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Dole1995 annual
Dole1995 annual
Dole1995 annual
Dole1995 annual
Dole1995 annual
Dole1995 annual
Dole1995 annual
Dole1995 annual
Dole1995 annual
Dole1995 annual
Dole1995 annual
Dole1995 annual
Dole1995 annual
Dole1995 annual
Dole1995 annual
Dole1995 annual
Dole1995 annual
Dole1995 annual
Dole1995 annual
Dole1995 annual
Dole1995 annual
Dole1995 annual
Dole1995 annual
Dole1995 annual
Dole1995 annual
Dole1995 annual
Dole1995 annual
Dole1995 annual
Dole1995 annual
Dole1995 annual
Dole1995 annual
Dole1995 annual
Dole1995 annual
Dole1995 annual
Dole1995 annual
Dole1995 annual
Dole1995 annual
Dole1995 annual
Dole1995 annual
Dole1995 annual
Dole1995 annual
Dole1995 annual
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Dole1995 annual

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  • 1. DOLE FOOD COMPANY, INC. ANNUAL REPORT 1995
  • 2. DOLE FOOD COMPANY’S worldwide team of growers, packers, processors, shippers and employees is committed to consistently providing safe, high quality fruit, vegetables and food products while protecting the environment in which its products are grown and processed. Dole’s dedication scientific pest management programs, to quality is a commitment solidly stringent quality control measures, backed by: state-of-the-art production and transportation technologies, contin- uous improvement through research and innovation, dedication to the safety of our workers, communities and the environment.
  • 3. Dole Food Company, Inc. F H INANCIAL IGHLIGHTS (in millions, except per share data) 1995 1994 1993 1992 1991 Revenue $3,804 $3,499 $3,108 $3,120 $2,965 Income from continuing operations before cumulative effect of accounting change $ ,120 $ , 58 $ , 62 $ ,66 $ ,139 Discontinued operations (97) 10 16 (2) (5) Cumulative effect of accounting change – – – (48) – Net income $ ,23 $ , 68 $ , 78 $ , 16 $ ,134 Earnings per common share Income from continuing operations before cumulative effect of accounting change $ 2.00 $ .98 $ 1.04 $ 1.11 $ 2.33 Discontinued operations (1.61) .16 .26 (.04) (.09) Cumulative effect of accounting change – – – (.81) – Net income $ .39 $ 1.14 $ 1.30 $ .26 $ 2.24 Average common shares outstanding 60 60 60 60 60 Total assets $2,442 $3,685 $3,159 $2,926 $2,774 Capitalization Short-term debt $ ,24 $ , 54 $ , 79 $ , 81 $ , 76 Long-term debt 896 1,555 1,111 950 803 Minority interests 26 25 39 35 27 Common shareholders’ equity 508 1,081 1,052 1,001 1,009 Total $1,454 $2,715 $2,281 $2,067 $1,915 Book value per common share $ 8.49 $18.17 $17.70 $16.85 $17.00 Common stock price at year-end $35.00 $23.00 $26.75 $32.13 $36.50 Market price range High $ ,38 $ 351/2 $ 377/8 $ , 40 $ , 48 Low $ ,24 $ 22 /2 $ 25 /8 $ , 26 $ , 28 1 7 Annual cash dividends per common share $ .40 $ .40 $ .40 $ .40 $ .40 Note: In connection with the distribution, the real estate and resorts business has been presented throughout this report as discontinued operations. Prior year amounts have been restated to conform with the 1995 presentation. 1,563 1,081 3,804 1,052 223 1,009 1,001 3,499 3,120 3,108 193 2,965 1,155 175 166 995 138 847 843 508 91 92 93 94 95 91 92 93 94 95 91 92 93 94 95 91 92 93 94 95 COMMON REVENUE O P E R AT I N G I N C O M E NET DEBT SHAREHOLDER’S EQUITY (in millions) (in millions) (in millions) (in millions) 1
  • 4. T O S : O UR HAREHOLDERS Dole celebrated the completion of its 144th year in held corporation, traded on the New York Stock 1995. It was a year of significant accomplishments. Exchange under the symbol “CCS,” owns the real We made substantial improvements in our financial estate and resorts business previously conducted position, expanded key business activities, and by Dole. As a result of the separation, sharehold- divested lower return assets and businesses. We ers are able to separately evaluate the perfor- achieved our long-term goal of separating our real mance of these two distinct businesses. estate and resorts business from our food business. This series of achievements significantly enhanced Operations In 1995 our food business posted a number of shareholder value in 1995. The market value of significant achievements. Revenue grew to $3.8 Dole, including the value of Castle & Cooke, Inc., billion, a strong 14% increase over the prior year, increased by over $1 billion in 1995. excluding revenue from divested businesses. The strong performance of many of our food business- Real Estate Distribution Dole had long been a large owner of real estate. es resulted in operating income for 1995 of $193 These holdings included the world-class resort million, a 40% increase over 1994. Our worldwide hotels on the Island of Lana’i, substantial residen- banana, fresh vegetable, processed and fresh tial developments and homebuilding operations in pineapple operations all posted improved results Hawaii, California and Arizona and commercial over 1994. In all, we are pleased with the results and industrial properties in Hawaii, California, posted by our food businesses which reflect the Arizona and the Southeastern United States. Lana’i’s positive effect of the capital invested and strategic resorts are spectacular and have been the recipient programs implemented over the last few years. of many prestigious awards in recognition of its fine hotels, golf courses and new residential develop- Product Expansion We are enthusiastic about the growth and accep- ments. The award winning residential developments tance of our value added pre-cut salad business. In in Hawaii and master planned communities in 1995 we introduced such innovative product line Bakersfield continue to win high praises. Despite extensions as the fat free complete salads and, these successes, Dole concluded that its shareholders most recently, Lunch for One single serving salads. are best served by the separation of its real estate We continued to expand our distribution network and resorts business from the food business as these throughout Europe and made investments in dis- businesses are distinct in investment, operation tribution companies in Germany, Spain and Italy. and financial characteristics. During 1995, Dole We also expanded our product line offering in successfully completed the separation by distrib- Europe. We entered into a joint venture with a uting to its shareholders the common stock of large South African producer of processed fruits. Castle & Cooke, Inc. The new, separate, publicly 2
  • 5. BOARD OF DIRECTORS (Seated–Left to Right) David A. DeLorenzo, Richard M. Ferry, James F. Gary, Elaine L. Chao, David H. Murdock (Standing–Left to Right) Mike Curb, Frank J. Hata encompassed 3,900 products and services of approx- Further, in January 1996, we signed an agreement imately 200 companies and government agencies. which will result in Dole’ s ownership of substan- We are pleased that Dole’s continuous investments tially all of the outstanding shares of Pascual in quality assurance programs are recognized by Hermanos, a leading Spanish grower/marketer of consumers. Dole will continue its strict quality citrus and fresh vegetables. These actions position control programs to ensure consumers will be Dole as a major participant in the European fresh, satisfied with our products year after year. dried and packaged fruit and vegetable markets. Number One in Customer Satisfaction I n c r e a s e i n S h a r e h o l d e r ’s E q u i t y One of the most comprehensive customer satisfac- Our 1995 results were also strengthened as we tion studies ever done, conducted by the University continued to execute plans to divest of certain of Michigan Business School and the American assets and businesses that do not meet our long- Society of Quality Control, rated Dole number one term growth strategies and performance expectations. in customer satisfaction for the second consecutive While we are committed to providing high quality year as published by Fortune magazine. The survey fresh produce and packaged products to the 3
  • 6. Financial Strength global markets, our goal remains to participate in a manner that will result in higher returns on invest- As a result of the multiple efforts expended dur- ed capital and create a more stable earnings base. ing the year, Dole enters 1996 with a very strong We completed the sale of our juice and juice financial position and a significantly improved beverage business to The Seagram Company Ltd., balance sheet. Dole began 1995 with net debt owner of Tropicana Products, for net proceeds of exceeding $1.5 billion and ended the year with $270 million. Given Seagram’s greater presence in net debt of $847 million, a reduction in borrowing the juice business and economies of scale, we of over $700 million. We continue to enjoy the expect to significantly benefit from its ability to support from our multinational bank group. expand the Dole brand. Dole continues to own its Outlook canned pineapple juice business. We have sold, and have under active negotiation, We are pleased with Dole’s accomplishments in selected agricultural land in North America. It is our 1995 and the associated value created for you, objective to retain the production from most of these our shareholders. We are excited about the future properties to process through our packing/distribution prospects for Dole as we focus on the worldwide systems. In North America, we intend to participate growth opportunities of our food business and the more selectively in the growing of fresh produce and resulting continued creation of shareholder value. will continue to downsize our ownership of agricul- Our sincere gratitude and appreciation to our tural land properties. During 1995, we also divested 43,000 employees throughout the world. Without our North American pistachio nut business. their advice, dedication and energy, our 1995 accomplishments would not have been possible. Management We further applaud their achievement in upholding We are pleased to announce that in March 1996, Dole’s number one ranking with customers for David A. DeLorenzo was promoted to the position service, quality and value for two consecutive years. of president and chief operating officer with all We wish to thank our shareholders and cus- operating division presidents reporting directly to tomers for their continued support and confidence. him. Our management group is comprised of well- Sincerely, seasoned executives who are particularly knowledge- able in their respective areas as well as the food industry in general. Working closely with Mr. DeLorenzo, who has served Dole in various execu- David H. Murdock tive capacities throughout the world for more than Chairman and Chief Executive Officer 25 years, our team will continue to work together in maximizing the growth, profits and value of Dole. March 1996
