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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, 2001 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
Title of Each Class On Which Registered
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Common Stock, par value $.01 per share New York
Warrants to Subscribe for Common Stock New York
10.56% Senior Notes due March 15, 2009 New York
Securities registered pursuant to Section 12(g) of the Act: None
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. [X]
As of the date of this report, March 19, 2002, 40,000,000 shares of Common
Stock were issued or issuable pursuant to registrant's Plan of Reorganization.
The aggregate market value of Common Stock held by non-affiliates was not
determinable at that time because trading in such shares on the New York Stock
Exchange will not commence until March 20, 2002.
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes[X] No[ ]
Documents Incorporated by Reference
Portions of the Chiquita Brands International, Inc. 2001 Annual Report to
Shareholders are incorporated by reference in Parts I and II. Portions of the
Proxy Statement for the 2002 Annual Meeting of Shareholders are incorporated by
reference in Part III.
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CHIQUITA BRANDS INTERNATIONAL, INC.
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TABLE OF CONTENTS
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Page
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Part I
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Item 1. Business...................................................................... K-1
Item 2. Properties.................................................................... K-10
Item 3. Legal Proceedings............................................................. K-11
Item 4. Submission of Matters to a Vote of Security Holders ......................... K-11
Executive Officers of the Registrant....................................................... K-12
Part II
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Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters ...................................................... K-13
Item 6. Selected Financial Data ..................................................... K-13
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations.................................................. K-13
Item 7A. Quantitative and Qualitative Disclosures About Market Risk .................. K-13
Item 8. Financial Statements and Supplementary Data ................................. K-13
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure ...................................... K-13
Part III
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Item 10. Directors and Executive Officers of the Registrant ........................... K-14
Item 11. Executive Compensation ....................................................... K-14
Item 12. Security Ownership of Certain Beneficial Owners and Management ............... K-14
Item 13. Certain Relationships and Related Transactions ............................... K-14
Part IV
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Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K ............. K-14
Signatures .............................................................................. K-16
This Annual Report on Form 10-K contains certain information that may be
deemed to be "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. These statements reflect management's
current views and estimates of future economic circumstances, industry
conditions and Company performance. They are subject to a number of assumptions,
risks and uncertainties, many of which are beyond the control of Chiquita. The
assumptions, risks and uncertainties include continued maintenance of the
reforms agreed to by the U.S. and EU regarding the EU's banana import regime,
the continuing availability of sufficient borrowing capacity or other financing
to fund operations, capital spending and working capital requirements, the
prices at which Chiquita can sell its products, the availability of and costs at
which it can purchase or grow fresh produce and other raw materials, currency
exchange rate fluctuations, natural disasters and unusual weather conditions,
operating efficiencies, labor relations, actions of governmental bodies, and
other market and competitive conditions. Actual results or developments may
differ materially from the expectations expressed or implied in the forward-
looking statements, and the Company undertakes no obligation to update any such
statements.
PART I
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ITEM 1 - BUSINESS
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GENERAL
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Chiquita Brands International, Inc. ("CBII") and its subsidiaries
(collectively, "Chiquita" or the "Company") operate as a leading international
marketer, producer and distributor of quality fresh fruits and vegetables and
processed foods sold under the "Chiquita" and other brand names. The Company has
capitalized on its "Chiquita" and other premium brand names by building on its
reputation for quality and worldwide leadership position in the sourcing,
distribution and marketing of bananas and other fresh produce. In addition, in
recent years, the Company has expanded its processed fruit and vegetable
operations, primarily through acquisitions of vegetable canning companies.
The Company conducts its business through subsidiaries, which operate in
two segments. The segments are organized primarily on a product line basis, with
each segment offering a variety of different but related products. The Fresh
Produce segment includes the sourcing, transportation, distribution and
marketing of Chiquita bananas and a wide variety of other fresh fruits and
vegetables. The Processed Foods segment consists of the production, distribution
and marketing of the Company's private-label and branded canned vegetables,
processed bananas and edible-oil based consumer products. No individual customer
accounted for more than 10% of the Company's consolidated net sales during any
of the last three years. Financial information by business segment and
geographic area for the last three years is set forth in Note 14 to the
Consolidated Financial Statements included in the Company's 2001 Annual Report
to Shareholders.
On March 19, 2002, CBII completed its previously announced financial
restructuring when its pre-arranged Plan of Reorganization under Chapter 11 of
the U.S. Bankruptcy Code (the "Plan" or "Plan of Reorganization") became
effective. CBII is a parent holding company without business operations of its
own. The events leading to the restructuring and certain provisions of the Plan
are described below.
In 1993, the European Union ("EU") implemented a discriminatory quota and
licensing regime that governed the importation of bananas into the EU and
violated the EU's international trade obligations. This regime significantly
decreased the Company's banana volume sold into Europe and resulted in
significantly diminished operating results for the Company as compared to years
prior to the regime's implementation. Although the Company has made significant
improvements in production and logistics costs, the deterioration of operating
results caused by this regime has been further exacerbated in recent years by
the continued weakness of major European currencies in relation to the U.S.
dollar. Principally due to these factors, the Company experienced financial
losses in seven of the nine years preceding 2001 and had evolved into a highly
leveraged position with consolidated debt of approximately $1.3 billion at
December 31, 2000. Under these circumstances, the Company faced the need to
obtain new financing in order to meet debt maturities and seasonal working
capital requirements during the first quarter of 2001.
During the second half of 2000, the Company encountered a severe tightening
of the bank credit and other capital markets previously accessed by the Company.
In early 2001, the Company's operating subsidiary, Chiquita Brands, Inc.
("CBI"), was able to secure a new three-year $120 million credit facility which,
combined with existing credit facilities of other subsidiaries of the Company,
enabled all of the Company's operating subsidiaries to meet their upcoming debt
maturities and seasonal working capital needs. However, the Company was not able
to obtain financing which would permit CBII to repay its $86 million of 7%
subordinated debentures maturing in March 2001.
K-1
These factors led to CBII's announcement in January 2001 that it would seek
to regain its financial health by proposing a restructuring of the $861 million
principal amount of CBII's outstanding senior notes and subordinated debentures
("Old Notes") through the conversion of a substantial portion of the Old Notes
into new common equity. As part of this initiative, CBII discontinued all
interest and principal payments on the Old Notes.
On November 9, 2001, after extensive negotiations with certain holders of
the Old Notes, the parties agreed on the terms of a consensual restructuring of
CBII. In accordance with the terms of this agreement, CBII filed its Plan of
Reorganization under Chapter 11 of the U.S. Bankruptcy Code on November 28,
2001. CBII's general unsecured creditors (except for holders of the Old Notes)
have been unaffected by the Chapter 11 bankruptcy proceedings and the Plan.
