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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the Fiscal Year Ended Commission File
December 31, 1995 Number 1-1550
CHIQUITA BRANDS INTERNATIONAL, INC.
Incorporated under the I.R.S. Employer I.D.
Laws of New Jersey No. 04-1923360
250 East Fifth Street, Cincinnati, Ohio 45202
(513) 784-8000
Securities registered pursuant to Section 12(b) of the Act:
Name of Each
Exchange On
Title of Each Class Which Registered
------------------------- -------------------------
Capital Stock ($.33 par value) New York, Pacific, Boston
$2.875 Non-Voting Cumulative Preferred
Stock, Series A New York
10-1/2% Subordinated Debentures due
August 1, 2004 New York, Pacific
Securities registered pursuant to Section 12(g) of the Act:
None
Other securities for which reports are submitted pursuant to
Section 15(d) of the Act:
9-1/8% Senior Notes due March 1, 2004
9-5/8% Senior Notes due January 15, 2004
11-1/2% Subordinated Notes due June 1, 2001
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12
months, and (2) has been subject to such filing requirements
for the past 90 days. Yes X No _____
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
amendment to this Form 10-K. [ ]
As of March 1, 1996, there were 55,153,531 shares of Common
Stock outstanding. The aggregate market value of Common Stock
held by non-affiliates at March 1, 1996 was approximately $485
million.
Documents Incorporated by Reference
Portions of the Chiquita Brands International, Inc. 1995
Annual Report to Shareholders are incorporated by reference in
Parts I and II. Portions of the Chiquita Brands
International, Inc. Proxy Statement for the 1996 Annual
Meeting of Shareholders are incorporated by reference in Part
III.
CHIQUITA BRANDS INTERNATIONAL, INC.
TABLE OF CONTENTS
Page
Part I
Item 1. Business 1
Item 2. Properties 6
Item 3. Legal Proceedings 7
Item 4. Submission of Matters to a Vote
of Security Holders 8
Executive Officers of the Registrant 8
Part II
Item 5. Market for Registrant's Common
Equity and Related Stockholder Matters 9
Item 6. Selected Financial Data 9
Item 7. Management's Discussion and
Analysis of Financial Condition and
Results of Operations 9
Item 8. Financial Statements and Supplementary
Data 9
Item 9. Changes in and Disagreements with
Accountants on Accounting and
Financial Disclosure 9
Part III
Item 10. Directors and Executive Officers of
the Registrant 10
Item 11. Executive Compensation 10
Item 12. Security Ownership of Certain
Beneficial Owners and Management 10
Item 13. Certain Relationships and Related
Transactions 10
Part IV
Item 14. Exhibits, Financial Statement Schedules,
and Reports on Form 8-K 10
Signatures 12
PART I
------------------------
ITEM 1 - BUSINESS
----------------------------------
GENERAL
-------------------------
Chiquita Brands International, Inc. ("Chiquita" or the
"Company") is a leading international marketer, producer and
distributor of bananas and other quality fresh and processed
food products sold under the Chiquita and other brand names.
In addition to bananas, these products include other tropical
fruit, such as mangoes, kiwi and citrus, and a wide variety of
other fresh produce. The Company's operations also include
fruit and vegetable juices and beverages; processed bananas
and other processed fruits and vegetables; fresh cut and
ready-to-eat salads; and edible oil-based consumer products.
With the completion of the sale of its meat business in
December 1995, the Company's continuing operations constitute
its only industry segment. See Note 2 to the Consolidated
Financial Statements included in the Company's 1995 Annual
Report to Shareholders, which is incorporated herein by
reference.
In recent years, the Company has capitalized on its
"Chiquita" and other premium brand names by building on its
worldwide leadership position in the marketing, distribution
and sourcing of bananas and by expanding its quality fresh
fruit and vegetable operations. Chiquita has benefited from
its multi-year investment spending program and its
restructuring and cost reduction efforts to significantly
reduce production, distribution and overhead costs. (See
"Distribution and Logistics" and "Sourcing" below and ITEM 2 -
PROPERTIES.) Its restructuring and cost reduction efforts
also included measures to reorganize the Company's European
banana operations to adjust to a quota which effectively
restricts the volume of Latin American bananas imported into
the European Union, as well as to the banana Framework
Agreement which authorizes the imposition of additional
restrictive and discriminatory quotas and export licenses on
non-European banana marketing firms. (See RISKS OF
INTERNATIONAL OPERATIONS below.) In addition to the sale of
its meat business, in 1995 Chiquita completed additional steps
in its ongoing program to improve shareholder value. These
included sales of older ships, the sale of the Costa Rican
operations of its Numar edible oils group, the shut-down of a
portion of the Company's juice operations and the
reconfiguration of banana production assets. See
"Management's Analysis of Operations and Financial Condition"
and Notes 2 and 3 to the Consolidated Financial Statements
included in the Company's 1995 Annual Report to Shareholders.