  • 7. Dole Worldwide Operations q q qq q q q q q q q v qvq v q qv q qqq q q q qq q s q s v vq q q qq qv q q sqv s s vq sq q q sq q 5s q q q q q q s s q q q s q q q q q qq q q s qs q s s q q sq sq sq q s q q ss q q s sq s sq sq s s s q q q q s s q q q s s s q s Sourcing s q q v Ripening/Distribution q s q Markets 5 Corporate q Portugal FOOD OPERATING Martinique Bahrain Honduras Qatar DIVISIONS AND LOCATIONS Mexico Belarussia Jamaica Romania Nicaragua Belgium Martinique Europe and Africa Russia Panama Bosnia Mexico Belgium Saudi Arabia Peru Bulgaria Netherlands-Antilles Cameroon Senegal Venezuela Croatia Panama Canary Islands Slovakia Windward Islands Czech Republic Peru France Spain Denmark Trinidad & Tobago Germany Asia Sweden Estonia Uruguay Greece Australia Switzerland Egypt Venezuela Italy China Syria Finland Ivory Coast Japan Asia Tunisia France Netherlands New Zealand Australia Turkey Germany Somalia Philippines China Ukraine Greece South Africa Thailand Hong Kong United Arab Emirates Hungary Spain Indonesia North America United Kingdom Iceland Tunisia Japan Canada India Turkey Malaysia Latin America and United States Ireland United Kingdom New Zealand Caribbean Arizona Italy Argentina Philippines California Latin America and Jordan Bahamas Singapore Florida Caribbean Kuwait Barbados South Korea Argentina Hawaii Latvia Bermuda Taiwan Chile Washington Lebanon Brazil Thailand Colombia Lithuania Chile Costa Rica FOOD MARKETING North America Luxembourg Colombia Dominican Republic DIVISIONS AND LOCATIONS Canada Malta Costa Rica Ecuador United States Europe and Morocco Dominican Republic Guadeloupe Middle East Netherlands Ecuador Guatemala Albania Norway Guadeloupe Honduras Algeria Oman Guatemala Jamaica Austria Poland
  • 8. T Y I R HE EAR N EVIEW North America Dole The North American food business performed extremely well in 1995. With sales of approximately $1.9 billion, Dole’s North American customers are supplied with a wide array of high quality, wholesome products including bananas, fresh and processed pineapple, fresh vegetables (including value added pre-cut salad), citrus, apples, grapes, stonefruit, and dried fruit and nuts. DUE TO the breadth of its product line, Dole is Vegetable operations achieved record earnings uniquely able to create multiple opportunities in both the value added and commodity segments. for “store-wide” recognition of its fresh and Value added results are expected to approximate processed products. Dole will continue to leverage those of the branded segment in 1996. This these synergies which benefit both Dole and its represents the successful restructuring of Dole’s retail customers. vegetable business to leverage the stability of value added products while capitalizing on favorable market conditions for commodities. The fresh fruit operations continue to improve with deciduous fruit sourced from both North America and Chile realizing very strong returns in 1995. Citrus and apples returns are above initial expecta- tions and should improve further in 1996 as efforts continue to dispose of selected agricultural properties D O L E W O R L D W I D E O P E R AT I O N S G R O U P that do not meet Dole’s return criteria. (Seated–Left to Right) David A. DeLorenzo, PRESIDENT, & The value added vegetable business is now an COO, Andrew J. Biles, EXECUTIVE VICE PRESIDENT & COO EUROPE, David Green, PRESIDENT, DOLE NORTHWEST, William F. established, accepted and expanding segment of Feeney, PRESIDENT, DOLE EUROPE, David H. Murdock, CHAIRMAN & CEO (Standing–Left to Right) Gregory L. Costley, nearly all supermarkets, representing about eight PRESIDENT, DOLE NORTH AMERICA FRUIT, Benjamin Paz, PRESIDENT, DOLE LATIN AMERICA, Lawrence A. Kern, PRESIDENT, percent of produce sales in the United States. As DOLE FRESH VEGETABLES, Paul Cuyegkeng, PRESIDENT, DOLE ASIA (Not Pictured) Peter M. Nolan, PRESIDENT, DOLE PACKAGED consumers continue to seek fresh, healthy, ready- FOODS, Gerald W. LaFleur, EXECUTIVE VICE PRESIDENT, Roberto to-eat foods, pre-cut fresh produce will gain an Zacarias, PRESIDENT, DOLE HONDURAN BEVERAGE. 6
  • 9. increasing share of marketer in many of its fresh product lines. In 1995 WORLDWIDE SALES (in millions) the consumer’s food selective cases, Dole plans to modify its participation Packaged budget. During 1995, as a grower with the goal of achieving higher, $996 Vegetables $667 Dole’s retail sales of more stable returns on invested capital. Dole has value added products sold or is negotiating to sell other agricultural grew significantly, land in North America to further reduce its com- outpacing industry modity exposure and increase returns. growth. Dole expects In other fresh branded categories, Dole contin- strong continued ued its emphasis on the agricultural service, pack- Fresh Fruit $2,141 growth in this category ing and market segments. Dole believes it can with new offerings such as five fat free complete achieve higher, more stable returns per investment salads, two complete salads and three special dollar in these areas as this revenue structure is blends introduced in 1995. In 1996, the single more fee-for-service based and less dependent on serve salad with dressing and bread will be intro- the growing aspects of the agri-business. duced offering an affordable complete meal for individuals at work or home. Continuing its lead in quality and technology, Dole was commended by Food Engineering maga- zine, which voted the recently completed Dole Value Added Products Plant at Soledad, California, “New Plant of the Year.” It recognized that the plant “leapfrogs conventional plant design to set a new standard in the fresh vegetable industry.” Dole is setting the pace in serving retail customer needs. Through a category management program for its value added salads, Dole will be the first major company in the produce industry Recognized as “New Plant of the Year,” Dole’s Soledad to help customers manage store shelves to optimize facility processes vegetables in a sterile environment to assure the highest quality and freshness for consumers. return on investments. Dole will also provide Dole is gradually changing its product mix to value added products in closer proximity to better meet emerging consumer preferences and customers to quickly respond to fluctuations in seasonal requirements. For example, Dole is customer requirements. These major services emphasizing new apple and grape varieties and will assure closer partnering relationships with exploring opportunities in fresh and processed retail customers and are designed to increase fruit. While Dole continues to offer produce year- Dole’s profitability. round, it will concentrate on seasonal periods that Historically, Dole North America has been traditionally offer superior prices. vertically integrated as a grower, packer and 9
  • 10. Latin America/Caribbean Dole Latin America continues to be a premier source of fresh fruit that is distributed worldwide by Dole’s controlled shipping and distribution network. Dole sources fruit from 11 Latin American countries and three Caribbean nations. Dole operates the largest refrigerated container fleet in the industry between Latin America and one of its key markets, North America. DOLE refrigerated containers provide the most efficient owned plantations or from associated growers. system to transport perishable cargo to its quality-and- Dole personnel ensures that Dole’s stringent fruit service oriented customers in North America. Once quality standards are met and maintained. The fresh fruit is loaded into refrigerated containers, the banana industry continues to produce more fruit proper temperature is maintained and produce is not than can be sold through traditional markets on a handled until it is delivered to the customer’s year-round basis. Dole has effectively devel- oped distribution capacity in new, emerging markets to alleviate oversupply conditions in traditional markets. Dole’s success is due in large part to its position as a low cost producer with consistent high quality and service levels. While North America is Dole’s largest market for bananas, Dole also continues to grow at a rapid rate in Europe despite the European Union banana regime restricting the entry of Latin American sourced bananas. Dole’s success in the European market is due to Dole fresh produce is field packed at harvest, minimizing handling and ensuring farm-to-table freshness. its strategy of adapting to distribution center. Dole also operates an efficient fleet market requirements of modern refrigerated vessels, servicing the European rather than solely relying Union, Eastern Europe, the Mediterranean, and on governmental assistance. certain Far Eastern and Middle Eastern markets. Dole has extended its Dole bananas featured collectible Muppet Dole manages the sourcing and distribution of banana sourcing to include stickers for kids in a cross promotion with the market requirements for its major product — significant volumes from the popular 1996 film, bananas. Bananas are sourced from either Dole- both Latin American and MUPPET TREASURE ISLAND. 10
  • 11. European Union protected sources in order to the Middle East and Far East as well as the emerg- provide maximum service to its customers. In ing Latin American markets. Dole also sources addition, Dole started a direct service into Russia fresh pineapples, citrus, melons and mangos for in 1995 with discharges in St. Petersburg and a North America and Europe. new service to the Black Sea, which covers In 1996, Dole expects to continue to benefit Southern Russia and other emerging markets of from its restructuring started several years ago, the area. Dole also commenced direct service from encompassing every level of production and Latin America to New Zealand. distribution. The main thrust of this strategy is to Dole, the largest fruit focus on improved productivity, quality and exporter from Chile, achieved efficiency, and to leverage the Latin American its fifth straight record year in infrastructure for ever improving returns. Dole volume and sales. Chile is maintains strict quality and cost control of Dole’s major winter source for company-owned farms as well as of those of its grapes, apples, pears, stonefruit and kiwis. In associated growers for which technical support recent years, Dole has made several strategic and other services are provided. Dole’s commitment investments in sourcing, packing and cold storage. to serve and assist its associate growers assures These investments have allowed Dole to increase continued loyalty and support and maintains a its volume in apples, stonefruit and kiwis to meet high level of product quality. market requirements in North America, Europe, Dole pineapple, the SMOOTH CAYENNE variety of pineapple and the same variety originally planted by James Dole in the early 1900s, was voted number one in the 1995 AMERICAN CONSUMER SATISFACTION INDEX. 13
