D o l e F o o d C o m pa n y, I n c .
          A n n u a l R e p o r t 
DOLE FOOD COMPANY’S worldwide team of growers,

              packers,processors,shippers and employees

              is ...
F                                                H
    INANCIAL                                          IGHLIGHTS

(in m...
T             O                   S
     O              UR                  HAREHOLDERS

Dole celebrated its 145th anni...
logistical consolidation as well as closer relationships with customers in these coun-
To increase shareholder value, Dole also announced a program providing for the
   repurchase of up to five percent of its ...
D                 W                                                    O
    OLE               ORLDWIDE                   ...

                                         North America
Dole North America generated $1.8 billion of 1996 revenue of ...
Innovative in-field harvest-          designed for the consumer who wants a healthy, quick lunch. Dole Lunch For One
ing a...
Fresh fruit is sourced from                                                            Dole continues to enjoy strong mark...

                                                   P a g e 
           d o l e f o o d c o m p...

                                          Latin America
 Dole Latin America production and exports grew to 137.5 mil...

                                                    Pa g e 
            d o l e f o o...
Fresh bananas arriving              menced in 1995. Today, Dole is the dominant brand sold in Russia with deliveries

 Dole Asia continued its rapid expansion, with sales reaching $974 mi...
Dole’s pineapple cannery            ripening rooms, pineapple peeling centers and fresh produce repacking facilities
in th...

Dole Europe reported record sales of $1 billion in 1996.This was ach...
Strategic acquisitions and                            Europe. Additionally, Pascual provides Dole with the production base...
D             F                 P                      W                             :
    OLE           OOD              ...
F                                                  H
    INANCIAL                                            IGHLIGHTS

C                                          S                       I
    ONSOLIDATED                                   TAT...
C                                                 B            S
     ONSOLIDATED                                      ALA...
Dole 1996 annual
Dole 1996 annual
Dole 1996 annual
Dole 1996 annual
Dole 1996 annual
Dole 1996 annual
Dole 1996 annual
Dole 1996 annual
Dole 1996 annual
Dole 1996 annual
Dole 1996 annual
Dole 1996 annual
Dole 1996 annual
Dole 1996 annual
Dole 1996 annual
Dole 1996 annual
Dole 1996 annual
Dole 1996 annual
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Dole 1996 annual

