second quarter of 1995 and result in
a substantial gain. Net proceeds from the proposed sale will be used to repay
outstanding bank indebtedness. Revenues related to the fruit juice business
totaled approximately $300 million in 1994.
On March 7, 1995, the Company signed a letter of intent to sell its
California-based dried fruit business to Sun Diamond Growers of California, a
grower cooperative, for approximately $100 million. The Company will license the
Dole brand name to Sun Diamond for raisins, prunes and dates. The sale, which is
subject to negotiating a definitive purchase agreement and appropriate
government approvals, is expected to close during the second quarter of 1995.
Net proceeds from the proposed sale will be used to repay outstanding bank
indebtedness. Revenues related to the California-based dried fruit business
totaled approximately $140 million in 1994.
34
<PAGE>
DOLE FOOD COMPANY, INC.
RESULTS OF OPERATIONS AND SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
(IN MILLIONS, EXCEPT PER SHARE DATA) 1994 1993 1992 1991 1990
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenue $3,842 $3,431 $3,376 $3,216 $3,003
Cost of products sold 3,239 2,881 2,863 2,636 2,419
-----------------------------------------------------------------------------------------------------------
Gross margin 603 550 513 580 584
Selling, marketing and administrative expenses 429 365 328 356 355
Cost reduction program -- 43 46 -- --
-----------------------------------------------------------------------------------------------------------
Operating income 174 142 139 224 229
Interest expense -- net (77) (59) (57) (50) (42)
Gain on sale of subsidiary stock or investment -- 31 -- -- 8
Other expense -- net (9) (16) (11) (5) (7)
-----------------------------------------------------------------------------------------------------------
Income before income taxes and accounting change 88 98 71 169 188
Income taxes (20) (20) (6) (35) (68)
-----------------------------------------------------------------------------------------------------------
Income before accounting change 68 78 65 134 120
Cumulative effect of accounting change -- -- (49) -- --
-----------------------------------------------------------------------------------------------------------
Net income $ 68 $ 78 $ 16 $ 134 $ 120
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
Earnings per common share, fully diluted
Income before accounting change $ 1.14 $ 1.30 $ 1.09 $ 2.24 $ 2.03
Cumulative effect of accounting change -- -- (.83) -- --
-----------------------------------------------------------------------------------------------------------
Net income $ 1.14 $ 1.30 $ .26 $ 2.24 $ 2.03
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
Other statistics
Working capital $ 641 $ 482 $ 421 $ 466 $ 309
Total assets 3,849 3,388 3,095 2,878 2,499
Long-term debt 1,555 1,158 988 813 542
Total debt 1,609 1,237 1,102 889 638
Common shareholders' equity 1,081 1,052 1,001 1,009 897
Annual cash dividends per common share .40 .40 .40 .40 .10
Capital additions 240 219 192 325 247
Depreciation and amortization 148 133 110 87 72
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
</TABLE>
35
<PAGE>
COMPANY AND SHAREHOLDER INFORMATION
THE COMPANY
Founded in Hawaii in 1851, Dole Food Company, Inc. is the world's largest
producer and marketer of fresh fruits and vegetables, and markets a growing line
of packaged foods. It is also a major real estate owner and developer in Hawaii,
California and Arizona. The Company does business in more than 80 countries and
employs approximately 46,000 full-time people worldwide.
CORPORATE HEADQUARTERS
31355 Oak Crest Drive
Westlake Village, CA 91361
(818) 879-6600
AUDITORS
Arthur Andersen LLP
633 West Fifth Street
Los Angeles, CA 90071
SECURITIES TRANSFER AGENT
The First National Bank of Boston
P.O. Box 644
Boston, MA 02102
SHAREHOLDER INQUIRIES
Shareholders and members of the investment industry should direct inquiries to:
Office of the Corporate Secretary
Dole Food Company, Inc.
31355 Oak Crest Drive
Westlake Village, CA 91361
(818) 879-6600
FORM 10-K
A copy of Dole Food Company, Inc.'s Form 10-K, a corporate operational and
financial report filed annually with the Securities and Exchange Commission, is
available upon request without charge.
STOCK EXCHANGE
Dole Food Company, Inc.'s common stock (DOL) is traded on the New York and
Pacific Stock Exchanges.
The financial pages of this annual report are printed on recycled paper.
Dole is a registered trademark of Dole Food Company, Inc. Made In Nature,
Dromedary Dried Fruit Company, Looza Distribution N.V., Juice Bowl Products,
Inc., The Lodge at Koele, The Manele Bay Hotel, The Experience at Koele and The
Challenge at Manele are trademarks and service marks of Dole Food Company, Inc.
and/or its affiliates.
-C- 1995 Dole Food Company, Inc. All rights reserved.
<PAGE>
EXHIBIT 22
SUBSIDIARIES OF DOLE FOOD COMPANY, INC.
---------------------------------------
There are no parents of the Registrant.