  • 12. Europe Dole Dole Europe continued its growth in the European Union, Eastern Europe, Scandinavia, the Mediterranean countries and Russia. Dole’s European sales have grown 20% from 1994 to over $900 million in 1995. The Dole European group, including joint ventures and alliances with Jamaica Producers Fruit Distributors and Compagnie Fruitiere, had sales of over $1.4 billion. IN CONTRAST to Dole’s North American customer alliances with Compagnie Fruitiere, France, and base of supermarket chains and a few large whole- Jamaica Producers Fruit Distributors, UK, while salers, its European customers have been regional building Dole Food España by acquiring several distributors and processors. Three years ago, Dole distribution companies in Spain. began to forward integrate into distribution to Dole began developing an Italian distribution gain logistics efficiencies and work more closely network in 1995 by acquiring companies in Rome with retailers to enhance the profit potential of and near Florence. A state-of-the-art banana both Dole and the retailer. ripening facility was also built near Rome. Dole now sources Italian fruit and vegetables, using specialized packaging for Italian supermarkets Fresh Produce Distribution Centers During 1995, Dole expanded distribution to retailers and also exports products to other Dole companies in France and the United Kingdom by maximizing in France, Spain, Turkey and Egypt. Processed Fruit Dole, through its wholly- owned subsidiary, Saman, is the leading dried fruit and nut company in France. Despite rising raw material prices and a very competitive retail sec- tor, Saman reported strong 1995 earnings. Leveraging off its well established canned pineapple business in Europe, Dole formed a strategic alliance with Langeberg The Dole America is among Dole’s fleet of technologically Food Limited of South Africa. advanced refrigerated vessels which bring fresh produce Under the alliance, Dole will be to market. 14
  • 13. the exclusive marketer and In January 1996, Dole signed an agreement to distributor in Europe of acquire Pascual Hermanos, Spain’s foremost Langeberg’s deciduous Spanish citrus and vegetable producer and canned products under exporter. Pascual Hermanos has long been the both the Dole brand and best known name in Spain for high quality produce private label. This opportu- and has enjoyed high recognition by English, In 19,000 elementary schools nationwide, 5 A nity allows Dole to expand French and German retailers. The Pascual Day Adventures received its brand presence in Hermanos production capability, together with the highest rating by Consumer’s Union for processed fruit in retail Dole’s technology and capability in vegetable corporate sponsored educational material. markets throughout Europe. growing, packing and distribution in Europe, makes Pascual Hermanos a key element for Dole’s strategic growth plans in Europe. Developing Sources Dole is broadening its strong European relationships Dole will continue its growth in both distribu- with supermarkets and its distribution network by tion and new products throughout the European expanding its product line. Compagnie Fruitiere Union, Eastern Europe and Russia and the has established a joint venture in the Ivory Coast Mediterranean countries. to produce and export pineapples and bananas. Dole fresh vegetables are harvested, processed, packaged and rapidly shipped to maintain freshness and the highest quality. 17
  • 14. Asia Dole Dole Asia had 1995 sales of over $700 million. Asia, with a population of 2.5 billion and a growing demand for fresh fruit and vegetables, represents a key growth market for Dole. As agricultural land in Japan, Korea and Taiwan continues to be converted to commercial and industrial use, and other Asian coun- tries enjoy a rising standard of living, profitable growth opportunities for Dole abound. and East Russian markets. In New Zealand, Dole Sales and Distribution DURING 1995, Dole completed construction of its completed the acquisition of the banana importing Nagoya integrated distribution facility which ripens business of Chiquita Brands New Zealand Ltd. bananas and processes other value added products. This facility will be supported by a new state-of-the- Product Sourcing art cold storage facility which was completed by a Dole Asia manages in excess of $200 million in strategic partner for Dole’s exclusive use in Nagoya. production assets in the Philippines and Thailand The fifth Dole center is scheduled for completion in consisting of 45,000 acres of agricultural land as 1996 and will service the Tokyo markets. well as three integrated canneries which supply its Dole continues to expand in other markets. worldwide requirements for processed pineapple. In the Philippines, Dole restructured its sales Weather conditions had a major impact on force to better serve the local market require- product sourcing in 1995. Thailand suffered a ments and has also made inroads into Chinese drought in late 1994, producing a severe pineap- ple shortage in 1995. Changing weather patterns in the Philippines also produced seasonal short- falls in bananas and pineapples. Throughout these periods, Dole’s logistical and distribution systems worked well to manage the production peaks and valleys and to meet customers’ needs. Dole’s geo- graphical diversification also helped alleviate the impact of adverse weather conditions. Consistent with Dole’s corporate emphasis on quality management procedures, Dole Asia recently completed its International Standards Organization (“ISO 9000”) product quality certification in record time for its four divisions in the Philippines. Dole employees pack fresh broccoli at a new integrated distribution facility in Nagoya, Japan. 18
  • 15. Dole Food Products Include: Dole Green Onions Dole Dried Fruit and Nuts Dole Fresh Fruit Dole Blanched Slivered Almonds in Dole Apples Dole Red Sweet Onions Reclosable Bags Dole Apricots Dole Sugar Peas Dole Blanched Whole Almonds in Dole Bananas Dole Idaho Potatoes Reclosable Bags Dole Cherries Dole Radishes Dole Chopped Natural Almonds in Dole Coconuts Reclosable Bags Dole Grapefruit Dole Fresh-Cut Vegetables Dole Sliced Natural Almonds in Dole Grapes Dole Peeled-Mini Carrots Reclosable Bags Dole Honeydew Melon Dole Shredded Carrots Dole Whole Natural Almonds in Dole Kiwi Dole Shredded Lettuce Reclosable Bags Dole Lemons Dole Shredded Green Cabbage Dole Roasted Almonds in Dole Mangos Dole Shredded Red Cabbage Single Serve Bags Dole Nectarines Dole Cole Slaw Dole Seedless Raisins Carton Dole Oranges Dole Classic Salad Dole Golden Seedless Raisins Dole Peaches Dole American Special Blend Salad Dole Seedless Raisins Mini Snacks Dole Pears Dole French Special Blend Salad Dole Seedless Raisins in Dole Persimmons Dole Italian Special Blend Salad Single Serve Bags Dole Pineapple Dole European Special Blend Salad Dole Seedless Raisins Canister Dole Pineapple Fresh-Cut Bags Dole Romaine Special Blend Salad Dole Seedless Raisins in Reclosable Bags Dole Plums Dole Complete Spinach/Bacon Salad Dole Seedless Raisins 6 packs Dole Pomegranates Dole Complete Oriental Salad Dole Pitted Dates Carton Dole Raspberries Dole Complete Sunflower Ranch Salad Dole Chopped Dates Carton Dole Strawberries Dole Complete Romano Salad Dole Whole Dates Cup Dole Tangelos Dole Complete Caesar Salad Dole Pitted Dates Gelatin Mold Cup Dole Tangerines with Fat Free Dressing Dole Pitted Dates Cup Dole Complete Herb Ranch Salad Dole Chopped Dates Cup with Fat Free Dressing Dole Fresh Vegetables Dole Medjool Dates Dole Artichokes Dole Complete Raspberry Romaine Salad Dole Date Nut Roll Dole Asparagus with Fat Free Dressing Dole Baking Dates Dole Bell Peppers Dole Complete Tangy French Salad Dole “Hawaiian Style” Trail Mix in Dole Bok Choy with Fat Free Dressing Single Serve Bags Dole Broccoli Dole Complete Zesty Italian Salad Dole “California Style” Trail Mix in Dole Brussels Sprouts with Fat Free Dressing Single Serve Bags Dole Butter Lettuce Dole Pitted Prunes Carton Dole Carrots Dole Packaged Foods Dole Pitted Prunes Canister Dole Cauliflower Dole Crushed Pineapple in Juice, Syrup Dole Pitted Prunes in Reclosable Bags Dole Celery Dole Pineapple Chunks in Juice, Syrup Dole Large Prunes in Reclosable Bags Dole Green Leaf Lettuce Dole Pineapple Slices in Juice, Syrup Dole Breakfast Prunes in Reclosable Bags Dole Iceberg Lettuce Dole Pineapple Tidbits in Juice, Syrup Dole Red Batavia Lettuce Dole Pineapple Snack Wedges Dole Red Butter Lettuce Dromedary Dole Mandarin Orange Segments Dromedary Pitted Dates Dole Red Leaf Lettuce Dole Tropical Fruit Salad Dromedary Chopped Dates Dole Romaine Lettuce Dole Tropical Fruit Salad Snack Cup Dole Napa
  • 16. F H INANCIAL IGHLIGHTS 3,804 223 244 3,499 3,120 193 3,108 211 2,965 175 166 178 168 138 108 91 92 93 94 95 91 92 93 94 95 91 92 93 94 95 REVENUE O P E R AT I N G I N C O M E O P E R AT I N G C A S H F L O W (in millions) (in millions) (in millions) 16.0% 259 14.0% 212 174 164 7.6% 6.5% 6.4% 90 91 92 93 94 95 91 92 93 94 95 RETURN ON EQUITY C A P I TA L E X P E N D I T U R E S (in millions) (in millions) 20
  • 17. Dole Food Company, Inc. C S I ONSOLIDATED TATEMENTS OF NCOME (in thousands, except per share data) 1995 1994 1993 Revenue $3,803,846 $3,498,553 $3,108,381 Cost of products sold 3,217,869 2,965,675 2,608,951 Gross margin 585,977 532,878 499,430 Selling, marketing and administrative expenses 392,694 394,763 333,374 Cost reduction program – – 42,500 Operating income 193,283 138,115 123,556 Interest expense (81,186) (76,911) (58,457) Interest income 7,501 9,884 10,344 Net gain on assets sold or held for disposal 61,655 – – Other expense – net (5,429) (2,943) (9,710) Income from continuing operations before income taxes 175,824 68,145 65,733 Income taxes (56,000) (9,900) (3,600) Income from continuing operations 119,824 58,245 62,133 Discontinued operations: Income (loss) from discontinued operations, net of income taxes (93,543) 9,638 15,756 Distribution expenses, net of income taxes (2,950) – – Income (loss) from discontinued operations (96,493) 9,638 15,756 Net income $ ,23,331 $ , 67,883 $ , 77,889 Earnings (loss) per common share, primary and fully diluted Continuing operations $ ,2.00 $, .98 $, 1.04 Discontinued operations (1.61) .16 .26 Net income $ , .39 $, 1.14 $, 1.30 See Notes to Consolidated Financial Statements. 21
  • 18. Dole Food Company, Inc. C B S ONSOLIDATED ALANCE HEETS (in thousands, except shares outstanding) 1995 1994 Current assets Cash and short-term investments $ , 72,151 $ , 45,162 Receivables – net 462,303 494,755 Inventories 559,660 552,523 Prepaid expenses 43,087 46,569 Total current assets 1,137,201 1,139,009 Investments 63,319 58,683 Property, plant and equipment – net 1,016,991 1,273,545 Long-term receivables – net 28,409 38,763 Other assets 196,272 108,917 Net assets held for distribution – 1,065,702 $2,442,192 $3,684,619 Current liabilities Notes payable $ , 21,778 $ , 50,366 Current portion of long-term debt 1,779 3,450 Accounts payable 182,152 173,463 Accrued liabilities 451,181 416,987 Total current liabilities 656,890 644,266 Long-term debt 895,998 1,554,504 Other long-term liabilities 354,545 380,527 Minority interests 26,324 24,681 Common shareholders’ equity Common stock (shares outstanding: 1995 – 59,854,739; 1994 – 59,478,108) 320,497 320,121 Additional paid-in capital 170,266 165,541 Retained earnings 58,269 634,717 Cumulative foreign currency translation adjustment (40,597) (39,738) Total common shareholders’ equity 508,435 1,080,641 $2,442,192 $3,684,619 See Notes to Consolidated Financial Statements. 22