No individual customer accounted for more than 10% of the
Company's consolidated net sales during any of the last three
years. See "Management's Analysis of Operations and Financial
Condition," which is incorporated by reference in Item 7
herein from the Company's 1995 Annual Report to Shareholders,
for a discussion of factors affecting results of the Company's
operations for 1995, 1994 and 1993. Factors which may cause
fluctuations in the results of operations are also discussed
in the description of the Company's operations below.
Fresh Food Products
-----------------------------
The Company markets an extensive line of fresh fruits and
vegetables sold under the "Chiquita" and other brand names.
The core of Chiquita's fresh foods operations is the
marketing, distribution and sourcing of bananas. Sales of
bananas accounted for approximately 60% of consolidated net
sales in each of the last three years.
-1-
Chiquita believes it derives competitive benefits in the
marketing, distribution and sourcing of fresh foods through
its:
- Recognized brand names and reputation for quality;
- Strong market positions in Europe and North America, its
principal markets;
- Modern, cost-efficient fresh fruit transportation
system; and
- Industry leading position in terms of number and
geographic diversity of its sources of bananas, which
enhances its ability to provide customers with premium
quality products on a consistent basis.
Marketing. Chiquita markets bananas under brand names
including "Chiquita," "Chiquita Jr.," "Consul," "Amigo,"
"Chico" and "Bananos." In 1995, Chiquita sold approximately
one-half of its total banana volumes in Europe and over 40% of
its banana volumes in North America. As a result of a
decision in 1994 to significantly scale back "green" banana
trading operations in Japan, sales of bananas in the Far East
market are no longer a significant portion of the Company's
total banana net sales.
The Company has been able to obtain a premium price for its
bananas due to its reputation for quality and its innovative
marketing techniques, which include providing retail marketing
support services to its customers. Chiquita sells bananas
through its regional sales organizations and commissioned
agents throughout the world directly to wholesalers and retail
chains, which in turn ripen and resell or distribute the
fruit. The Company also sells bananas ripened in its own
facilities or under contractual ripening arrangements.
Bananas are highly perishable and must be brought to market
and sold generally within 60 days after harvest. Therefore,
selling prices which importers receive for bananas depend on
the available supplies of bananas and other fruit in each
market, the relative quality, and wholesaler and retailer
acceptance of bananas offered by competing importers. Excess
supplies may result in increased price competition. Profit
margins on sales may also be significantly affected by
fluctuations in currency exchange rates. (See RISKS OF
INTERNATIONAL OPERATIONS below.)
Adverse weather such as major windstorms or floods in
banana growing areas may restrict worldwide supplies and
result in increased prices for bananas. However, competing
importers may be affected differently, depending upon their
ability to obtain adequate supplies from sources in other
geographic areas.
Banana marketing is highly competitive. In order to
compete successfully, Chiquita must be able to source bananas
of uniformly high quality and distribute them in worldwide
markets on a timely basis. A limited number of competitors
account for most of the banana imports throughout the world.
The Company believes it sells more bananas than any of its
competitors, accounting for approximately one-fourth of all
bananas imported into its principal markets. While smaller
companies, including growers' cooperatives, are a competitive
factor, Chiquita's principal competitors are a limited number
of large international companies.
Although production of bananas tends to be relatively
stable throughout the year, competition in the sale of bananas
comes not only from bananas sold by others, but also from
other fresh fruit which may be seasonal in nature. The
resulting seasonal variations in demand cause banana pricing
to be seasonal, with the first six months of the calendar year
being the stronger period.
Through a network of fresh fruit and vegetable operations
in Europe, North America and the Pacific Rim, Chiquita sells
and distributes a variety of quality fruit and vegetable
products. These products include
-2-
quality fresh fruit such as apples, apricots, cherries,
grapes, peaches, pears, plums, strawberries and tomatoes sold
under the "Chiquita," "Frupac" and other brand names; and a
wide variety of fresh vegetables including asparagus, beans,
broccoli, carrots, celery, lettuce, onions and potatoes sold
under the "Premium" and various other brand names. Certain of
these operations involve both the production and marketing of
fresh fruits and vegetables while others involve only
marketing. These businesses compete against numerous other
regional fresh fruit and vegetable producers and distributors.