CBII's operating subsidiaries, which have continued to meet their obligations
with their own cash flow and credit facilities (including the CBI credit
facility), have not been involved in the restructuring or the Chapter 11
bankruptcy proceedings. The Plan was confirmed by the bankruptcy court on March
8, 2002 and became effective March 19, 2002, resulting in conversion of the $861
million of Old Notes and $102 million of accrued and unpaid interest thereon
into $250 million of 10.56% senior notes ("New Notes") and 95.5% of the common
stock of CBII as the reorganized entity ("New Common Stock"). Previously
outstanding preferred, preference and common stock is being exchanged for 2% of
the New Common Stock and 7-year warrants ("Warrants") to purchase up to 25% of
the New Common Stock on a fully diluted basis (prior to any dilution by grants
under a new stock option plan). In addition, as part of a management incentive
program, existing management is receiving 2.5% of the New Common Stock.
On March 6, 2002, CBI entered into an amended credit facility which
increases the maximum credit to $130 million and decreases the applicable
interest rate.
For further discussion of the parent company debt restructuring and factors
affecting Chiquita's results of operations, liquidity and financial condition,
see "Management's Discussion and Analysis of Financial Condition and Results of
Operations" and Note 2 to the Consolidated Financial Statements included in the
Company's 2001 Annual Report to Shareholders. Factors that may cause
fluctuations in operating results are also discussed below.
Fresh Produce
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The Company markets an extensive line of fresh fruits and vegetables sold
under the "Chiquita" and other brand names. Chiquita's fresh fruits and
vegetables include bananas, berries, citrus, grapes, lettuce, melons, mushrooms,
onions, potatoes, stone fruit, tomatoes and a wide variety of other fresh
produce. Fresh Produce sales, as a percent of consolidated net sales, amounted
to approximately 80% in each of the last three years. In 2001, approximately 55%
of Fresh Produce sales were in North America and the remainder were in European
and other international markets. The core of Chiquita's Fresh Produce operations
is the marketing, distribution and sourcing of bananas. Sales of bananas
accounted for approximately two-thirds of Fresh Produce net sales in each of the
last three years.
Chiquita believes it derives competitive benefits in the sourcing,
distribution and marketing of fresh produce through its:
. highly recognized brand names and strong brand management;
. reputation for quality and superior customer service;
. social and environmental responsibility;
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. strong market positions in North America and Europe, its principal
markets;
. modern, cost-efficient transportation system;
. number and geographic diversity of major sources of bananas;
. sourcing of certain types of seasonal produce in both the northern and
southern hemispheres to increase availability throughout the year;
. state-of-the-art banana ripening techniques; and
. excellent agricultural practices.
These characteristics enhance Chiquita's ability to provide customers with
premium quality products on a consistent basis.
Distribution and Marketing. Chiquita sells and distributes a variety of
quality fruit and vegetable products through a network of fresh produce
operations in North America, Europe and the Pacific Rim. Some of these
operations involve the sourcing, distribution and marketing of fresh fruits and
vegetables while others involve only distribution and marketing. The Company has
regional sales organizations to service major retail customers and wholesalers.
The retail customers include large chain stores with which Chiquita enters into
product and service contracts, typically for a one-year term. Substantially all
of the Pacific Rim operations are conducted through joint ventures.
The Company's operating subsidiary, Chiquita Brands, Inc., owns the
"Chiquita" trademark and most of the Company's other trademarks, which are
registered in jurisdictions around the world. Of the bananas sold by the
Company, approximately 90% is sold under the "Chiquita" or "Chiquita Jr." brand
name, with the remaining 10% sold under second labels such as "Consul" and
"Amigo." Other fresh fruits are also sold under the "Chiquita" and other brand
names and include apples, apricots, berries, cherries, grapes, melons, peaches,
pears, plums and tomatoes. Fresh vegetables, such as asparagus, beans, broccoli,
carrots, celery, cucumbers, lettuce, mushrooms, onions, peppers and potatoes,
are sold under the "Pacific Gold" and other brand names.
Fresh produce is highly perishable and must be brought to market and sold
generally within 30 to 60 days after harvest. Some items, such as lettuce and
berries, must be sold more quickly, while other items, such as apples and pears,
can be held in cold storage for longer periods of time.
The selling price received for each type of fruit or vegetable depends on
several factors, including:
. the availability and quality of the produce item in the market; and
. the availability and quality of competing types of produce.
For example, although banana production tends to be relatively stable throughout
the year, banana pricing is seasonal. This is because bananas compete against
other fresh fruit, a major portion of which comes to market beginning in the
summer. As a result, banana prices are typically higher during the first half of
the year.
K-3
Adverse weather may restrict the availability of fresh produce and result
in increased prices. However, competing producers and distributors may be
affected differently, depending upon their ability and the cost to obtain
alternate supplies (see Sourcing below).
Bananas are distributed and marketed internationally in a highly
competitive environment. Although smaller companies, including growers'
cooperatives, are a competitive factor, Chiquita's primary competitors are a
limited number of other international banana importers and exporters. To compete
successfully, Chiquita must be able to source bananas of uniformly high quality
and, on a timely basis, transport and distribute them to worldwide markets.
Chiquita sells approximately one-fourth of all bananas imported into North
America and Europe, its principal markets.
As consolidation has increased among domestic and international food
retailers, wholesalers and retailers are seeking fewer suppliers of a wide range
of fresh produce. Chiquita sources a variety of fresh produce from Central and
South America and Mexico for international distribution. It sources certain
types of seasonal produce in both the northern and southern hemispheres in order
to increase availability throughout the year. For other types of fresh produce,
the sourcing and distribution is more regionalized. Typically, in all these
markets, no single competitor has a dominant market share.
Bananas are one of the few fruits that ripen best off the plant. To control
quality, bananas are normally ripened under controlled conditions. Most other
types of fresh produce are already ripe when shipped or ripen naturally. In
recent years, the Company has increased its sales of "yellow" (ripened) bananas
relative to unripened green fruit. The Company currently operates ripening
centers in Europe, North America and the Far East. In Europe, the Company owns
state-of-the-art pressurized rooms to manage the ripening cycle. In North
America, the Company has developed a unique patented ripening technology that
enables bananas to be ripened in shipping containers. The Company believes that
providing this service benefits customers through improved quality, longer shelf
life, lower inventory levels and minimized investment.
The Company has also entered into a number of relationships with major
retailers where the Company acts as a technical advisor to the customer or
actually operates the customer's ripening facilities. Chiquita also provides
retail marketing support services to its customers. These services allow the
Company to develop long-term supply relationships with these customers. Because
of its reputation for consistent product quality, leadership in category
management, the strength of the "Chiquita" brand and its innovative ripening and
marketing techniques, Chiquita generally obtains a premium price for its
bananas.