  • 19. Dole Food Company, Inc. C S C F ONSOLIDATED TATEMENTS OF ASH LOW (in thousands) 1995 1994 1993 Operating activities Income from continuing operations $ ,(119,824 $ (58,245 $,(62,133 Adjustments to continuing operations Depreciation and amortization 123,671 119,847 105,975 Equity earnings net of distributions (6,533) (2,539) (3,503) Net gain on assets sold or held for disposal (61,655) – – Provision (benefit) for deferred income taxes 30,429 14,073 (31,268) Charge for cost reduction program – – 42,500 Other 41 1,191 (956) Change in operating assets and liabilities, net of effects from acquisitions Receivables – net 53,142 (103,628) (19,624) Inventories (57,588) 1,376 16,635 Prepaid expenses 445 (9,383) (7,823) Other assets (19,245) (29,086) (20,345) Accounts payable and accrued liabilities 57,995 35,252 (33,553) Income taxes payable (27,153) 8,558 (5,636) Other 21,246 20,573 (1,055) Cash flow from operating activities of continuing operations 234,619 114,479 103,480 Cash flow (used in) from operating activities of discontinued operations (11,467) (44,906) 27,182 Cash flow from operating activities 223,152 69,573 130,662 Investing activities Proceeds from sales of businesses and assets 432,746 17,223 17,072 Capital additions (90,276) (211,882) (173,514) Purchases of investments and acquisitions, net of cash acquired (35,251) (66,660) (47,198) Other 998 879 2,320 Cash flow from (used in) investing activities of continuing operations 308,217 (260,440) (201,320) Cash flow used in investing activities of discontinued operations (15,144) (143,635) (106,717) Cash flow from (used in) investing activities 293,073 (404,075) (308,037) Financing activities Short-term borrowings 29,348 54,213 78,244 Repayments of short-term debt (62,944) (69,202) (98,514) Long-term borrowings 12,384 462,885 548,882 Repayments of long-term debt (675,098) (33,952) (398,212) Proceeds from distribution of real estate and resorts business 235,186 – – Cash dividends paid (23,861) (23,791) (23,784) Other 5,101 1,170 1,264 Cash flow (used in) from financing activities of continuing operations (479,884) 391,323 107,880 Cash flow (used in) from financing activities of discontinued operations (9,352) (45,712) 67,970 Cash flow (used in) from financing activities (489,236) 345,611 175,850 Increase (decrease) in cash and short-term investments 26,989 11,109 (1,525) Cash and short-term investments at beginning of year 45,162 34,053 35,578 Cash and short-term investments at end of year $ ,(72,151 $ (45,162 $ (34,053 See Notes to Consolidated Financial Statements. 23
  • 20. Dole Food Company, Inc. N C F S OTES TO ONSOLIDATED INANCIAL TATEMENTS Note 1 – Nature of Operations determining net income and resulted in net losses of $2.4 million, $3.5 million, and $3.6 million, for 1995, Dole Food Company, Inc. and its consolidated sub- 1994 and 1993, respectively. Net foreign exchange gains sidiaries (“the Company”) is engaged in the worldwide or losses resulting from the translation of assets and sourcing, processing, distributing and marketing of liabilities of foreign subsidiaries whose local currency is high quality, branded food products including fruits, the functional currency are accumulated in a separate vegetables and nuts in the following locations: North component of common shareholders’ equity. America; Latin America, principally Chile, Colombia, Costa Rica, Ecuador, Guatemala, Honduras and Panama; Income Taxes – Deferred income taxes are recognized for Asia, principally Japan, the Philippines and Thailand; the tax consequences of temporary differences by apply- and Europe, principally France, Germany, Italy, Spain ing enacted statutory tax rates to the differences between and the United Kingdom. The Company also conducts financial statement carrying amounts and the tax bases other operations in Honduras, primarily beverage of assets and liabilities. The income taxes which would bottling. be due upon the distribution of foreign subsidiary earn- ings have not been provided where the undistributed The Company’s principal products are produced both earnings are considered permanently invested. directly on Company-owned or leased land and through associated producer and independent grower arrange- Earnings Per Common Share – Primary earnings per com- ments. The Company’s products are primarily packed and mon share are based on the weighted average number of processed by the Company and sold to retail and institu- shares outstanding during the period after consideration tional customers and other food product companies. of the dilutive effect of stock options and restricted stock awards. The primary weighted average number of com- Note 2 – Summary of Accounting Policies mon shares outstanding was 59.8 million for 1995 and 59.7 million for 1994 and 1993. Principles of Consolidation – The consolidated financial statements include the accounts of all significant Cash and Short-Term Investments – Cash and short-term majority-owned subsidiaries. All significant intercompany investments include cash on hand and time deposits. transactions have been eliminated. Such short-term investments generally have original maturities of three months or less. Annual Closing Date – The Company’s fiscal year ends on the Saturday closest to December 31. Fiscal years 1995, Fair Value of Financial Instruments – For short-term 1994 and 1993 ended on December 30, 1995, December financial instruments the historical carrying amount is 31, 1994 and January 1, 1994, respectively. a reasonable estimate of fair value. For long-term finan- cial instruments not readily marketable, fair values were Inventories – Inventories are stated at the lower of cost estimated based upon discounted future cash flows at or market. Cost is determined principally on a first-in, prevailing market interest rates. Based on these assump- first-out basis. Specific identification and average tions, management believes the fair market values of the cost methods are also used for packing materials and Company’s financial instruments other than certain debt operating supplies. instruments (see Note 7) are not materially different Agricultural Costs – The costs of growing bananas and from their recorded amounts as of December 30, 1995. pineapples are charged to operations as incurred. Grow- Stock Based Compensation – In October 1995, the Finan- ing costs related to other crops are recognized when the cial Accounting Standards Board issued Statement of crops are harvested and sold. Financial Accounting Standards No. 123, “Accounting for Investments – Investments in affiliates with ownership of Stock-Based Compensation”(“SFAS 123”). SFAS 123 20% to 50% are generally recorded on the equity method. defines a fair value based method of accounting for employee stock compensation plans, but allows for the Property, Plant and Equipment – Property, plant and continuation of the intrinsic value based method of equipment are stated at cost, less accumulated depre- accounting to measure compensation cost prescribed by ciation. Depreciation is computed principally by the Accounting Principles Board Opinion No. 25 “Accounting straight-line method over the estimated useful lives of for Stock Issued to Employees” (“APB 25”). For com- the assets. panies electing not to change their accounting, SFAS 123 Foreign Exchange – The United States (“U.S.”) dollar is requires pro forma disclosures of earnings and earnings the functional currency for substantially all of the Com- per share as if the change in accounting provisions of pany’s consolidated operations. Net foreign exchange SFAS 123 had been adopted. The Company has elected transaction gains or losses for companies with the U.S. to continue to utilize the accounting method prescribed dollar as their functional currency are included in by APB 25 and adopt the disclosure requirements of 24
  • 21. SFAS 123 when required in 1996. As a result, SFAS 123 record on December 20, 1995 received a dividend of one will have no effect on the financial condition or results share of Castle common stock for every three shares of of operations of the Company. the Company’s common stock. The distribution is not currently taxable to the Company’s shareholders since Use of Estimates – The preparation of financial state- the Company did not, for federal income tax purposes, ments in conformity with generally accepted accounting have current earnings and profits for 1995 or accumu- principles requires management to make estimates and lated earnings and profits as of the distribution date. assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and Under the plan of distribution, the Company transferred liabilities at the date of the financial statements and the approximately $1.0 billion of net assets to Castle, and in reported amounts of revenues and expenses during the partial consideration thereof the Company received cash reporting period. Actual results could differ from those proceeds of approximately $235 million and a $10 million estimates. Management believes that these estimates note receivable from Castle which bears interest at the and assumptions provide a reasonable basis for the fair rate of 7% per annum and is due December 8, 2000. As presentation of the financial statements. a result of the distribution, the Company’s common shareholders’ equity was reduced by approximately Reclassifications – Certain prior year amounts have been $582 million. (See Note 10.) reclassified to conform to the 1995 presentation. In connection with the distribution, the operating Note 3 – Acquisitions and Dispositions results of the real estate and resorts business have been accounted for as discontinued operations. The 1994 During 1995, the Company acquired various food and 1993 consolidated financial statements have been operations located in Europe for an aggregate cash pur- restated to conform with the 1995 presentation. chase price of approximately $35 million. During 1994, the Company acquired a 35% interest in a produce distri- During 1995, the Company elected to adopt Statement bution company in the United Kingdom and various of Financial Accounting Standards No. 121, “Accounting other food and food related operations for an aggregate for the Impairment of Long-Lived Assets and Long-Lived purchase price of approximately $64 million. Each of Assets to be Disposed of” (“SFAS 121”), which requires an these acquisitions was accounted for as a purchase and impaired property to be written down to fair value. The accordingly, the purchase price was allocated to the net