No single competitor has a dominant market share in this
industry due to the regionalized nature of these businesses.
Distribution and Logistics. Transportation expenses
comprise approximately one-fourth of the total costs incurred
by Chiquita in its sale of tropical fruit. Chiquita ships its
tropical fruit in vessels owned or chartered by the Company.
All of Chiquita's tropical fruit shipments into the North
American market are delivered using pallets or containers that
minimize damage to the product by eliminating the need to
handle individual boxes. As a result of a multi-year
investment program, now completed, and the elimination of a
substantial amount of chartered ship capacity under Chiquita's
restructuring program, Chiquita now owns or controls under
long-term lease approximately 80% of its aggregate shipping
capacity. The remaining capacity is operated under
contractual arrangements having terms of less than two years.
(See also ITEM 2 - PROPERTIES below and Notes 5 and 6 to the
Consolidated Financial Statements.) Chiquita also operates
loading and unloading facilities which it owns or leases in
Central and South America and various ports of destination.
Sourcing. Chiquita has a greater number and geographic
diversity of sources of bananas than any of its competitors.
During 1995, approximately one-third of all bananas sold by
Chiquita were sourced from Panama. Bananas are sourced from
numerous other countries, including Colombia, Costa Rica,
Ecuador, Guatemala and Honduras which comprised 6% to 23%
(depending on the country) of bananas sold by Chiquita during
1995.
In 1995, approximately two-thirds of the bananas sourced by
Chiquita were produced by subsidiaries and the remainder were
purchased under purchase fruit arrangements from suppliers.
Under certain of the purchase fruit arrangements, which
require less initial capital investment by the Company than
owned production facilities, Chiquita furnishes financial and
technical assistance to its suppliers to support the
production and preparation of bananas for shipment. No single
supplier provided a significant portion of the bananas sold by
Chiquita in 1995.
Bananas are vulnerable to adverse local weather conditions,
which are quite common but difficult to predict, and to crop
disease. These factors, which may result in lower sales
volume and increased costs, may also restrict worldwide
supplies and result in increased prices for bananas. However,
competitors may be affected differently depending upon their
ability to obtain adequate supplies from sources in other
geographic areas. Chiquita's overall risk from these factors,
as well as from political changes in countries where bananas
are grown, is reduced by the low concentration of its banana
production in individual producing locations.
Labor cost, which is a significant portion of the cost of
producing bananas, varies depending on the country of origin.
Since bananas are shipped in cardboard boxes, paper cost is
also significant.
The geographically diverse sources of other fresh fruits
and vegetables primarily involve formal and informal purchase
arrangements with numerous unrelated producers and importers.
None of these arrangements is individually significant to the
Company's operations.
-3-
Processed Food Products
----------------------------------------
Chiquita's processed food products include fruit and
vegetable juices sold primarily in the United States;
processed fruit and vegetables, including processed bananas,
sold worldwide under the "Chiquita," "Friday" and other
brands; fresh cut and ready-to-eat salads sold in the United
States under the "Club Chef" and "Naked Foods" brands; and
other consumer products (primarily edible oils) sold in
Honduras under the "Numar" and other brand names.
Chiquita branded fruit juices include a full line of
tropical blends which are manufactured by others to Chiquita's
specifications and sold in shelf-stable, refrigerated and
frozen varieties. Shelf stable individual servings come in
three blends, "Caribbean Splash," "Tropical Paradise" and
"Calypso Breeze," and are sold through club stores and mass
merchandisers throughout most of the United States. In
December 1995, the Company ceased direct marketing efforts of
its refrigerated and frozen product lines and licensed these
lines to a national fruit juice producer. In addition to the
three tropical blends above, the refrigerated and frozen lines
include "Cranberry Seabreeze," "Raspberry Passion," "Hawaiian
Sunrise" and "Orange Banana." The Company also produces and
markets natural fresh fruit and vegetable juices sold under
the "Chiquita," "Ferraro's Earth Juice" and "Naked Juice"
brands.
Chiquita's processed banana products include banana puree,
sliced bananas and other specialty products which are produced
by the Company and sold to producers of baby food, fruit
beverages, baked goods and fruit-based products, to
wholesalers of bakery and dairy food products, and to selected
licensees including Beech-Nut and General Mills.
Friday Canning Corporation ("Friday") is one of the largest
private-label vegetable processors in the United States.