Logistics. Fresh produce distributed internationally is transported
primarily by ocean-going vessels. Chiquita ships its tropical fruit in
refrigerated vessels owned or chartered by the Company. All of Chiquita's
tropical fruit shipments into the North American and core European markets are
delivered using pallets or containers. This minimizes damage to the product by
eliminating the need to handle individual boxes. Most of the Company's vessels
are equipped with controlled atmosphere technology, which improves product
quality and facilitates the ripening process. In addition, the Company
transports third-party cargo primarily from North America and Europe to Latin
America in order to reduce net transportation costs. Chiquita owns or controls
under long-term lease approximately 70% of its aggregate shipping capacity. The
remaining capacity is operated under contractual arrangements having terms of
approximately one year. (See also ITEM 2 - PROPERTIES and Notes 5 and 6 to the
Consolidated Financial Statements included in the Company's 2001 Annual Report
to Shareholders.)
Transportation costs are significant in Chiquita's Fresh Produce business.
Fuel oil is an important variable component of transportation costs.
K-4
Chiquita operates loading and unloading facilities which it owns or leases
in Central and South America and various ports of destination. To transport
fresh produce overland to and from these ports, as well as fresh produce grown
near its intended market, Chiquita generally uses common carriers who own their
own trucks and, to a lesser extent, rail distribution.
Sourcing. Chiquita has an industry-leading position in terms of number and
geographic diversity of major sources of bananas. During 2001, approximately
one-fifth of all bananas sold by Chiquita were sourced from each of Costa Rica
and Panama. Bananas are also sourced from numerous other countries. Among these,
Colombia, Guatemala and Honduras each produced between 9% and 17% of the bananas
sold by Chiquita during 2001.
The most significant cost in the production of bananas is labor, which
varies depending on the country of origin. Since bananas are packed in cardboard
boxes for shipment, paper cost is also significant.
In 2001, approximately half of the bananas sourced by Chiquita were
produced by subsidiaries and the remainder was purchased under fruit supply
arrangements from other growers. Purchasing fruit allows the Company to avoid
substantial capital spending associated with the investment, maintenance and
financing of additional banana farms. Under some of these fruit supply
arrangements, Chiquita furnishes technical assistance to its suppliers to
support the production and preparation of bananas for shipment. No single
supplier provided more than 10% of the bananas sold by Chiquita in 2001.
During the early 1990's, the Company expended significant capital to
improve production and logistics efficiency and environmental performance. Since
1991, the Company has undertaken a significant effort to achieve the rigorous
performance standards of the Better Banana Project, an independent certification
program aimed at increasing quality and productivity while minimizing
environmental impact and improving conditions for workers. All of Chiquita's
owned banana farms in Latin America have achieved certification under this
program. Certification requires that farms meet certain performance criteria, as
judged by annual third-party audits conducted by members of the Sustainable
Agriculture Network, a coalition of third-party environmental groups directed by
the Rainforest Alliance, an independent non-governmental organization. The
Company is also working with its third-party suppliers to achieve compliance
with these standards. More details of the Better Banana Project, its
requirements, and the Company's performance in meeting high social and
environmental standards are available in Chiquita's 2000 Corporate
Responsibility Report, available on www.chiquita.com.
After the destruction of farms in Honduras and Guatemala caused by
Hurricane Mitch in 1998, the Company made substantial investments to
rehabilitate certain farms and other production facilities which were destroyed
or damaged. This permitted reorganization of these banana facilities to maximize
productivity and minimize operating costs.
In addition to its extensive production of bananas, Chiquita produces,
primarily through joint ventures and other equity investments, apples and grapes
in Chile, grapefruit in Florida, and mushrooms and berries in Australia.
However, the majority of other fresh produce marketed by Chiquita is purchased
from numerous geographically diverse producers and importers. Various
arrangements involve formal long-term purchase contracts or informal market
trading with unrelated suppliers. Under these arrangements, Chiquita may provide
financial assistance. None of these arrangements accounts for more than 5% of
the Company's consolidated net sales.
Fresh produce is vulnerable to adverse weather conditions, including
windstorms, floods, drought and temperature extremes, which are quite common but
difficult to predict. Fresh produce is also
K-5
vulnerable to crop disease and pests. These factors may result in lower sales
volume and increased costs, but may also restrict supplies and lead to an
increase in prices for fresh produce. In addition, production may be affected by
political changes in countries where fruits and vegetables are grown. However,
competitors may be affected differently, depending upon their ability and the
cost to obtain adequate supplies from sources in other geographic areas.
Chiquita's overall risk from these factors is reduced by the geographic
diversity of its producing locations.
Processed Foods
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Chiquita's Processed Foods segment primarily includes:
. private-label and branded canned vegetables sold in North America and
abroad;
. processed bananas and other fruits sold primarily in North America,
Europe and the Far East under the "Chiquita" brand; and
. other consumer products (primarily edible oils) sold in Honduras under
the "Clover" and other brand names.
Processed Foods sales, as a percent of consolidated net sales, amounted to
approximately 20% in each of the last three years. Sales of canned vegetables
accounted for 93% of Processed Foods net sales in 2001, 83% in 2000 and 80% in
1999.
Chiquita's vegetable canning operations are conducted by its subsidiary,
Chiquita Processed Foods, L.L.C. ("CPF"). CPF's operations have continued to
consolidate productive capacity and integrate four canning operations acquired
from September 1997 through April 1999. CPF now operates thirteen processing
facilities in the upper Midwest and Northwest and markets a full line of over 20
types of processed vegetables, including corn, green beans, peas, pumpkin, root
vegetables and other related products, to retail and food service customers
throughout the U.S. and in over 40 other countries. Corn is CPF's leading canned
vegetable product, accounting for approximately 30% of Processed Foods net
sales.
CPF is the largest processor of private-label canned vegetables in the U.S.
and enjoys the largest share of the U.S. private-label canned vegetable
business. Although the canned vegetable market as a whole has remained
relatively static in the last five years, the private-label segment has
exhibited consistent growth. Given the higher margins on these products relative
to brand names, retailers continue to provide these products greater and more
visible shelf space and have begun to focus on creating a broad brand image. As
the retail segment of the industry has consolidated, retail chains have sought
to differentiate their franchises and achieve higher margins, and private-label
products have played a role in both of these initiatives. CPF also sells branded
products under the "Stokely's," "Festal," "Tendersweet" and other labels. CPF
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.