Company reviewed certain of its real estate and resort assets acquired based upon their estimated fair values properties to determine whether expected future cash as of the date of acquisition. The fair values of assets flows (undiscounted and without interest charges) from acquired and liabilities assumed were $70 million each property would result in the recovery of the carrying (including cash of $3 million) and $35 million for 1995 amount of such property. Certain adverse developments and $91 million (including cash of $1 million) and affecting the Lana’i resort properties which occurred $27 million for 1994. subsequent to the Company’s 1994 year end caused management to substantially lower its estimates of future Subsequent to December 30, 1995 the Company signed cash flow and led to a determination that the Lana’i resort an agreement to acquire a Spanish grower/marketer of properties were impaired in accordance with generally citrus and fresh vegetables for approximately $25 mil- accepted accounting principles. In accordance with State- lion. The acquisition is expected to be completed in the ment of Financial Accounting Standards No. 67, “Account- first quarter of 1996. ing for Costs and Initial Rental Operations of Real Estate During 1995, the Company completed the sale of its world- Projects” (“SFAS 67”), each of the Company’s real estate wide juice and juice beverage business, resulting in net projects was carried at the lower of cost or net realizable proceeds of approximately $270 million and a pretax gain value, with net realizable value deemed to be the undis- of approximately $145 million. In addition, during 1995 counted estimated future cash flows from the project. the Company began to implement its plan to sell certain Under SFAS 67, the Lana’i resort properties would have of its agricultural properties and other assets which have been written down by approximately $91 million to their generated low returns. The book value of the assets to be net realizable value. In accordance with SFAS 121, an sold exceeded the estimated fair value less costs to sell, impairment loss of $103.8 million after tax was recorded resulting in an adjustment of $83.3 million. The above as part of discontinued operations in the accompanying dispositions resulted in a net pretax gain of $61.7 million. 1995 statement of income. Revenues from discontinued operations for 1995, 1994 Note 4 – Discontinued Operations and 1993 were $349 million, $343 million and $322 mil- On December 28, 1995, the Company completed the lion, respectively. Income (loss) from discontinued opera- separation of its real estate and resorts entity, Castle & tions reflects an allocation of the Company’s overall Cooke, Inc. (“Castle”) from its food business. In connec- interest costs, based on the cash proceeds and the inter- tion with the distribution, each Company shareholder of est bearing note received by the Company at distribution, 25
  • 22. of $7.3 million, $6.8 million and $7.8 million after tax for Depreciation expense for 1995, 1994 and 1993 totaled 1995, 1994 and 1993, respectively. Net assets held for dis- $106.2 million, $107.3 million and $96.7 million, tribution as of December 31, 1994 consist primarily of respectively. receivables, real estate developments, property and equip- Note 7 – Debt ment, accounts payable and accrued liabilities. Notes payable consisted primarily of short-term borrow- Note 5 – Current Assets and Liabilities ings required to fund certain foreign operations and Short-term investments of $16.3 million and $8.3 mil- totaled $21.8 million with a weighted average interest lion as of December 30, 1995 and December 31, 1994, rate of 12.8% as of December 30, 1995, and $50.4 mil- respectively, consisted principally of time deposits. lion with a weighted average interest rate of 6.2% as of Outstanding checks which are funded as presented for December 31, 1994. payment totaled $54.8 million and $35.8 million as of Long-term debt consisted of: December 30, 1995 and December 31, 1994, respec- (in thousands) 1995 1994 tively, and were included in accounts payable. Unsecured debt Details of certain current assets were as follows: Notes payable to banks at (in thousands) 1995 1994 an average interest rate Receivables of 6.8% (6.2% – 1994) $169,547 $ ,835,598 Trade $374,441 $393,331 6.75% notes due 2000 225,000 225,000 Notes and other 125,534 129,198 7% notes due 2003 300,000 300,000 Affiliated operations 9,322 7,294 7.875% debentures due 2013 175,000 175,000 Various other notes due 1996- 509,297 529,823 2007 at an average interest Allowance for doubtful accounts (46,994) (35,068) rate of 5.4% (5.2% – 1994) 17,085 7,840 $462,303 $494,755 Secured debt Inventories Mortgages, contracts and Finished products $179,390 $205,462 notes due 1996-2012, at Raw materials and work in an average interest rate progress 216,830 208,606 of 9.0% (9.6% – 1994) 13,890 17,608 Growing crop costs 51,980 36,605 Unamortized debt discount Packing materials 25,227 23,973 and issue costs (2,745) (3,092) Operating supplies and other 86,233 77,877 897,777 1,557,954 $559,660 $552,523 Current maturities (1,779) (3,450) $895,998 $1,554,504 Accrued liabilities as of December 30, 1995 and Decem- ber 31, 1994 included approximately $109.0 million and The Company estimates the fair value of its fixed interest $84.6 million, respectively, of amounts due to growers. rate unsecured debt based on current quoted market prices. The estimated fair value of unsecured noncallable In 1993, the Company recorded a charge of $42.5 million notes (face value $700 million) was $714 million and related to the continuation of the cost reduction and profit $628 million at December 30, 1995 and December 31, improvement programs initially implemented in 1992. 1994, respectively. In May 1994, the Company replaced its existing revolving Note 6 – Property, Plant and Equipment credit facility with a $1 billion, 5-year revolving credit Major classes of property, plant and equipment were facility (“Facility”). At the Company’s option, borrowings as follows: under the Facility bear interest at a certain percentage (in thousands) 1995 1994 over the agent’s prime rate or the London Interbank Offered Rate (“LIBOR”). Provisions under the Facility Land and land improvements $ ,397,015 $ ,462,171 require the Company to comply with certain financial Buildings and improvements 259,974 263,184 covenants which include a maximum permitted ratio of Machinery and equipment 832,855 955,197 consolidated debt to net worth and a minimum required Construction in progress 81,339 88,330 fixed charge coverage ratio. At December 30, 1995 and 1,571,183 1,768,882 December 31, 1994, net borrowings outstanding under Accumulated depreciation (554,192) (495,337) this facility were approximately $81 million and $1,016,991 $1,273,545 $771 million, respectively. 26
  • 23. The Company may also borrow under uncommitted lines International Plans (in thousands) 1995 1994 of credit at rates offered from time to time by various Actuarial present value of banks that may not be lenders under the Facility. Net accumulated benefit obligation borrowings outstanding under the uncommitted lines of Vested $( 9,411 $ (8,463 credit totaled $89 million and $65 million at December Non-vested 3,303 6,635 30, 1995 and December 31, 1994, respectively. $(12,714 $(15,098 Sinking fund requirements and maturities with respect to Actuarial present value of long-term debt as of December 30, 1995 were as follows projected benefit obligation $(28,796 $(27,447 (in millions): 1997 – $3.3; 1998 – $6.9; 1999 – $171.0; Plan assets at fair value, primarily 2000 – $225.7; and thereafter $489.1. stocks and bonds 2,176 1,970 Interest payments during 1995, 1994 and 1993 totaled Projected benefit obligation in $86.4 million, $67.6 million and $45.5 million, respectively. excess of plan assets (26,620) (25,477) Unrecognized net transition Note 8 – Employee Benefit Plans obligation 3,133 3,580 Unrecognized prior service cost 3,104 4,325 The Company has qualified and non-qualified defined Unrecognized net loss 1,576 598 benefit pension plans covering certain full-time employ- Additional minimum liability (868) (695) ees. Benefits under these plans are generally based on each employee’s eligible compensation, except for certain Accrued pension liability $(19,675) $(17,669) hourly plans which are based on negotiated benefits and For U.S. plans, the projected benefit obligation was deter- years of service. mined using assumed discount rates of 7.5% in 1995 and For U.S. plans, the Company’s funding policy is to fund 8.5% in 1994 and assumed rates of increase in future the net periodic pension cost plus a 15-year amortization compensation levels of 4.5% in 1995 and 5% in 1994. The of the unfunded liability. The plans covering interna- expected long-term rate of return on assets was 9% in tional employees are generally not funded. both years. For international plans, the projected benefit obligation was determined using assumed discount rates The status of the defined benefit pension plans was as of 7.5% to 20% in 1995 and 8.5% to 20% in 1994 and follows: assumed rates of increase in future compensation levels U.S. Plans (in thousands) 1995 1994 of 4.5% to 17.5% in 1995 and 5% to 17.5% in 1994. The Actuarial present value of expected long-term rate of return on assets for interna- accumulated benefit obligation tional plans was 9% to 20% in 1995 and 12% to 20% Vested $227,572 $212,149 in 1994. Non-vested 3,581 3,195 Pension expense for the U.S. and international plans $231,153 $215,344 consisted of the following components: Actuarial present value of (in thousands) 1995 1994 1993 projected benefit obligation $239,855 $223,082 Service cost-benefits Plan assets at fair value, primarily earned during stocks and bonds 238,730 206,326 the year $ (8,114 $ (7,158 $ (5,902 Projected benefit obligation in Interest cost on excess of plan assets (1,125) (16,756) projected benefit Unrecognized net transition obligation 21,270 20,112 20,616 obligation (942) (1,087) Actual (return) loss Unrecognized prior service cost 2,662 1,714 on plan assets (46,944) 4,656 (31,448) Unrecognized net loss (83) 17,866 Net amortization and Additional minimum liability (1,941) (10,917) deferral 28,337 (22,980) 13,379 Accrued pension liability $ (1,429) $ (9,180) Pension expense $(10,777 $ (8,946 $ (8,449 During 1995, the Company recognized a net curtailment loss of $3.6 million for the international plans. This loss was primarily due to additional benefit payments result- ing from a reduction in workforce. The Company has two 401(k) plans generally covering full-time U.S. employees. Eligible employees may defer a 27