Friday markets a full line of over twenty-five types of
processed vegetables to retail and food service customers
throughout the U.S. and other countries. Friday competes
directly with a few major producers of both branded and
private-label canned vegetables, as well as indirectly with
numerous marketers of frozen and fresh vegetable products.
The vegetable processing industry is affected by the
availability of produce, which can vary due to local weather
conditions.
In December 1995, the Company sold the Costa Rican
operations of its Numar Group to a group consisting primarily
of Costa Rican and Panamanian investors. The Company's
remaining consumer products operations in Central America are
conducted through a 50%-owned joint venture which owns the
Numar Group's former Honduran edible oils business. The joint
venture sells its products under the "Numar," "Clover" and
other brand names and competes principally against a number of
small local firms and subsidiaries of multinational
corporations.
RISKS OF INTERNATIONAL OPERATIONS
-------------------------------------------------
Information about the Company's operations by geographic
area is included in Note 13 to the Consolidated Financial
Statements included in the Company's 1995 Annual Report to
Shareholders and is incorporated herein by reference.
On July 1, 1993, the European Union ("EU") implemented a
new quota effectively restricting the volume of Latin American
bananas imported into the EU. Implementation of the quota had
the effect of decreasing the Company's volume and market share
in Europe. The quota is administered through a licensing
system and grants preferred status to producers and importers
within the EU and its former colonies, while imposing quotas
and tariffs on bananas imported from other sources, including
Latin America, Chiquita's primary source of fruit. Since
imposition of the EU quota regime, prices within the EU have
increased to a higher
-4-
level than the levels prevailing prior to the quota. Banana
prices in other worldwide markets, however, have been lower
than in years prior to the EU quota, as the displaced EU
volume has entered those markets. In two separate rulings,
General Agreement on Tariffs and Trade ("GATT") panels found
this banana policy to be illegal. In March 1994, four of the
countries which had filed GATT actions against the EU banana
policy (Costa Rica, Colombia, Nicaragua and Venezuela) reached
a settlement with the EU by signing a "Framework Agreement."
The Framework Agreement authorizes the imposition of
additional restrictive and discriminatory quotas and export
licenses on U.S. banana marketing firms, while leaving EU
firms exempt. Costa Rica and Colombia implemented this
agreement in 1995, significantly increasing the Company s cost
to export bananas from these sources. Three additional
European countries (Sweden, Finland and Austria) joined the EU
effective January 1, 1995. These countries, which had
substantially unrestricted banana markets in which the Company
supplied a significant portion of the bananas, are in the
process of transition to the restrictive EU quota and
licensing environment. The timing and exact nature of any
adjustments in the quota and licensing regulations that will
be made for these new EU members have not yet been determined.
Implementation of the quota regime continues to evolve and
there can be no assurance that the EU banana regulation will
not change further.
In September 1994, Chiquita and the Hawaii Banana Industry
Association made a joint filing with the Office of the U.S.
Trade Representative ("USTR") under Section 301 of the U.S.
Trade Act of 1974, charging that the EU quota and licensing
regime and the Framework Agreement are unreasonable,
discriminatory, and a burden and restriction on U.S. commerce.
In response to this petition, the U.S. Government initiated
formal investigations of the EU banana import policy and of
the Colombian and Costa Rican Framework Agreement export
policies. In January 1995, the U.S. Government announced a
preliminary finding against the EU banana import policy and in
September 1995, based on information obtained in the USTR's
investigation under Section 301, the United States, joined by
Guatemala, Honduras and Mexico, commenced a new international
trade challenge against the EU regime using the procedures of
the World Trade Organization ("WTO"). In January 1996, the
USTR announced that it had found the banana Framework
Agreement export policies of Costa Rica and Colombia to be
unfair. The USTR further announced it was not imposing
sanctions at that time, pending further consultations with
those countries to eliminate harm to U.S. commerce. In
February 1996, Ecuador, the world's largest exporter of
bananas, joined the United States, Guatemala, Honduras and
Mexico in challenging the EU regime under the WTO. Both the
WTO and Section 301 authorize retaliatory measures, such as
tariffs or withdrawal of trade concessions, against the
offending countries. However, there can be no assurance as to
the results of the WTO and Section 301 proceedings, the nature
and extent of actions that may be taken by the United States
or other adversely affected countries, or the impact on the EU
quota regime or the Framework Agreement.