Operating results for CPF are dependent on product availability and market
prices. Market prices tend to decrease as more product is available and increase
when product is scarce. The availability of vegetables for canning is a direct
result of planting acreage, weather and growing conditions and crop yields.
Favorable growing conditions increase both crop size and crop quality.
Prior to each growing season, CPF enters into fixed-price supply agreements
with local independent growers to purchase raw vegetables to be processed in its
canning facilities. These supply
K-6
agreements are typically for one year. To ensure the quality and freshness of
the vegetables used in its products, CPF:
. selects growers located near its canning facilities;
. requires growers to use seed selected by CPF;
. periodically inspects the crops; and
. controls the harvest process and its timing.
Following harvest, raw products are transported to the processing facility,
where they are sorted, sized, cut or trimmed, washed, inspected and then canned
and cooked, providing canned vegetables with a shelf life of three to five
years. In addition to visual inspection, CPF increasingly relies on electronic
inspection machinery that recognizes and rejects any off-color or blemished
product. CPF's high emphasis on quality assurance during the production process
also includes the grading and inspection of raw products, inspection of incoming
cans, sampling and laboratory testing of products during production and
inspection of finished goods on a sample basis prior to shipment.
CPF's most important raw material besides raw vegetables is cans for
product packaging. Can prices are typically agreed upon in the spring and do not
fluctuate over the ensuing pack season.
CPF's products are shipped to customers via truck or rail. CPF ships to its
customers both directly from its plants and from regional storage and
distribution centers. This maximizes customer service and efficiency.
Sales of canned vegetables are not highly seasonal, although some products,
such as canned pumpkin, have higher sales volume in certain months. Since the
availability of vegetables for canning is predominantly seasonal, the production
of canned vegetables is also seasonal. As a result, CPF requires a higher level
of working capital to finance peak inventory requirements during the third and
fourth quarters.
In Europe, the Company sells "Chiquita" branded fruit juices and beverages,
which are manufactured by third parties to Chiquita's specifications. In the
United States, several national fruit juice and beverage producers manufacture
and sell shelf-stable, refrigerated and frozen juice and beverage products using
the "Chiquita" brand name and pay Chiquita a license fee.
Chiquita's processed banana products include banana puree, frozen banana
pieces, sliced bananas and other specialty products. These products are sold to
producers of baby food, fruit beverages, baked goods and fruit-based products,
and to wholesalers of bakery and dairy food products, including selected
licensees such as Beech-Nut. Chiquita produces these products in a processing
facility in Costa Rica and through a joint venture in Ecuador. This joint
venture produces a broad range of processed fruit products, including passion
fruit, pineapples and mangoes. Although Chiquita enjoys the largest share of the
worldwide processed banana market, this industry remains highly competitive due
to the existence of numerous other producers with available processing capacity,
including other banana growers, fruit ingredients companies and large,
international food companies.
The Company's consumer products operations in Honduras are conducted
through a 50%-owned joint venture. The joint venture produces and sells palm-oil
based products, including cooking oils, shortening, margarine, soaps, and other
products such as tomato pastes and flour, under the "Clover" and other brand
names. It competes principally with a number of small local firms and
subsidiaries of multinational corporations.
K-7
RISKS OF INTERNATIONAL OPERATIONS
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The Company conducts operations in many foreign countries. Information
about the Company's operations by geographic area is in Note 14 to the
Consolidated Financial Statements included in the Company's 2001 Annual Report
to Shareholders and is incorporated herein by reference. The Company's foreign
operations are subject to a variety of risks inherent in doing business abroad.
In 1993, the EU implemented a discriminatory quota and licensing regime
governing the importation of bananas into the EU. This regime significantly
decreased the Company's banana volume sold into the EU and resulted in
significantly decreased operating results for the Company as compared to years
prior to the regime's implementation.
During nine years of legal challenges through the World Trade Organization
and its predecessor, the General Agreement on Tariffs and Trade, the EU quota
and licensing regime was determined in several rulings to be in violation of the
EU's international trade obligations. In April 2001, the European Commission
agreed to reform the EU banana import regime. The agreement led to a partial
redistribution of licenses for the import of Latin American bananas under a
tariff rate quota system for historical operators that went into effect on July
1, 2001 and is to continue through the end of 2005. As a result, the Company has
not needed to purchase as many import licenses as were required prior to July 1,
2001 in order to meet its customer demand. The April 2001 agreement also
contemplates movement to a tariff-only system starting in 2006, which will
require future consultations between the EU and the banana supplying interests.
There can be no assurance that the tariff rate quota system will remain
unchanged through 2005 or that a tariff-only system will be implemented after
2005 (or that, if implemented, the tariff levels established will not be adverse
to marketers of Latin American bananas, such as the Company). In addition, the
Company cannot predict the impact on the banana import regime of the enlargement
of the EU by ten member states that is expected to be implemented as early as
2004.
The Company's operations are heavily dependent upon products grown and
purchased in Central and South American countries; at the same time, Chiquita's
operations are a significant factor in the economies of many of these countries.
These activities are subject to risks that are inherent in operating in these
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.
The Company's operations in some Central and South American countries are
dependent upon leases and other agreements with the governments of these
countries. Chiquita leases all the land it uses in Panama from the Republic of
Panama. There are two leases, one for land on the Caribbean coast and the other
for land on the Pacific coast. The leases each have an initial term of 20 years
expiring at the end of 2017, with consecutive 12-year extension periods. Either
lease can be cancelled by Chiquita at any time on three years' prior notice; the
Republic of Panama has the right not to renew either lease at the end of the
initial term or any extension period, provided that it gives four years' prior
notice.
The Company's worldwide operations and products are subject to numerous
governmental regulations and inspections by environmental, food safety and
health authorities, including those relating to the use and disposal of
agrichemicals. These regulations directly affect day-to-day operations. The
Company believes it is substantially in compliance with applicable regulations.
However, actions by
K-8
regulators in the past have required, and in the future may require, operational
modifications or capital improvements at various locations. In addition, if
violations occur, regulators can impose fines, penalties and other sanctions,
and the Company may be subject to private lawsuits alleging personal injury or
property damage.
The Company's operations involve transactions in a variety of currencies.
Accordingly, its operating results may be significantly affected by fluctuations
in currency exchange rates. These fluctuations affect Chiquita's operations
because many of its costs are incurred in currencies different from those
received from the sale of its products. In addition, there is normally a time
lag between the incurrence of production costs and collection of the related
sales proceeds. The Company's policy is to exchange local currencies for dollars
promptly upon receipt, thus reducing exchange risk. The Company also engages
in various hedging activities to further reduce potential losses on cash flows
originating in currencies other than the U.S. dollar. Nevertheless, in recent
years, operating results have been adversely affected by the continued weakness
of major European currencies against the U.S. dollar.