  • 24. percentage of their annual compensation up to a maxi- December 30, 1995 of approximately $7.5 million and the mum allowable under federal income tax law to supple- aggregate of the service and interest cost components of ment their retirement income. These plans provide for postretirement benefit expense for 1995 of approximately Company contributions based on a certain percentage of $0.9 million. The weighted average discount rate used each participant’s contribution. Total Company contribu- in determining the APBO was 7.5% in 1995 and 8.5% in tions to these plans for 1995, 1994 and 1993 were $4.4 1994 for U.S. plans and 20% in 1995 and 1994 for the million, $4.7 million and $4.5 million, respectively. international plan. The plans are not funded. The Company is also a party to various industrywide Note 9 – Stock Options and Awards collective bargaining agreements which also provide pen- sion benefits. Total contributions to these plans plus Under the 1991 and 1982 Stock Option and Award Plans direct payments to pensioners were $0.8 million in 1995, (“the Option Plans”), the Company can grant incentive $0.9 million in 1994 and $0.8 million in 1993. stock options, non-qualified stock options, stock apprecia- tion rights, restricted stock awards and performance share In addition to providing pension benefits, the Company awards to officers and key employees of the Company. provides certain health care and life insurance benefits Stock options may be exercised for up to ten years from for eligible retired employees. Certain employees may the date of grant with or without stock appreciation rights, become eligible for such benefits if they fulfill established as determined by the committee of the Company’s Board of requirements upon reaching retirement age. Directors administering the Option Plans. No stock appreci- The status of the postretirement benefit plans was ation rights, restricted stock awards or performance share as follows: awards were outstanding at December 30, 1995. (in thousands) 1995 1994 During 1995, the 1995 Non-Employee Directors Stock Option Plan (“the Directors Plan”) was adopted by the Accumulated postretirement Board of Directors and approved by the Company’s benefit obligation (“APBO”) shareholders. On February 15th of each year, each active Retirees $66,757 $61,190 non-employee director will receive a non-discretionary Fully eligible actives 6,892 9,043 grant of non-qualified stock options (“the Options”). The Other actives 7,669 8,247 Options vest over a three-year period and expire 10 years 81,318 78,480 after the date of the grant or upon early termination Unrecognized prior service cost 1,897 1,516 as defined by the plan agreement. Unrecognized net gain 4,660 6,101 Changes in outstanding stock options were as follows: Accrued postretirement benefit liability $87,875 $86,097 Average Shares Price Postretirement benefit expense included the following Outstanding, January 2, 1993 1,495,730 $29.70 components: Granted 411,850 33.12 (in thousands) 1995 1994 1993 Exercised (41,733) 27.88 Canceled (146,065) 36.52 Service cost – benefits earned during the year $ ,449 $ ,578 $2,803 Outstanding, January 1, 1994 1,719,782 29.98 Interest cost on APBO 7,258 6,755 7,484 Granted 508,500 29.07 Net amortization and Exercised (12,117) 26.69 deferral (342) 26 5 Canceled (160,401) 34.39 Postretirement benefit Outstanding, December 31, 1994 2,055,764 29.43 expense $7,365 $7,359 $8,292 Granted 563,000 27.21 Exercised (371,989) 13.73 For U.S. plans, an annual rate of increase in the per capita Canceled (294,513) 31.30 cost of covered health care benefits of 10% in 1996 Net adjustment for distribution of decreasing to 5% in 2006 and thereafter was assumed real estate and resorts business 8,158 in determining the APBO for 1995, and 13% in 1995 Outstanding, December 30, 1995 1,960,420 $29.23 decreasing to 5.5% in 2010 was assumed in determining Exercisable, December 30, 1995 1,048,233 $31.61 the APBO for 1994. For the Company’s international plan, the assumed health care cost trend rate was 20% in 1995 In December 1995, the number and exercise price of all and 1994. Increasing the assumed health care cost trend options outstanding were adjusted to reflect the impact rate by one percentage point in each year would have of the distribution of the real estate and resorts business. resulted in an increase in the Company’s APBO as of (See Note 4.) 28
  • 25. were reserved for issuance under the Option Plans and Note 10 – Shareholders’ Equity the Directors Plan, respectively. There was no preferred Authorized capital at December 30, 1995 consisted stock outstanding. of 80 million shares of no par value common stock The Company’s dividend policy is to pay quarterly divi- and 30 million shares of no par value preferred stock, dends on common shares at an annual rate of 40 cents issuable in series. At December 30, 1995, approximately per share. 3.7 million shares and 50,000 shares of common stock Changes in shareholders’ equity were as follows: Cumulative Foreign Total Additional Currency Common Common Common Paid-in Retained Translation Shareholders’ Shares (in thousands, except share data) Stock Capital Earnings Adjustment Equity Outstanding Balance, January 2, 1993 $320,057 $163,686 $(542,468 $(25,193) $1,001,018 59,414,655 Net income – – 77,889 – 77,889 – Cash dividends declared ($.40 per share) – – (23,784) – (23,784) – Translation adjustments – – – (4,273) (4,273) – Other 42 1,222 – – 1,264 41,263 Balance, January 1, 1994 320,099 164,908 596,573 (29,466) 1,052,114 59,455,918 Net income – – 67,883 – 67,883 – Cash dividends declared ($.50 per share) – – (29,739) – (29,739) – Translation adjustments – – – (10,272) (10,272) – Other 22 633 – – 655 22,190 Balance, December 31, 1994 320,121 165,541 634,717 (39,738) 1,080,641 59,478,108 Net income – – 23,331 – 23,331 – Cash dividends declared ($.30 per share) – – (17,913) – (17,913) – Translation adjustments – – – (859) (859) – Distribution of real estate and resorts business – – (581,866) – (581,866) – Other 376 4,725 – – 5,101 376,631 Balance, December 30, 1995 $320,497 $170,266 $ (58,269 $(40,597) $ ,508,435 59,854,739 29
  • 26. Pretax earnings attributable to foreign operations were Note 11 – Contingencies $181 million, $165 million and $145 million for 1995, At December 30, 1995, the Company was contingently 1994 and 1993, respectively. Undistributed earnings of liable for guarantees of indebtedness issued on behalf of foreign subsidiaries, which have been or are intended certain key fruit suppliers of $82.2 million and other to be permanently invested, aggregated $972 million at guarantees associated with unaffiliated entities integral December 30, 1995. to the Company’s operations of $24.1 million. The Company’s reported income tax expense varied from The Company is involved from time to time in various the expense calculated using the U.S. federal statutory claims and legal actions incident to its operations, both as tax rate for the following reasons: plaintiff and defendant. In the opinion of management, (in thousands) 1995 1994 1993 after consultation with legal counsel, none of such claims is expected to have a material adverse effect on the Expense computed at Company’s financial position or results of operations. U.S. federal statutory income tax rate $(61,538 $(23,851 $(23,007 Note 12 – Lease Commitments Foreign income taxed at different rates (16,366) (11,036) (24,014) The Company has obligations under non-cancelable Dividends from operating leases, primarily for ship charters and contain- subsidiaries – 187 341 ers, and certain equipment and office facilities. Lease State and local income terms are generally for less than the economic life of the tax, net of federal property. Certain agricultural land leases provide for income tax benefit 4,293 (584) (553) increases in minimum rentals based on production. Total Impact of tax rate rental expense was $208.5 million, $177.6 million and change – – 1,450 $168.0 million (net of sublease income of $14.9 million, Other 6,535 (2,518) 3,369 $13.3 million and $19.1 million) for 1995, 1994 and 1993, respectively. Reported income tax expense $(56,000 $ (9,900 $ (3,600 During 1995, the Company entered into an agreement with a syndicate of banks for the sale and leaseback of Total income tax payments, net of refunds, for 1995, 1994 certain vessels including four recently constructed and 1993 were $51.3 million, $4.1 million and $23.8 mil- refrigerated vessels. This transaction generated net pro- lion, respectively. Subsequent to 1995, the Company ceeds of approximately $133 million. The Company will filed for and received a federal income tax refund of lease the vessels for seven years. $22.9 million. At December 30, 1995, the Company’s aggregate mini- Deferred tax assets (liabilities) were comprised of the mum rental commitments, before sublease income, were following: as follows (in millions): 1996 – $172.4; 1997 – $77.0; (in thousands) 1995 1994 1993 1998 – $40.8; 1999 – $34.4; 2000 – $30.7 and thereafter – $176.5. Total future sublease income is $18.3 million. Operating reserves $(36,840 $ (2,053 $(13,674 Accelerated depreciation (37,868) (35,040) (38,739) Note 13 – Income Taxes Inventory valuation methods 3,690 13,086 5,917 Income tax expense (benefit) was as follows: Effect of differences (in thousands) 1995 1994 1993 between book values Current assigned in prior Federal, state and local $ 2,292 $(25,594) $(21,243 acquisitions and Foreign 23,279 21,421 13,625 historical tax values (37,927) (61,811) (53,141) Postretirement benefits 31,263 32,484 34,768 25,571 (4,173) 34,868 Current year Deferred acquisitions – – (8,603) Federal, state and local 30,656 8,989 (25,883) Tax credit carryforward 39,310 30,509 39,075 Foreign (227) 5,084 (5,385) Net operating loss 30,429 14,073 (31,268) carryforward 79,616 10,998 3,115 $56,000 $ (9,900 $ (3,600 Other, net (22,308) (29,642) (19,317) $(92,616 $(37,363) $((23,251) 30