Certain of the Company's operations are heavily dependent
upon products grown and purchased in Central and South
America. These activities, a significant factor in the
economies of many of the countries where the Company produces
and purchases bananas and other agricultural and consumer
products, are subject to risks that are inherent in operating
in such countries, including government regulation, currency
restrictions and other restraints, risks of expropriation and
burdensome taxes. There is also a risk that legal or
regulatory requirements will be changed or that administrative
policies will change. Certain of these activities are
substantially dependent upon leases and other agreements with
the governments of these countries.
The Company leases all the agricultural land it uses in
Panama from the Republic of Panama under lease and operating
agreements which automatically renew each year unless canceled
by either party on four years' prior notice. In the event of
termination of the agreements, the government of Panama, which
previously purchased such agricultural lands from the Company,
has the right to purchase other Panamanian assets of the
Company at specified values which approximate carrying value
but may be less than market value.
-5-
Certain facilities in Honduras previously owned by the
Company were transferred in prior years to the government of
Honduras with provision for their subsequent use by the
Company. Such facilities include a railroad which the Company
operates under a lease with the government of Honduras which
expires on December 31, 1998.
The Company's operations worldwide and the products it
sells are subject to numerous governmental regulations and
inspections by environmental, food safety and health
authorities. These regulations directly affect day-to-day
operations. Although the Company believes it is substantially
in compliance with such regulations, actions by regulators
have in the past required, and in the future may require,
operational modifications or capital improvements at various
locations or the payment of fines and penalties, or both.
The Company's operations are conducted in many areas of the
world and involve transactions in a variety of currencies.
Results of its operations may be significantly affected by
fluctuations of currency exchange rates. Such fluctuations
affect the Company's banana operations because many of its
costs are incurred in currencies different from those that are
received from the sale of bananas in non-U.S. markets, and
there is normally a time lag between the incurrence of such
costs and collection of the related sales proceeds. The
Company's policy is to exchange local currencies for dollars
immediately upon receipt, thus reducing exchange risk. The
Company also engages from time to time in various hedging
activities to further minimize potential losses on cash flows
originating in currencies other than the U.S. dollar. See
Notes 1 and 8 to the Consolidated Financial Statements and
"Management's Analysis of Operations and Financial Condition"
included in the Company's 1995 Annual Report to Shareholders
for information with respect to currency exchange.
LABOR RELATIONS
-----------------------------------------
The Company employs a total of approximately 36,000
associates. Approximately 32,000 of these associates are
employed in Central and South America, including 28,000
workers covered by 85 labor contracts. One of these contracts
covering approximately 5,000 workers in La Lima, Honduras
expired April 1, 1995. The affected employees have continued
to work since the expiration of the contract. Negotiations on
a new contract with the workers' union are scheduled to begin
in June 1996. Other labor contracts expire from 1996 to 1999,
with approximately 45 of these contracts covering
approximately 4,000 employees expiring in 1996. Strikes or
other labor-related actions are often encountered upon
expiration of labor contracts and also frequently occur during
the term of the contracts.
ITEM 2 - PROPERTIES
---------------------------
The Company owns approximately 90,000 acres and leases
approximately 40,000 acres of improved land, principally in
Costa Rica, Panama and Honduras. Substantially all of this
land is used for the cultivation of bananas and support
activities, including the maintenance of floodways. The
Company also owns power plants, packing stations, warehouses,
irrigation systems and loading and unloading facilities used
in connection with its operations.
The Company owns or controls under long-term bareboat
charters 16 ocean-going refrigerated vessels and has 4
additional such vessels under time charters, primarily for
transporting tropical fruit sold by the Company. From time to
time, excess capacity may be chartered or subchartered to
others. In addition, the Company enters into spot charters
and contracts of affreightment as necessary to supplement its
transportation resources. The Company also owns or leases
other related equipment, including refrigerated container
units, used to transport fresh food. The owned ships are
pledged as collateral for related financings.
-6-
Properties used by the Company's processed foods operations
include processing facilities in Costa Rica and Honduras, and
vegetable canning facilities in Wisconsin. Other operating
units of the Company own, lease and operate properties,
principally in the United States and Central and South
America. The Company leases the space for its headquarters in
Cincinnati, Ohio.
For further information with respect to the Company's
physical properties, see the descriptions under ITEM 1 -
BUSINESS - GENERAL above, and Notes 5 and 6 to the
Consolidated Financial Statements included in the Company's
1995 Annual Report to Shareholders.
ITEM 3 - LEGAL PROCEEDINGS
---------------------------------------------------
A number of legal actions are pending against the Company,
including those described below. Although some of these
cases, including the DBCP cases described below, are in very
preliminary stages, based on information currently available
to it and advice of counsel, management does not believe such
litigation will, individually or in the aggregate, have a
material adverse effect on the financial statements of the
Company.