For information with respect to currency exchange, see Notes 1 and 8 to the
Consolidated Financial Statements and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" included in the Company's 2001
Annual Report to Shareholders.
LABOR RELATIONS
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The Company has approximately 29,000 employees. Approximately 21,000 of
these employees work in Central and South America, including 18,000 workers
covered by 35 labor contracts. Contracts covering approximately 10,000 employees
are currently being renegotiated or expire in 2002. The number of employees at
the Company's vegetable canning subsidiary increases from approximately 1,700 to
4,000 during peak production times. Approximately 400 of these employees are
covered by labor contracts. Strikes or other labor-related actions sometimes
occur upon expiration of labor contracts or during the term of the contracts.
These may result in increased costs or decreased crop quality as a result of a
temporary curtailment of agricultural practices. When prolonged strikes or other
labor actions occur, growing crops may be damaged as a result of the disruption
of irrigation, disease and pest control and other agricultural practices.
K-9
ITEM 2 - PROPERTIES
- -------------------
The Company owns approximately 60,000 acres and leases approximately 35,000
acres of improved land, principally in Colombia, Costa Rica, Honduras and
Panama. This land is primarily used for the cultivation of bananas and support
activities, including the maintenance of floodways. The Company also owns
warehouses, power plants, packing stations, irrigation systems and loading and
unloading facilities used in connection with its Fresh Produce operations.
The Company owns or controls under long-term bareboat charters sixteen
refrigerated vessels and has eight additional vessels under time charters,
primarily for transporting tropical fruit sold by Chiquita. From time to time,
excess capacity may be utilized by transporting cargo for third parties or by
chartering or subchartering vessels to other shippers. In addition, the Company
enters into spot charters and contracts of affreightment to supplement its
transportation resources. Chiquita also owns or leases other related equipment,
including refrigerated container units, used to transport fresh produce. The
Company's fleet of shipping vessels was built through a substantial investment
program during the late 1980's and early 1990's. These refrigerated transport
vessels have economic lives in excess of 25 years. The owned ships are pledged
as collateral for related financings.
Properties used by the Company's Processed Foods operations include a total
of thirteen vegetable canning facilities in Idaho, Illinois, Iowa, Michigan,
Minnesota, Oregon, Washington and Wisconsin, fruit processing facilities in
Costa Rica and Ecuador, and edible oil processing facilities in Honduras. All of
these facilities are owned, with the exception of the facilities in Ecuador and
Honduras which are owned and operated by joint ventures. In addition, certain
machinery and equipment owned by the Company's vegetable canning subsidiary,
CPF, is pledged as collateral for CPF's $200 million credit facility.
Other operating units of the Company own, lease and operate properties,
principally in the United States, Europe, and Central and South America. The
Company leases the space for its headquarters in Cincinnati, Ohio.
The Company's subsidiary, Chiquita Brands, Inc. ("CBI"), owns directly or
indirectly substantially all the business operations and assets of the Company.
Substantially all U.S. assets of CBI and its U.S. subsidiaries (other than those
subsidiaries, such as CPF, with their own credit facilities) are pledged to
secure CBI's $130 million credit facility. The credit facility is also secured
by liens on CBI's trademarks, as well as pledges of stock of, or guarantees by,
various CBI subsidiaries worldwide.
The Company believes its property and equipment are generally well
maintained, in good operating condition and adequate for its present needs. The
Company typically insures its assets against standard risks with third-party
insurers, with the exception of banana cultivations. The Company self-insures
its banana cultivations because of the high total cost of insurance from third
parties and the geographic diversity of its banana sources.
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 2001 Annual
Report to Shareholders.
K-10
ITEM 3 - LEGAL PROCEEDINGS
- --------------------------
On November 28, 2001, the Company filed a petition for reorganization under
Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the
Southern District of Ohio, Western Division. On March 8, 2002, the Bankruptcy
Court confirmed the Company's Plan of Reorganization, which became effective on
March 19, 2002. For further information regarding this matter, see "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
included in the Company's 2001 Annual Report to Shareholders.
A number of legal actions are pending against the Company. Based on
information currently available to the Company and on advice of counsel,
management does not believe this litigation will, individually or in the
aggregate, have a material adverse effect on the financial statements of the
Company.
In November 2001, the Illinois Attorney General's Office filed a complaint
before the Illinois Pollution Control Board seeking relief, including monetary
sanctions, for alleged environmental violations at the Princeville, Illinois
canning facility owned by the Company's vegetable canning subsidiary. The
violations related to certain accidental and emergency wastewater discharges and
certain wastewater discharges in excess of permit levels. The Company expects
monetary sanctions to be less than $150,000.
In January 2001, the Company filed a lawsuit in the Court of First Instance
of the European Court of Justice claiming damages from the European Commission
(the EU's executive body) for not carrying out the EU's commitment to reform its
banana import regime to comply with 1997 World Trade Organization rulings. The
lawsuit seeks over $500 million for damages inflicted on the Company from
January 1999 until the regime's reform in July 2001. Briefing by the parties was
completed in January 2002. The Company cannot predict the outcome or timing of
an ultimate decision in this lawsuit.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- ------------------------------------------------------------
The Company solicited votes for the acceptance or rejection of its Plan of
Reorganization under Chapter 11 of the U.S. Bankruptcy Code during the period
from January 18 through February 28, 2002. In accordance with the provisions of
the Code and the Plan, votes were solicited from beneficial holders of the
following classes of claims and equity interests in the Company: Class 4 - the
Company's 9 5/8% Senior Notes due 2004, 9 1/8% Senior Notes due 2004, 10 1/4%
Senior Notes due 2006, 10% Senior Notes due 2009; and 7% Convertible
Subordinated Debentures due 2001; Class 5 - the Company's $2.875 Non-Voting
Cumulative Preferred Stock, Series A, $3.75 Convertible Preferred Stock, Series
B, $2.50 Convertible Preference Stock, Series C; and Class 6 - the Company's Old
Common Stock. Set forth below is a tabulation of the votes:
- -----------------------------------------------------------------------------------------------
Amount Accepting Amount Rejecting Number Accepting Number Rejecting
(% of Amount Voted) (% of Amount Voted) (% of Amount Voted) (% of Amount Voted)
- -----------------------------------------------------------------------------------------------
Class 4 $454,289,500 $1,069,008 1,967 44
(99.77%) (0.23%) (97.81%) (2.19%)
- -----------------------------------------------------------------------------------------------
Class 5 830,733 shares 91,525 shares N/A N/A
(90.08%) (9.92%)
- -----------------------------------------------------------------------------------------------
Class 6 39,667,304 shares 1,257,561 shares N/A N/A
(96.93%) (3.07%)
- -----------------------------------------------------------------------------------------------
K-11
EXECUTIVE OFFICERS OF THE REGISTRANT
- ------------------------------------
Steven G. Warshaw (age 48) - Mr. Warshaw has been Chiquita's President and
Chief Executive Officer since August 2001. He has served as a director since
1997. He served as President and Chief Operating Officer from 1997 to August
2001, Chief Financial Officer from 1994 to 1998 and as Executive Vice President
and Chief Administrative Officer from 1990 to 1997. He has served the Company in
various capacities since 1986.