  • 27. The Company has recorded deferred tax assets of (in millions) 1995 1994 1993 $79.6 million reflecting the benefit of approximately Revenue $30 million in capital loss carryforwards, which begin to North America $1,959 $1,933 $1,890 expire in 2000, and $195 million of ordinary loss carry- Latin America 771 677 640 forwards which begin to expire in 2009 to the extent Asia 914 842 700 not utilized. Europe 959 777 577 Intercompany The tax credit carryforward amount is primarily com- elimination (799) (730) (699) prised of alternative minimum tax credits which can be $3,804 $3,499 $3,108 utilized to reduce regular tax liabilities and may be car- Operating Income ried forward indefinitely. The remaining credits expire North America $ ,72 $, (8) $, 39 from 1998 to 2010. Latin America 138 131 62 Total deferred tax assets and deferred tax liabilities were Asia 14 16 77 as follows: Europe 3 13 – Corporate (34) (14) (11) (in thousands) 1995 1994 1993 Cost reduction program – – (43) Deferred tax assets $(281,392 $(182,078 $(176,202 $, 193 $, 138 $, 124 Deferred tax liabilities (188,776) (219,441) (199,453) Identifiable Assets $ (92,616 $ (37,363) $ (23,251) North America $, 973 $1,065 $1,043 The Company remains contingently liable with respect to Latin America 698 776 707 certain tax credits sold with recourse by Flexi-Van Cor- Asia 327 332 266 poration (“Flexi-Van”), the Company’s former transporta- Europe 339 339 211 tion equipment leasing business, to a third party in 1981. Corporate 105 107 110 These credits, which have been contested by the Internal 2,442 2,619 2,337 Revenue Service, continue to be litigated by Flexi-Van. Net assets held Flexi-Van, which separated from the Company in 1987 for distribution – 1,066 822 and was subsequently acquired by David H. Murdock, has $2,442 $3,685 $3,159 indemnified the Company against obligations that might result from the resolution of this matter. Notes: Revenue includes inter-area transfers from Latin America to North America, Asia and Europe of $514 million, $444 million and Note 14 – Geographical Area Segment Information $418 million in 1995, 1994 and 1993, respectively; from Asia to North America and Europe of $184 million, $190 million and $227 million in The Company’s only significant segment of business is 1995, 1994 and 1993, respectively; from North America to Asia and food products. Revenue, operating income and identifi- Europe of $72 million, $77 million and $38 million in 1995, 1994 and able assets pertaining to the geographic areas in which 1993, respectively; and from Europe to North America, Asia and Latin the Company operates are presented below. Product America of $29 million, $19 million and $16 million in 1995, 1994 and 1993, respectively. transfers between geographic areas are accounted for based on the estimated fair market value of the products. Net assets held for distribution as of December 31, 1994 and January 1, 1994 are related to the real estate and resorts business distributed to the Company’s shareholders in 1995 (see Note 4). 31
  • 28. Note 15 – Quarterly Financial Information (Unaudited) The following table presents summarized quarterly results. First Second Third Fourth (in thousands, except per share data) Quarter Quarter Quarter Quarter Year 1995 Revenue $849,124 $1,068,814 $1,048,594 $837,314 $3,803,846 Gross margin 150,749 183,423 148,756 103,049 585,977 Income from continuing operations 24,411 75,855 14,278 5,280 119,824 Income (loss) from discontinued operations (790) 2,807 (105,054) 6,544 (96,493) Net income (loss) $ 23,621 $ , 78,662 $ (90,776) $ 11,824 $ ,23,331 Earnings (loss) per common share Continuing operations $ .41 $ , 1.27 $ ,.24 $ .09 $ ,2.00 Discontinued operations (.01) .05 (1.76) .11 (1.61) Net income (loss) per common share $ .40 $ , 1.32 $ (1.52) $ .20 $ ,0.39 1994 Revenue $756,701 $ ,915,349 $ ,992,444 $834,059 $3,498,553 Gross margin 133,365 155,867 138,633 105,013 532,878 Income (loss) from continuing operations 28,956 33,891 (2,006) (2,596) 58,245 Income from discontinued operations 793 1,762 3,291 3,792 9,638 Net income $ 29,749 $ , 35,653 $, 1,285 $ 1,196 $ ,67,883 Earnings (loss) per common share Continuing operations $ .48 $, .57 $, (.03) $ (.04) $ , .98 Discontinued operations .02 .03 .05 .06 .16 Net income (loss) per common share $ .50 $, .60 $, .02 $ .02 $ ,1.14 All quarters have twelve weeks, except the third quarters of both years which have sixteen weeks. The second quarter of 1995 reflects the $61.7 million net gain on assets sold or held for disposal. Third quarter 1995 discontinued operations reflect the $103.8 million asset impairment write-down related to the Lana’i resort properties. Note 16 – Common Stock Data (Unaudited) The following table shows the market price range of the Company’s common stock for each quarter in 1995 and 1994. High Low 1995 First Quarter $283/8 $241/2 Second Quarter 281/4 303/4 Third Quarter 351/2 281/2 Fourth Quarter 381/2 331/2 Year $381/2 $241/2 1994 First Quarter $35 1/2 $263/8 Second Quarter 341/2 261/8 Third Quarter 30 3/4 261/4 Fourth Quarter 283/8 221/2 Year $351/2 $221/2 32
  • 29. Dole Food Company, Inc. R I P A EPORT OF NDEPENDENT UBLIC CCOUNTANTS To the Shareholders and Board of Directors of Dole Food Company, Inc.: We have audited the accompanying consolidated balance sheets of Dole Food Company, Inc. (a Hawaii corpora- tion) and subsidiaries as of December 30, 1995 and December 31, 1994, and the related consolidated state- ments of income and cash flow for the years ended December 30, 1995, December 31, 1994 and January 1, 1994. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examin- ing, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Dole Food Company, Inc. and subsidiaries as of December 30, 1995 and December 31, 1994, and the results of its operations and its cash flow for the years ended December 30, 1995, December 31, 1994 and January 1, 1994, in conformity with generally accepted accounting principles. Los Angeles, California February 5, 1996 33
  • 30. Dole Food Company, Inc. M ’ D ANALY R ANAGEMENT S ISCUSSION AND SIS OF ESULTS O F POSITI OF PERATIONS AND INANCIAL ON sell, and resulted in an adjustment of $83 million in the 1995 Compared With 1994 – second quarter of 1995. The gain on the sale of the bev- Revenue – Consolidated revenue from continuing opera- erage business, net of adjustments related to the planned tions increased 9% over the prior year, from $3.5 billion disposal of assets, resulted in a net pretax gain of $62 mil- for 1994 to $3.8 billion for 1995 and increased 14% com- lion and an increase in the Company’s estimated 1995 pared to 1994, excluding revenues from the recently sold annualized income tax rate from 23% to 32%. The sale of worldwide juice and juice beverage business. Growth in the juice business and the planned sale of agricultural existing product lines, increases in worldwide banana properties and other assets are not expected to have a revenues, and temporary market conditions for the fresh significant impact on the Company’s continuing operat- vegetable business resulting from the March 1995 Cali- ing income levels. fornia floods are primarily attributable for the increases The European Union (“E.U.”) banana regulations in revenue. which impose quotas and tariffs on bananas remained in Selling, Marketing and Administrative Expenses – Selling, mar- effect in 1995, and continue in effect in 1996. Trade keting and administrative expenses from continuing opera- negotiations and discussions continue between theE.U., tions were $393 million or 10% of sales for 1995 compared the United States and the individual banana exporting to $395 million or 11% of sales for 1994. The decrease in countries. These trade negotiations could lead to further expense was primarily due to the sale of the worldwide juice changes in the regulations governing banana exports to and juice beverage business in the second quarter of 1995, the E.U. The net impact of these changing regulations on offset by business expansions and acquisitions. the Company’s future results of operations is not deter- minable at this time. Operating Income – Consolidated operating income from The Company distributes its products in more than continuing operations increased 40% to $193 million in 90 countries throughout the world. Its international sales 1995 compared to $138 million in 1994. Higher earnings are usually transacted in U.S. dollars and major Euro- in 1995 were primarily related to improvements in the pean and Asian currencies, while certain costs are worldwide banana markets, particularly in the Pacific incurred in currencies different from those that are Rim, and the fresh vegetable business which profited received from the sale of the product. Results of opera- from temporary market conditions resulting from the tions may be affected by fluctuations of currency March 1995 California floods. The fresh and processed exchange rates in both the sourcing and selling locations. pineapple and the value-added, pre-cut salad businesses The overall net impact of foreign currency fluctuations also posted improved results in 1995, partially offset by was immaterial to the results of operations in 1995 lower results for dried fruit and nuts. and 1994. During the second quarter of 1995, the sale of the Interest Expense, Net – Interest expense, net of interest Company’s worldwide juice and juice beverage business income, increased to $74 million in 1995 from $67 mil- was completed, resulting in a pretax gain of approxi- lion in 1994, due to higher interest rates, offset by mately $145 million. Revenues related to this business slightly lower average debt levels. totaled approximately $300 million in 1994. In addition, during the second quarter of 1995, the Company began Income Taxes – The Company’s effective income tax rate to implement its plans to sell certain of its agricultural increased to 32% in 1995 from 15% in 1994, primarily as properties and other assets which have generated low a result of a change in the mix of domestic and foreign returns. Sales agreements have been entered into with earnings impacted by the non-recurring net gain on the respect to certain assets, and sales efforts are proceeding sale of the Company’s worldwide juice and juice beverage with respect to the others. The book value of the assets business in the second quarter of 1995. to be sold exceeded the estimated fair value less costs to 34
  • 31. Discontinued Operations – The Company reported a increase was primarily attributable to new businesses $97 million or $1.61 per share loss from discontinued acquired and to expansions of existing product lines. operations for 1995. The loss from discontinued opera- Selling, Marketing and Administrative Expenses – Selling, tions includes distribution expenses of $3 million, net marketing and administrative expenses from continu- of tax, and a write-down to certain real estate and resort ing operations increased from $333 million in 1993 to properties of $104 million, net of tax. During 1995, the $395 million in 1994, largely due to the effects of Company reviewed certain of its real estate and resort acquired businesses as well as additional promotions properties to determine, in accordance with generally and marketing programs for the value-added and accepted accounting principles, whether expected future processed pineapple operations. cash flows (undiscounted and without interest charges) Operating Income – Consolidated operating income from from each property would result in the recovery by the continuing operations totaled $138 million in 1994 and Company of the carrying amount of such property. Cer- $166 million in 1993 before the 1993 pretax charge of tain adverse developments affecting the Lana’i resort $43 million for the Company’s cost reduction program. properties which occurred subsequent to the Company’s Worldwide banana results increased in 1994 despite the 1994 fiscal year end caused management to substantially weak Pacific Rim banana market which resulted from a lower its estimate of that future cash flow and led to a continued oversupply of product. The E.U. banana regu- determination that the Lana’i resort properties were lations which impose quotas and tariffs on bananas were impaired