Several suits are pending in different jurisdictions
against the manufacturers of an agricultural chemical called
DBCP and against the Company and other banana producing
companies which used DBCP primarily in the 1970's. Most of
the plaintiffs are foreign citizens who claim to have been
employees of banana companies and allege sterility and other
injuries as a result of exposure to DBCP. Plaintiffs' alleged
damage claims have yet to be quantified.
Several of these lawsuits were filed in Texas state court
in 1993. These cases originally represented claims on behalf
of approximately 25,000 individuals, of whom approximately
4,000 purported to have claims against the Company. All but
one of the cases involving Chiquita were removed to the U.S.
District Court for the Southern District of Texas and, in
October 1995, dismissed on the grounds that courts in the
plaintiffs' home countries (limited to Costa Rica, Panama and
the Philippines in the case of suits involving the Company)
were more appropriate forums for pursuing their claims. The
plaintiffs, which include approximately 3,650 alleging claims
against Chiquita, have appealed these dismissals to the U.S.
Court of Appeals for the Fifth Circuit. The other case
involving Chiquita is still pending in Texas state court,
where procedural issues are being addressed. This case,
Narciso Borja, et al. v. Dow Chemical Company, et al.
(District Court of Dallas County), involves approximately
2,000 plaintiffs, including approximately 350 who claim that
the Company has liability for their alleged injuries.
A similar suit was filed in 1995 in Louisiana state court
by approximately 4,000 plaintiffs. The Company does not have
information concerning how many of these plaintiffs allege
that the Company has liability for their injuries, but the
same manufacturer and banana producer defendants have been
sued in this case. This case, Lucas Pastor Canales Martinez,
et al. v. Dow Chemical Company, et al., has been removed to
U.S. District Court for the Eastern District of Louisiana,
where defendants motion to dismiss in favor of more
appropriate forums and plaintiffs' motion to remand to state
court are pending.
As a result of the dismissals of the Texas suits described
above, similar suits against the Company and its subsidiaries
have been filed in Costa Rica, Panama and the Philippines (in
addition to previously filed actions in Costa Rica and
Panama). Cases involving approximately 5,000 plaintiffs who
purport to have claims against the Company are currently
pending in those countries.
The Company believes it has a number of meritorious
defenses in all of the foregoing DBCP cases, including that at
all times during which it used DBCP commercially, the product
was registered for use by the
-7-
United States Environmental Protection Agency. In addition,
the Company ceased using the product on a commercial basis in
1977, promptly after learning that health hazards might exist.
The Wisconsin Department of Justice has brought three
actions against Friday Canning Corporation ("Friday"), a
wholly owned subsidiary of the Company, asserting violations
of certain Wisconsin environmental laws at Friday canning
facilities located in Wisconsin. The actions were filed in
Circuit Courts in Fond du Lac and Columbia Counties in
September 1995 and Greenlake County in January 1996. The
actions seek unspecified civil penalties and other relief for
alleged violations of state-issued wastewater discharge
permits and of laws governing such discharges.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
-------------------------------------------------------------
Not applicable.
EXECUTIVE OFFICERS OF THE REGISTRANT
-------------------------------------------------------------
Carl H. Lindner (age 76) - Mr. Lindner has been Chairman of
the Board of Directors and Chief Executive Officer of the
Company since 1984. He is also Chairman of the Board and
Chief Executive Officer of American Financial Group, Inc.
("AFG"), a holding company formed in April 1995 which, through
its subsidiaries, is engaged principally in specialty and
multi-line property and casualty insurance businesses and in
the sale of tax-deferred annuities. For over 35 years, Mr.
Lindner has been Chairman of the Board and Chief Executive
Officer of American Financial Corporation, which became an AFG
subsidiary in 1995.
Keith E. Lindner (age 36) - Mr. Lindner has been President
and Chief Operating Officer of the Company since 1989 and
President of its Chiquita Brands, Inc. subsidiary since 1986.
He was Senior Executive Vice President of the Company from
1986 until 1989. Mr. Lindner is also a Vice Chairman of AFG.
Steven G. Warshaw (age 42) - Mr. Warshaw has been the
Company's Executive Vice President and Chief Administrative
Officer since 1990 and was named Chief Financial Officer of
the Company in 1994. Mr. Warshaw has served in various
capacities since 1986.