Carla A. Byron (age 43) - Ms. Byron was appointed Vice President, Treasurer
and Corporate Planning of the Company in February 2002. She was Vice President
of Corporate Planning from 1996 to 2002. She has served the Company in various
capacities since 1988.
Peter A. Horekens (age 53) - Mr. Horekens was appointed President and Chief
Operating Officer of the Company's Chiquita Fresh Group - Europe in 2000. He was
President and Chief Operating Officer of the Company's Chiquita Banana Group -
Europe from 1997 to 2000. Mr. Horekens had previously been employed by Kellogg
Company, a multi-national food company, for several years, most recently as Vice
President and Director of Asian Operations.
Robert F. Kistinger (age 49) - Mr. Kistinger was appointed President and
Chief Operating Officer of the Company's Chiquita Fresh Group in 2000. He was
President and Chief Operating Officer of the Company's Chiquita Banana Group
from 1997 to 2000 and Senior Executive Vice President of the Chiquita Banana
Group from 1994 to 1997. He has served the Company in various capacities since
1980.
Robert W. Olson (age 56) - Mr. Olson has been Senior Vice President,
General Counsel and Secretary of the Company since 1996. He joined the Company
as Vice President and General Counsel in 1995.
James B. Riley (age 50) - Mr. Riley was appointed Senior Vice President and
Chief Financial Officer of the Company in January 2001. From May 1999 until his
appointment, he was Senior Vice President and Chief Financial Officer of Elliott
Company, a global manufacturer of turbomachinery. From autumn 1998 to spring
1999, he was a principal of James Burns Riley & Associates, a consulting firm.
Prior to autumn 1998, Mr. Riley was Executive Vice President and Chief Financial
Officer of Republic Engineered Steels, Inc., a steel manufacturer.
William A. Tsacalis (age 58) - Mr. Tsacalis has been Vice President and
Controller of the Company since 1987. He was Controller from 1984 to 1987 and
has served the Company in various capacities since 1980.
K-12
PART II
-------
ITEM 5 - MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
- ------------------------------------------------------------------------------
As described in "Management's Discussion and Analysis of Financial
Condition and Results of Operations" included in the Company's 2001 Annual
Report to Shareholders, pursuant to the Plan of Reorganization that became
effective on March 19, 2002, the Company's previously outstanding Common Stock
(the "Old Common Stock") has been cancelled and the Company is issuing new
common stock (the "New Common Stock"). The New Common Stock will begin trading
on the New York Stock Exchange on March 20, 2002 under the symbol "CQB." Based
on its records, the Company estimates that as of March 19, 2002, there were
approximately 2,000 persons and entities entitled to become holders of record of
the New Common Stock. Price and dividend information for the Company's Old
Common Stock is in Note 17 to the Consolidated Financial Statements included in
the Company's 2001 Annual Report to Shareholders. Restrictions on the Company's
ability to declare and pay dividends on the New Common Stock are described in
Note 9 to the Consolidated Financial Statements included in the Company's 2001
Annual Report to Shareholders. The information in Notes 9 and 17 described above
is incorporated herein by reference.
ITEM 6 - SELECTED FINANCIAL DATA
- --------------------------------
This information is included in the table entitled "Selected Financial
Data" on page 35 of the Company's 2001 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 Discussion and
Analysis of Financial Condition and Results of Operations" included on pages 4
through 11 of the Company's 2001 Annual Report to Shareholders and is
incorporated herein by reference.
ITEM 7A - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
- --------------------------------------------------------------------
This information is included under the caption "Management's Discussion and
Analysis of Financial Condition and Results of Operations - Market Risk
Management" included on pages 10 through 11 of the Company's 2001 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. on pages 12 through 34 of the Company's 2001 Annual Report to Shareholders,
including "Quarterly Financial Data" in Note 17 to the Consolidated Financial
Statements, are incorporated herein by reference.
ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
- ------------------------------------------------------------------------
FINANCIAL DISCLOSURE
--------------------
None.
K-13
PART III
--------
Except for information relating to the Company's executive officers
included in Part I of this report, the information required by the following
Items is incorporated herein by reference from Chiquita's definitive Proxy
Statement which will be filed with the Securities and Exchange Commission in
connection with the 2002 Annual Meeting of Shareholders.
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 2001 Annual Report to Shareholders and are
incorporated by reference in Part II, Item 8:
Page of
Annual Report
-------------
Report of Independent Auditors 3
Consolidated Statement of Income for 2001, 2000 and 1999 12
Consolidated Balance Sheet at December 31, 2001 and 2000 13
Consolidated Statement of Shareholders' Equity for 2001, 2000 and 1999 14
Consolidated Statement of Cash Flow for 2001, 2000 and 1999 15
Notes to Consolidated Financial Statements 16
2. Financial Statement Schedules. Financial Statement Schedules I -
Condensed Financial Information of Registrant and II - Allowance for
Doubtful Accounts Receivable are included on pages K-18 through K-19
and page K-20, respectively, of this Annual Report on Form 10-K. All
other schedules are not required under the related instructions or are
not applicable.
3. Exhibits. See Index of Exhibits (pages K-21 through K-23) for a
listing of all exhibits to this Annual Report on Form 10-K.
(b) The Company has filed the following reports on Form 8-K since
September 30, 2001:
1. November 9, 2001 (8-K filed November 13, 2001) - to report the
Company's agreement with certain holders of its senior notes and
subordinated debentures regarding the terms of a proposed
restructuring of such debt.
K-14
2. November 28, 2001 (8-K filed November 28, 2001) - to report that
Chiquita Brands International, Inc. filed a petition for
reorganization under Chapter 11 of the U.S. Bankruptcy Code.
3. March 6, 2002 (8-K filed March 12, 2002) - to report amendment of
the credit facility for Chiquita Brands, Inc. with Wells Fargo
Bank, National Association and Foothill Capital Corporation for
aggregate indebtedness of up to $130 million, and to report
confirmation of the Company's Plan of Reorganization on March 8,
2002 by the Bankruptcy Court.