as defined by generally accepted accounting in full effect in 1994 and continued to be in effect in 1995. principles. In accordance with Statement of Financial Accounting Standards No. 121 “Accounting for the The improvement in banana earnings was offset by Impairment of Long-Lived Assets and Long-Lived Assets declines in other food operations. The fresh vegetable to be Disposed of (“SFAS 121”), an impairment loss of group reported lower results in 1994 primarily due to $104 million after tax was recorded as part of discon- poor market conditions for lettuce and celery which tinued operations in the accompanying statements of existed for the first three quarters of the year. Results for income for 1995 for the difference between the carrying processed pineapple were also lower in 1994 compared value and the fair value of the Lana’i resort properties to 1993, although price pressures resulting from heavy and certain other residential properties. industry supplies experienced in the prior year and for New Accounting Pronouncement – In October 1995 the most of 1994 began to improve at the end of 1994. Lower Financial Accounting Standards Board issued Statement operating income in 1994 was also attributable to the of Financial Accounting Standards No. 123, “Accounting dried fruit and nuts operations. In addition, operating for Stock-Based Compensation” (“SFAS 123”). The Com- income for 1993 included a pretax gain of approximately pany has elected to adopt the disclosure requirements of $9 million related to the sale of the Company’s interest SFAS 123 when the adoption is required in 1996. As a in the California and Hawaiian Sugar Company. result, SFAS 123 will have no effect on the financial con- Interest Expense, Net – Interest expense, net of inter- dition or results of operations of the Company. The pro- est income, from continuing operations increased to visions of SFAS 123 are more fully described in the Notes $67 million in 1994 from $48 million in 1993, primarily to Consolidated Financial Statements. attributable to higher average debt levels and higher interest rates. 1994 Compared With 1993 – Revenue – Consolidated revenue from continuing operations Other Expense, Net – Other expense decreased in 1994, for 1994 increased $390 million, or 13% over the prior year, primarily as a result of lower minority interest expense reaching $3.5 billion compared to $3.1 billion for 1993. This 35
  • 32. standing bank indebtedness. Additional consideration due to a smaller minority share at the Company’s Latin included issuance to the Company of 3,500 shares of American beverage operation and lower earnings for the cumulative preferred stock which was sold to third Company’s citrus operations. parties for $35 million. Income Taxes – The Company’s effective income tax rate The Company significantly reduced its debt level increased to 15% for 1994 from 5% for 1993, primarily as in 1995. The Company has a $1 billion revolving credit a result of a change in the mix of domestic and foreign agreement (“the Facility”) for a five-year term. At the earnings. Company’s option, borrowings under the Facility bear interest at a certain percentage over the agent’s prime Liquidity and Capital Resources rate or the London Interbank Offered Rate (“LIBOR”). At Operations in 1995 provided strong, positive cash flow December 30, 1995, the Company had net borrowings which, along with proceeds from divestitures of certain outstanding of $81 million under the Facility. The Com- businesses and assets, was used to reduce the Company’s pany also borrows under uncommitted lines of credit at debt level. Total debt (net of cash and short-term invest- rates offered from time to time by various banks that ments) was $847 million at December 30, 1995 reduced may or may not be lenders under the Facility. At Decem- from $1.563 billion at December 31, 1994. Cash and ber 30, 1995, net borrowings under the uncommitted short-term investments totaled $72 million at December lines of credit totaled approximately $89 million, with a 30, 1995 compared to $45 million at December 31, 1994. weighted average interest rate of 6.1%. As discussed in Operating activities from continuing operations the Notes to Consolidated Financial Statements, the generated $235 million of positive cash flow for 1995 Company also has outstanding at December 30, 1995, compared to $114 million in 1994. The increase was $700 million of public unsecured notes, which were primarily attributable to significant net working capital issued in 1993. These notes bear interest at 6.75%, 7% improvements and improved operating results. and 7.875% and mature in years 2000, 2003 and 2013. Cash flow from investing activities, which reflected the Capital expenditures totaled $90 million in 1995 com- divestiture of certain businesses and agricultural proper- pared to $212 million in 1994. The 1995 expenditures were ties, totaled $308 million in 1995. During the second invested in various business expansions, infrastructure quarter of 1995, the Company completed the sale of its improvements and modernization of existing facilities. worldwide juice and juice beverage business. Net pro- During 1995, the Company acquired various food opera- ceeds from the sale were $270 million. In addition, the tions, primarily located in Europe, for an aggregate cash Company entered into the sale and leaseback of certain purchase price of $35 million. vessels which generated net proceeds of $133 million. The Company paid four quarterly dividends of 10 cents Also during 1995, the Company divested its pistachio per share on its common stock totaling $24 million in 1995. business and certain North American agricultural properties. In December 1995, the Company separated its real estate and resorts business from its food business, in a pro rata distribution to the Company’s shareholders. As partial consideration for the Company’s real estate and resorts business the Company received cash of $200 million and used the cash proceeds to repay out- 36
  • 33. Dole Food Company, Inc. R O S F D ESULTS OF PERATIONS AND ELECTED INANCIAL ATA (in millions, except per share data) 1995 1994 1993 1992 1991 Revenue $3,804 $3,499 $3,108 $3,120 $2,965 Cost of products sold 3,218 2,966 2,609 2,633 2,403 Gross margin 586 533 499 487 562 Selling, marketing and administrative expenses 393 395 333 312 339 Cost reduction program – – 43 42 – Operating income 193 138 123 133 223 Interest expense – net (74) (67) (48) (48) (38) Net gain on assets sold or held for disposal 62 – – – – Other expense – net (5) (3) (9) (12) (7) Income from continuing operations before income taxes and cumulative effect of accounting change 176 68 66 73 178 Income taxes (56) (10) (4) (7) (39) Income from continuing operations before cumulative effect of accounting change 120 58 62 66 139 Discontinued operations (97) 10 16 (2) (5) Income before cumulative effect of accounting change 23 68 78 64 134 Cumulative effect of accounting change – – – (48) – Net income $ ,23 $ , 68 $ , 78 $ ,16 $ ,134 Earnings per common share Continuing operations before cumulative effect of accounting change $ 2.00 $ .98 $ 1.04 $ 1.11 $ 2.33 Discontinued operations (1.61) .16 .26 (.02) (.09) Cumulative effect of accounting change – – – (.81) – Net income $ .39 $ 1.14 $ 1.30 $ .26 $ 2.24 Other statistics Working capital $ ,480 $ ,495 $ ,391 $ ,398 $ ,421 Total assets 2,442 3,685 3,159 2,926 2,774 Long-term debt 896 1,555 1,111 950 803 Total debt 920 1,609 1,190 1,031 879 Common shareholders’ equity 508 1,081 1,052 1,001 1,009 Annual cash dividends per common share .40 .40 .40 .40 .40 Capital additions 90 212 174 164 259 Depreciation and amortization 124 120 106 90 72 37
  • 34. Dole Food Company, Inc. D O IRECTORS AND FFICERS DOLE FOOD COMPANY DOLE FOOD COMPANY, INC. DOLE FOOD COMPANY, INC. Directors Officers Operating Division Officers Elaine L. Chao2 David H. Murdock Paul Cuyegkeng President & CEO Chairman of the Board and President–Dole Asia United Way of America Chief Executive Officer William F. Feeney Mike Curb David A. DeLorenzo President–Dole Europe Chairman1,3 President & Chief Operating Officer Curb Communications, Inc. Benjamin Paz (entertainment) Gerald W. LaFleur President–Dole Latin America Executive Vice President David A. DeLorenzo Peter M. Nolan President & Chief Operating Officer George R. Horne President–Dole Packaged Foods Dole Food Company, Inc. Vice President–Human Resources Lawrence A. Kern James F. Gary1,2,3 Michael S. Karsner President–Dole Fresh Vegetables Vice President–Chief Financial Officer Chairman Emeritus and Treasurer Gregory L. Costley Pacific Resources, Inc. President–Dole North America Fruit (international energy and Patricia A. McKay holding company) Vice President–Finance and Controller Roberto Zacarias President–Dole Honduran Beverage Richard M. Ferry3 Patrick A. Nielson President and Director Vice President–International Legal and Korn/Ferry International, Inc. Regulatory Affairs (international executive search firm) Thomas J. Pernice Frank J. Hata2 Vice President–Public Affairs Chairman Y. Hata & Co. J. Brett Tibbitts (wholesale food business) Vice President–Corporate General President Counsel and Corporate Secretary Diversified Distributor, Inc. (public warehouse company) Roberta Wieman Vice President David H. Murdock1 Chairman of the Board and Chief Executive Officer Dole Food Company, Inc. Executive, Finance and Nominating Committee 1 Audit Committee 2 Compensation and Employee Benefits Committee 3 38
  • 35. Dole Food Company, Inc. C S I OMPANY AND HAREHOLDER NFORMATION THE COMPANY SHAREHOLDER INQUIRIES Founded in Hawaii in 1851, Dole Food Shareholders and members of the Company, Inc. is the world’s largest investment industry should direct producer and marketer of fresh fruits inquiries to: and vegetables, and markets a growing Office of the Corporate Secretary line of packaged foods. The Company Dole Food Company, Inc. does business in more than 90 coun- 31365 Oak Crest Drive tries and employs approximately Westlake Village, CA 91361 43,000 full-time people worldwide. (818) 879-6600 CORPORATE HEADQUARTERS FORM 10-K 31365 Oak Crest Drive A copy of Dole Food Company, Inc.’s Westlake Village, CA 91361 Form 10-K, a corporate operational (818) 879-6600 and financial report filed annually with the Securities and Exchange AUDITORS Commission, is available upon request Arthur Andersen LLP without charge. 633 West Fifth Street Los Angeles, CA 90071 STOCK EXCHANGE Dole Food Company, Inc.’s common SECURITIES TRANSFER AGENT stock (DOL) is traded on the New York The First National Bank of Boston and Pacific Stock Exchanges. P.O. Box 644 Boston, MA 02102 INTERNET ADDRESS (800) 733-5001 http:www.dole5aday.com Dole® is a registered trademark of Dole Food Company, Inc. © 1996 Dole Food Company, Inc. All rights reserved.
  • 36. DOLE FOOD COMPANY, INC. 31365 Oak Crest Drive, Westlake Village, California 91361

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