Robert F. Kistinger (age 43) - Mr. Kistinger was named
Senior Executive Vice President of the Company's Chiquita
Banana Group in 1994. He was Executive Vice President,
Operations for the Company's Chiquita Tropical Products
Division from 1989 to 1994 and has served in various
capacities since 1980.
Robert W. Olson (age 50) - Mr. Olson was elected Vice
President, General Counsel and Secretary of the Company in
August 1995. From 1987 to 1995, he served as Senior Vice
President, General Counsel and Secretary of American Premier
Underwriters, Inc. (formerly named The Penn Central
Corporation), an affiliate of AFG. He was Senior Vice
President and Secretary of AFG from April 1995 until he joined
the Company.
Jos P. Stalenhoef (age 54) - Mr. Stalenhoef was named
President, Chiquita Banana-North American Division in 1994.
He was Senior Vice President, North America, Chiquita Tropical
Products Division from 1989 to 1994 and has served in various
capacities since 1988.
William A. Tsacalis (age 52) - Mr. Tsacalis has been Vice
President and Controller of the Company since 1987. He was
Controller from 1984 to 1987 and has served in various
capacities since 1980.
Carl H. Lindner provides broad policy determination and
guidance to operating management, which is headed by Keith E.
Lindner, but devotes substantial portions of his time to the
affairs of AFG and its subsidiaries.
-8-
PART II
-------------------
ITEM 5 - MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
-------------------------------------------------------------
The number of shareholders at March 1, 1996 and the markets
for the Company's capital stock are set forth on page 24 of
the Company's 1995 Annual Report to Shareholders under
"Investor Information." Price ranges of the Company's capital
stock and dividends declared thereon are set forth in Note 15
to the Consolidated Financial Statements included in the 1995
Annual Report to Shareholders. Restrictions on the Company's
ability to declare and pay dividends are described in Note 7
to the Consolidated Financial Statements included in the 1995
Annual Report to Shareholders. All such information is
incorporated herein by reference.
ITEM 6 - SELECTED FINANCIAL DATA
-------------------------------------------------------------
This information is included in the table entitled
"Selected Financial Data" on page 6 of the Company's 1995
Annual Report to Shareholders and is incorporated herein by
reference.
ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
-------------------------------------------------------------
This information is included under the caption
"Management's Analysis of Operations and Financial Condition"
included on pages 7 through 9 of the Company's 1995 Annual
Report to Shareholders and is incorporated herein by
reference.
ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
-------------------------------------------------------------
The Consolidated Financial Statements of Chiquita Brands
International, Inc. and its subsidiaries included on pages 10
through 22 of the Company's 1995 Annual Report to
Shareholders, and "Quarterly Financial Data" which is set
forth in Note 15 to such Consolidated Financial Statements,
are incorporated herein by reference.
ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
-------------------------------------------------------------
None.
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PART III
-----------------------
Except for information relating to the Company's executive
officers set forth in Part I above, the information required
by the following Items will be included in Chiquita's
definitive Proxy Statement which will be filed with the
Securities and Exchange Commission in connection with the 1996
Annual Meeting of Shareholders and is incorporated herein by
reference.
ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
-------------------------------------------------------------
ITEM 11 - EXECUTIVE COMPENSATION
-------------------------------------------------------------
ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
-------------------------------------------------------------
ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
-------------------------------------------------------------
PART IV
-----------------
ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND
REPORTS ON FORM 8-K
-------------------------------------------------------------
(a) 1. Financial Statements. The following consolidated
financial statements of the Company and the Report of
Independent Auditors are included in the Company's
1995 Annual Report to Shareholders and are
incorporated by reference in Part II, Item 8:
Page of
Annual Report
Report of Independent Auditors 5
Consolidated Statement of Income for 1995,
1994 and 1993 10
Consolidated Balance Sheet at December 31,
1995 and 1994 11
Consolidated Statement of Shareholders'
Equity for 1995, 1994 and 1993 12
Consolidated Statement of Cash Flow
for 1995, 1994 and 1993 13
Notes to Consolidated Financial
Statements 14
2. Financial Statement Schedule. Financial Statement
Schedule II - Allowance for Doubtful Accounts
Receivable is included on page 14 of this Annual
Report on Form 10-K. All other schedules are not
required under the related instructions or are
inapplicable and, therefore, have been omitted.
3. Exhibits. See Index of Exhibits (page 15) for
a listing of all exhibits filed with this Annual
Report on Form 10-K.