4. March 19, 2002 (8-K filed March 19, 2002) - to report the
effectiveness of the Company's Plan of Reorganization.
K-15
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 19, 2002.
CHIQUITA BRANDS INTERNATIONAL, INC.
By /s/ Steven G. Warshaw
---------------------
Steven G. Warshaw
President 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 19, 2002:
Carl H. Lindner* Director
- ----------------
Carl H. Lindner
Keith E. Lindner* Director
- -----------------
Keith E. Lindner
Rohit Manocha* Director
- --------------
Rohit Manocha
Fred J. Runk* Director
- -------------
Fred J. Runk
Gregory C. Thomas* Director
- ------------------
Gregory C. Thomas
William W. Verity* Director
- ------------------
William W. Verity
Steven G. Warshaw* Director, President and
- ------------------
Steven G. Warshaw Chief Executive Officer
K-16
/s/ James B. Riley Senior Vice President and
- ------------------
James B. Riley 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.
Note: The directors listed above who signed this Report: (a) did so prior to the
time on March 19, 2002 when the Registrant's Plan of Reorganization became
effective, and (b) authorized specified officers of the Registrant to file this
Report promptly after the Plan of Reorganization became effective. Pursuant to
the Plan of Reorganization, the following persons became the Registrant's
directors when the Plan became effective: Morten Arntzen, Jeffrey D. Benjamin,
Robert W. Fisher, Cyrus F. Freidheim, Jr., Roderick M. Hills, Carl H. Lindner
and Steven G. Warshaw.
K-17
CHIQUITA BRANDS INTERNATIONAL, INC. - PARENT COMPANY ONLY
---------------------------------------------------------
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
----------------------------------------------------------
(In thousands)
Condensed Balance Sheet
-----------------------
December 31,
-----------------------
2001 2000
---------- ----------
ASSETS
Current assets
Cash and equivalents $ -- $ 26,715
Trade receivables, net -- 29,276
Other current assets 732 13,099
---------- ----------
Total current assets 732 69,090
Investments in and accounts with subsidiaries 1,424,961 1,399,708
Other assets 15,328 29,827
---------- ----------
Total assets $1,441,021 $1,498,625
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities not subject to compromise
Current liabilities
Long-term debt due within one year $ -- $ 86,930
Accounts payable and accrued liabilities 10,735 38,903
---------- ----------
Total current liabilities 10,735 125,833
Long-term debt -- 772,380
Other liabilities 18,872 17,869
---------- ----------
Total liabilities not subject to compromise 29,607 916,082
Liabilities subject to compromise 962,820 --
---------- ----------
Total liabilities 992,427 916,082
Shareholders' equity 448,594 582,543
---------- ----------
Total liabilities and shareholders' equity $1,441,021 $1,498,625
========== ==========
Condensed Statement of Income
-----------------------------
2001 2000 1999
--------- --------- ---------
Net sales $ -- $ 480,467 $ 507,254
Cost of sales -- (428,556) (469,491)
Selling, general and administrative (31,188) (80,567) (76,212)
Equity in earnings of subsidiaries 33,874 21,070 57,256
--------- --------- ---------
Operating income (loss) 2,686 (7,586) 18,807
Interest income 783 9,799 13,446
Interest expense (81,633) (90,080) (82,335)
Reorganization costs (33,604) -- --
--------- --------- ---------
Loss before income taxes (111,768) (87,867) (50,082)
Income taxes (7,000) (7,000) (8,300)
--------- --------- ---------
Net loss $(118,768) $ (94,867) $ (58,382)
========= ========= =========
K-18
CHIQUITA BRANDS INTERNATIONAL, INC. - PARENT COMPANY ONLY
---------------------------------------------------------
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
----------------------------------------------------------
(In thousands)
Condensed Statement of Cash Flow
--------------------------------
2001 2000 1999
-------- -------- ---------
Cash flow from operations $(26,715) $ 47,320 $ (69,546)
-------- -------- ---------
Investing
Capital contributions to subsidiaries -- (8,574) (41,865)
Other -- (92) (5,261)
-------- -------- ---------
Cash flow from investing -- (8,666) (47,126)
-------- -------- ---------
Financing
Debt transactions
Issuances of long-term debt -- -- 194,363
Repayments of long-term debt -- (22,571) --
Decrease in notes and loans payable -- -- (49,000)
Stock transactions
Issuances of common stock -- -- 58
Dividends -- (12,826) (30,258)
-------- -------- ---------
Cash flow from financing -- (35,397) 115,163
-------- -------- ---------
Increase (decrease) in cash and equivalents (26,715) 3,257 (1,509)
Balance at beginning of period 26,715 23,458 24,967
-------- -------- ---------
Balance at end of period $ -- $ 26,715 $ 23,458
======== ======== =========
Notes to Condensed Financial Information
----------------------------------------
1. For purposes of these condensed financial statements, CBII's investments in
its subsidiaries are accounted for by the equity method.
2. For additional information regarding CBII's debt restructuring, see Note 2
to the Consolidated Financial Statements included in the Company's 2001
Annual Report to Shareholders.
3. In order to meet lender requirements to obtain a credit facility for
Chiquita Brands, Inc., its wholly-owned subsidiary ("CBI"), CBII
transferred to CBI, effective January 1, 2001, the North American banana
sales function, all assets and liabilities associated with this function,
CBII's ownership of Chiquita Processed Foods, L.L.C. and subsidiaries and
certain other assets and functions.
K-19
CHIQUITA BRANDS INTERNATIONAL, INC.
----------------------------------
SCHEDULE II - ALLOWANCE FOR DOUBTFUL ACCOUNTS RECEIVABLE
--------------------------------------------------------
(In thousands)
Year Ended December 31,
-----------------------------
2001 2000 1999
-------- -------- -------
Balance at beginning of period $ 10,685 $ 12,214 $10,603
-------- -------- -------
Additions:
Charged to costs and expenses 3,974 3,052 3,418
-------- -------- -------
Deductions:
Write-offs 2,779 4,961 1,382
Other, net (22) (380) 425
-------- -------- -------
2,757 4,581 1,807
-------- -------- -------
Balance at end of period $ 11,902 $ 10,685 $12,214
======== ======== =======
K-20
CHIQUITA BRANDS INTERNATIONAL, INC.