Registrant's consolidated subsidiaries are shown below together with the
percentage of voting securities owned and the state or jurisdiction of
organization of each subsidiary. The names have been omitted for subsidiaries
which, if considered in the aggregate as a single subsidiary, do not constitute
a significant subsidiary. Subsidiaries of subsidiaries are indented in the
following table:
Percent of
Outstanding
Voting Securities
Owned as of
Subsidiaries of Registrant December 31, 1994
-------------------------- --------------------
Castle & Cooke Fresh Fruit Company 100%
(Nevada)
ABA Holding,Inc. 100%
(New Jersey)
Juice Bowl Products, Inc. 100%
(Florida)
Looza Distribution N.V. 100%
(Belgium)
Beebe Orchard Company 100%
(Delaware)
Dole Citrus 100%
(California)
Dole Fresh Fruit Company 100%
(Nevada)
Dole Europe Company 100%
(Delaware)
1
<PAGE>
Percent of
Outstanding
Voting Securities
Owned as of
Subsidiaries of Registrant December 31, 1994
-------------------------- ------------------
Castle & Cooke Fresh Fruit Company (cont'd)
Dole Fresh Fruit Europe Ltd. & Co. 100%
(Federal Republic of Germany)
Dole Fresh Fruit International, Inc. 100%
(Panama)
Standard Fruit Company 100%
(Delaware)
Cerveceria Hondurena, S.A. 80%
(Honduras)
Standard Fruit Company de Costa Rica, S.A. 100%
(Costa Rica)
Standard Fruit and Steamship Company 100%
(Delaware)
Wells & Wade Fruit Company 100%
(Washington)
Castle & Cooke Worldwide Limited 100%
(Hong Kong)
Dole Fresh Fruit International, Limited 100%
(Liberia)
Solvest, Ltd. 100%
(Bermuda)
2
<PAGE>
Percent of
Outstanding
Voting Securities
Owned as of
Subsidiaries of Registrant December 31, 1994
-------------------------- --------------------
Castle & Cooke Worldwide Limited (cont'd)
Standard Fruit de Honduras, S.A. 100%
(Honduras)
Dole Europe B.V. 100%
(Netherlands)
Soleil Holding France S.A. 100%
(France)
SAMICA, S.A. 100%
(France)
Dole Chile S.A. 100%
(Chile)
Dole Thailand Limited 64%
(Thailand)
Compania Financiera de Costa Rica, S.A. 100%
(Costa Rica)
Dole Bakersfield, Inc. 100%
(California)
Dole Dried Fruit and Nut Company 100%
(California)
Dole Fresh Vegetables, Inc. 100%
(California)
Bud Antle, Inc. 100%
(California)
3
<PAGE>
Percent of
Outstanding
Voting Securities
Owned as of
Subsidiaries of Registrant December 31, 1994
-------------------------- --------------------
Dole Carrot Company 100%
(California)
Royal Packing Co. 100%
(California)
Dole Japan, Ltd. 100%
(Japan)
Dole Land Company, Inc. 100%
(Hawaii)
Dole Mega Holding Corp. 100%
(Hawaii)
Mega Properties Partnership 1%
(a Delaware general partnership)
Dole Mega Trust 99%
(a Delaware business trust)
Mega Properties Partnership 99%
(a Delaware general partnership)
Dole Philippines, Inc. 99%
(Republic of the Philippines)
Earlibest Orange Association, Inc. 100%
(California)
S & J Ranch, Inc. 100%
(California)
Dole Nut Company 100%
(California)
4
<PAGE>
Percent of
Outstanding
Voting Securities
Owned as of
Subsidiaries of Registrant December 31, 1994
-------------------------- --------------------
M K Development, Inc. 100%
(Hawaii)
Lana'i Resort Partners 98%
(a California general partnership)
Castle & Cooke Properties, Inc. 100%
(Hawaii)
Castle & Cooke Homes, Inc. 61%
(Hawaii)
Castle & Cooke Homes Hawaii, Inc. 100%
(Hawaii)
Castle & Cooke California, Inc. 100%
(California)
Castle & Cooke Communities, Inc. 100%
(Hawaii)
Castle & Cooke Bakersfield Holdings, Inc. 100%
(Delaware)
Castle & Cooke Homes, Inc. 39%
(Hawaii)
Castle & Cooke Homes, Inc. 100%
(California)
Waialua Sugar Company, Inc. 100%
(Hawaii)
5
<PAGE>
Exhibit 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of
our reports included (or incorporated by reference) in this Form 10-K into
Dole Food Company, Inc.'s previously filed Registration Statements on Form S-3
Registration Nos. 33-41480 and 33-64984 and Form S-8 Registration Nos.
2-87475, 33-594, 33-28782 and 33-42152.
Arthur Andersen LLP
Los Angeles, California
March 30, 1995
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994<F1>
<PERIOD-START> JAN-02-1994<F1>
<PERIOD-END> DEC-31-1994<F1>
<CASH> 46,566
<SECURITIES> 0
<RECEIVABLES> 394,806<F2>
<ALLOWANCES> 35,898<F3>
<INVENTORY> 558,400
<CURRENT-ASSETS> 1,345,999
<PP&E> 2,523,205
<DEPRECIATION> 596,752
<TOTAL-ASSETS> 3,848,682
<CURRENT-LIABILITIES> 705,126
<BONDS> 1,554,504
<COMMON> 320,121
0
0
<OTHER-SE> 760,520
<TOTAL-LIABILITY-AND-EQUITY> 3,848,682
<SALES> 3,841,566
<TOTAL-REVENUES> 3,841,566
<CGS> 3,239,041
<TOTAL-COSTS> 3,239,041
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 13,585<F3>
<INTEREST-EXPENSE> 88,930
<INCOME-PRETAX> 88,183
<INCOME-TAX> 20,300
<INCOME-CONTINUING> 67,883
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 67,883
<EPS-PRIMARY> 1.14
<EPS-DILUTED> 1.14
<FN>
<F1>THE COMPANY'S FISCAL YEAR ENDS ON THE SATURDAY CLOSEST TO DECEMBER 31. FISCAL
YEAR 1994 CONSISTED OF 52 WEEKS AND ENDED ON DECEMBER 31, 1994. ALL QUARTERS IN
1994 HAVE 12 WEEKS, EXCEPT THE THIRD QUARTER OF 1994 WHICH HAS 16 WEEKS.
<F2>INCLUDES TRADE RECEIVABLES ONLY.
<F3>INCLUDES AMOUNTS RELATED TO TRADE RECEIVABLES AND CURRENT NOTES RECEIVABLE.
</FN>
</TABLE>