(b) The following report on Form 8-K was filed during the
quarter ended December 31, 1995:
December 20, 1995 - to report the Company's sale of
its Meat Division to Smithfield Foods, Inc. and to
provide required unaudited pro forma condensed
consolidated financial statements excluding the Meat
Division.
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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 on March 25, 1996.
CHIQUITA BRANDS INTERNATIONAL, INC.
By /s/ Carl H. Lindner
Carl H. Lindner
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
indicated below on March 25, 1996:
/s/ Carl H. Lindner Chairman of the Board and
Carl H. Lindner Chief Executive Officer
/s/ Keith E. Lindner Director; President and Chief
Keith E. Lindner Operating Officer
/s/ Fred J. Runk Director
Fred J. Runk
Jean H. Sisco* Director
Jean H. Sisco
William W. Verity* Director
William W. Verity
Oliver W. Waddell* Director
Oliver W. Waddell
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/s/ Ronald F. Walker Director
Ronald F. Walker
/s/ Steven G. Warshaw Executive Vice President,
Steven G. Warshaw Chief Administrative Officer and
Chief Financial Officer
/s/ William A. Tsacalis Vice President and Controller
William A. Tsacalis (Chief Accounting Officer)
* By /s/ William A. Tsacalis
Attorney-in-Fact**
** By authority of powers of attorney filed with this annual
report on Form 10-K.
-13-
CHIQUITA BRANDS INTERNATIONAL, INC. AND SUBSIDIARY COMPANIES
SCHEDULE II - ALLOWANCE FOR DOUBTFUL ACCOUNTS RECEIVABLE
(In thousands)
Year Ended December 31,
1995 1994 1993
--------- -------- -------
Balance at beginning of period $13,060 $12,393 $11,040
--------- -------- -------
Additions:
Charged to costs and expenses 4,303 6,966 4,797
-------- -------- -------
Deductions:
Write-offs 5,703 6,330 3,220
Other, net 350 (31) 224
-------- -------- -------
6,053 6,299 3,444
-------- -------- -------
Balance at end of period $11,310 $13,060 $12,393
======== ======== =======
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CHIQUITA BRANDS INTERNATIONAL, INC.
Index of Exhibits
Exhibit
Number Description
*3-a Second Restated Certificate of Incorporation, filed as
Exhibit 3(a) to Quarterly Report on Form 10-Q for the
quarter ended June 30, 1994
*3-b By-Laws, filed as Exhibit 3-b to Annual Report on Form
10-K for the year ended December 31, 1992
4 Registrant has no outstanding debt issues exceeding
10% of the assets of Registrant and its consolidated
subsidiaries. The Registrant will furnish to the
Securities and Exchange Commission, upon request,
copies of all agreements and instruments defining the
rights of security holders for debt issues not
exceeding 10% of the assets of Registrant and its
consolidated subsidiaries.
*10-a Lease of Lands and Operating Contract between United
Brands Company, Chiriqui Land Company, Compania
Procesadora de Frutas and the Republic of Panama,
dated January 8, 1976, effective January 1, 1976,
filed as Exhibit 10-a to Annual Report on Form 10-K
for the year ended December 31, 1993
10-b Agreement dated January 11, 1996 effective January 1,
1996 between Tela Railroad Company and the Honduran
National Railroad
*10-c Stock Purchase Agreement dated December 20, 1995
between Smithfield Foods, Inc. ( Smithfield ) and the
Company filed as Exhibit 7.1 to Schedule 13D dated
December 20, 1995 filed by the Company and certain
other persons with respect to Smithfield common stock
Executive Compensation Plans
10-d 1986 Stock Option and Incentive Plan, as amended
*10-e Individual Stock Option Plan and Agreement, filed as
Exhibit 4 to Registration Statement on Form S-8 No.
33-25950 dated December 7, 1988
10-f Amended and Restated Deferred Compensation Plan
11 Computation of Earnings Per Common Share
12 Computation of Ratios of Earnings to Fixed Charges and
Earnings to Combined Fixed Charges and Preferred Stock
Dividends
13 Chiquita Brands International, Inc. 1995 Annual Report
to Shareholders (pages 5 through 22 and page 24)
21 Subsidiaries of Registrant
23 Consent of Independent Auditors
24 Powers of Attorney
27 Financial Data Schedule
99 Annual Report on Form 11-K for the Chiquita Savings
and Investment Plan for 1995 will be filed by
amendment on or before June 28, 1996.
* Incorporated by reference.
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