-----------------------------------
Index of Exhibits
-----------------
Exhibit
Number Description
- ------- -----------
*2 Order Confirming Second Amended Plan of Reorganization of Chiquita
Brands International, Inc. under Chapter 11 of the Bankruptcy Code,
with attached Second Amended Plan of Reorganization of Chiquita Brands
International, Inc. under Chapter 11 of the Bankruptcy Code (Exhibit
2.1 to Current Report on Form 8-K dated March 6, 2002, filed March 12,
2002)
*3(i) Third Restated Certificate of Incorporation (Exhibit 1 to Form 8-A
filed March 12, 2002)
*3(ii) Restated By-Laws (Exhibit 2 to Form 8-A filed March 12, 2002)
*4-a Indenture dated as of March 15, 2002 between the Company and Wells
Fargo Bank Minnesota, National Association, as Trustee, relating to
the issuance of Senior Debt Securities (Exhibit 3 to Form 8-A filed
March 12, 2002), and related terms of the Company's 10.56% Senior
Notes due 2009, set forth in Certificate of Actions taken by the
President of the Company establishing the terms of the 10.56% Senior
Notes (Exhibit 5 to Amendment No. 1 to Form 8-A filed March 19, 2002)
*4-b Warrant Agreement dated as of March 19, 2002 between the Company and
American Security Transfer Company Limited Partnership, as Warrant
Agent (Exhibit 4 to Amendment No. 1 to Form 8-A filed March 19, 2002)
*10-a Operating contracts dated February 18, 1998 between the Republic of
Panama and Chiriqui Land Company consisting of Contract of Operations
(Bocas del Toro), Contract of Operations (Armuelles), Amendment and
Extension of the Lease Land Contract, and related documents as
published in the Republic of Panama Official Gazette No. 23,485
(Exhibit 10-b to Annual Report on Form 10-K for the year ended
December 31, 1997)
*10-b Amended and Restated Credit Agreement dated as of March 6, 2002 among
Chiquita Brands, Inc., as Borrower, the Lenders designated therein,
and Foothill Capital Corporation, as Administrative Agent and Wells
Fargo Bank, National Association as Loan Arranger and Syndication
Agent (Exhibit 10.1 to Current Report on Form 8-K dated March 6, 2002,
filed March 12, 2002)
10-c Credit Agreement dated as of September 22, 1999 among Chiquita
Processed Foods, L.L.C., First Union National Bank, as administrative
agent, and the financial institutions which are lenders, relating to
CPF's $200 million senior secured credit facility, conformed to
incorporate amendments through December 31, 2001
Executive Compensation Plans
----------------------------
10-d 2002 Stock Option and Incentive Plan
K-21
*10-e 1997 Amended and Restated Deferred Compensation Plan, conformed to
include amendments effective through January 1, 2001 (Exhibit 10-f to
Annual Report on Form 10-K for the year ended December 31, 2000)
*10-f 1997 Deferred Compensation Plan for the Board of Directors, conformed
to include amendments effective through January 1, 2001 (Exhibit 10-g
to Annual Report on Form 10-K for the year ended December 31, 2000)
*10-g Chiquita Brands International, Inc. Capital Accumulation Plan,
conformed to include amendments through March 31, 2001 (Exhibit 10 to
Quarterly Report on Form 10-Q for the quarter ended March 31, 2001)
*10-h Guaranty, dated March 12, 2001, by Chiquita Brands, Inc. of
obligations of Chiquita Brands International, Inc., under its Deferred
Compensation and Capital Accumulation Plans (Exhibit 10-i to Annual
Report on Form 10-K for the year ended December 31, 2000)
*10-i Severance Agreement, dated January 16, 2001, between Chiquita Brands
International, Inc. and Steven G. Warshaw, conformed to include
amendments made by Amendment to Severance Agreement dated February 14,
2001 (Exhibit 10-j to Annual Report on Form 10-K for the year ended
December 31, 2000)
*10-j Severance Agreement (Prior to Change in Control), dated February 14,
2001, between Chiquita Brands International, Inc. and Steven G.
Warshaw (Exhibit 10-k to Annual Report on Form 10-K for the year ended
December 31, 2000)
*10-k Severance Agreement, dated January 16, 2001, between Chiquita Brands
International, Inc. and Robert F. Kistinger, conformed to include
amendments made by Amendment to Severance Agreement dated February 14,
2001 (Exhibit 10-l to Annual Report on Form 10-K for the year ended
December 31, 2000)
*10-l Severance Agreement, dated January 16, 2001, between Chiquita Brands
International, Inc. and Robert W. Olson, conformed to include
amendments made by Amendment to Severance Agreement dated February 14,
2001 (Exhibit 10-m to Annual Report on Form 10-K for the year ended
December 31, 2000)
*10-m Severance Agreement, dated January 16, 2001, between Chiquita Brands
International, Inc. and Peter A. Horekens, conformed to include
amendments made by Amendment to Severance Agreement dated February 14,
2001 (Exhibit 10-n to Annual Report on Form 10-K for the year ended
December 31, 2000)
*10-n Severance Agreement, dated January 16, 2001, between Chiquita Brands
International, Inc. and William A. Tsacalis, conformed to include
amendments made by Amendment to Severance Agreement dated February 14,
2001 (Exhibit 10-o to Annual Report on Form 10-K for the year ended
December 31, 2000)
*10-o Severance Agreement, dated January 22, 2001, between Chiquita Brands
International, Inc. and James B. Riley, conformed to include
amendments made by Amendment to Severance Agreement dated February 14,
2001 (Exhibit 10-p to Annual Report on Form 10-K for the year ended
December 31, 2000)
K-22
10-p Severance Agreement, dated January 16, 2001, between Chiquita Brands
International, Inc. and Carla A. Byron, conformed to include
amendments made by Amendment to Severance Agreement dated February 14,
2001.
*10-q Guaranty, dated March 12, 2001, by Chiquita Brands, Inc. of
obligations of Chiquita Brands International, Inc., under severance
agreements with a number of key executives, including those listed in
Exhibits 10-i through 10-p above (Exhibit 10-q to Annual Report on
Form 10-K for the year ended December 31, 2000)
10-r Description of 2002 TCR Retention Program
10-s Stock Unit Agreement dated as of February 13, 2002 by and between Carl
H. Lindner and the Company
10-t Award Share Agreement dated as of February 21, 2002 by and between
Steven G. Warshaw and the Company
10-u Award Share Agreement dated as of February 21, 2002 by and between
Robert F. Kistinger and the Company
10-v Award Share Agreement dated as of February 21, 2002 by and between
Robert W. Olson and the Company
10-w Award Share Agreement dated as of February 21, 2002 by and between
James B. Riley and the Company
10-x Award Share Agreement dated as of February 21, 2002 by and between
Carla A. Byron and the Company
13 Chiquita Brands International, Inc. 2001 Annual Report to Shareholders
(pages 2 through 35)
21 Subsidiaries of Registrant
23 Consent of Independent Auditors
24 Powers of Attorney
- ----------
* Incorporated by reference.
K-23