  1. 1. D o l e F o o d C o m pa n y, I n c . A n n u a l R e p o r t 
  2. 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 to quality is a commitment solidly backed by: scientific pest management programs, strin- gent quality control measures, state-of-the-art production and transportation technologies, continuous improvement through research and innovation, dedication to the safety of our employees, and communities and the environment.
  3. 3. F H INANCIAL IGHLIGHTS (in millions, except per share data) 1996 1995 1994 1993 1992 Revenue $3,840 $3,804 $3,499 $3,108 $3,120 Income from continuing operations before cumulative effect of accounting change $ 89 $ ,120 $ , 58 $ 62 $ 66 Discontinued operations – (97) 10 16 (2) Cumulative effect of accounting change – – – – (48) Net income $ 89 $ 23 $ 68 $ 78 $ 16 Earnings per common share Income from continuing operations before cumulative effect of accounting change $ 1.47 $ 2.00 $ .98 $ 1.04 $ 1.11 Discontinued operations – (1.61) .16 .26 (.04) Cumulative effect of accounting change – – – – (.81) Net income $ 1.47 $ .39 $ 1.14 $ 1.30 $ .26 Average common shares outstanding 60 60 60 60 60 Total assets $2,487 $2,442 $3,685 $3,159 $2,926 Capitalization Short-term debt $ 22 $ ,24 $ , 54 $ , 79 $ , 81 Long-term debt 904 896 1,555 1,111 950 Minority interests 30 26 25 39 35 Common shareholders’ equity 550 508 1,081 1,052 1,001 Total $1,506 $1,454 $2,715 $2,281 $2,067 Book value per common share $ 9.18 $ 8.49 $18.17 $17.70 $16.85 Common stock price at year-end $34.00 $35.00 $23.00 $26.75 $32.13 Market price range High $ 431⁄2 $ 38 $ 351⁄2 $ 377⁄8 $ 40 Low $ 327⁄8 $ 24 $ 221⁄2 $ 257⁄8 $ 26 Annual cash dividends per common share $ .40 $ .40 $ .40 $ .40 $ .40 Note: Income from continuing operations for 1996, 1993 and 1992 includes pre-tax restructuring charges of $50 million, $43 million and $42 million, respectively. Income from continuing operations for 1995 includes a pre-tax gain of $62 million related to assets sold or held for sale. The real estate and resorts business distributed to shareholders in 1995 has been presented throughout this report as discontinued operations. 24.6% 3,840 1,081 3,804 1,052 214 1,001 3,499 193 3,120 3,108 175 166 16.0% 138 550 508 7.6% 6.5% 6.4% 92 93 94 95 96 92 93 94 95 96 92 93 94 95 96 92 93 94 95 96 REVENUE O P E R AT I N G I N C O M E COMMON SHAREHOLDERS’ RETURN EQUITY ON EQUITY (in millions) (in millions) (in percent) (in millions) Page  d o l e f o o d c o m pa n y, i n c .
  4. 4. T O S O UR HAREHOLDERS Dole celebrated its 145th anniversary in 1996 with a revitalized spirit and direction. Following the spin-off of its extensive real estate assets to shareholders in December of 1995, Dole has singularly focused on building its global food business into one of the premier food companies of the world. Dole concentrated on creating shareholder value by focusing management efforts on increasing the return on assets employed.These efforts included: Accelerating the growth of its core businesses where Dole has definite competen- s cies, competitive advantages, and high existing returns. Leveraging its global shipping and distribution infrastructure to carry more prod- s ucts with marginal incremental costs. Joint venturing with partners to mutually benefit from the synergies of combined s strengths. Downsizing or liquidating operations that do not meet minimum return on s investment criteria. Selling assets that are either nonproductive or do not produce adequate returns. s Concurrently, Dole has shifted its management emphasis from the supply side to the market side of the business, in order to differentiate itself and meet the unique requirements of retail chains and consumers in the various regions of the world served by Dole. The sum total of these efforts positions Dole to grow its businesses profitably into the future, reduce debt, and generate cash flow to be used for the further expansion of Dole. Dole took a number of steps to grow its core businesses in 1996. E X PA N S I O N Early in the year, Dole acquired Pascual Hermanos, the largest fruit and vegetable grower in Spain. Pascual is the largest supplier of iceberg lettuce to the European continent and, therefore, a strategic acquisition to position Dole to expand its suc- cessful North American salad business into Europe. Dole also entered into a joint venture in Norway with the BAMA Group to build its first European salad plant for the Norwegian market. This plant was built and entered into production in 1996, and Dole salads quickly gained the leading market share in Norway. During the year, Dole also continued the strategic expansion of its distribution net- works in Europe and Japan. Dole distribution centers now carry an increasing per- centage of Dole’s total sales in Europe and Japan and offer strategic advantages for Page  d o l e f o o d c o m pa n y, i n c .
  5. 5. logistical consolidation as well as closer relationships with customers in these coun- tries. In December of 1996, Dole completed construction and inaugurated its largest distribution facility in Tokyo, Japan. As the retail industry continues to consolidate, Dole’s distribution centers, category management efforts, and supply partnerships continue to strengthen the Dole market position globally. To leverage its infrastructure and create additional synergies, Dole entered into a joint venture marketing program with the prestigious Langeberg Foods of South Africa to market its supply of canned deciduous fruit in Europe that uniquely complement Dole’s canned pineapple sales on the continent and in the United Kingdom. Dole also completed the acquisition of Fyffes PLC’s Guatemalan operations and entered into a shipping agreement to supply the seller part of its European banana market requirements. This transaction provided an opportunity to expand Dole’s North American operations as well as improve production and shipping economies of scale. While growing its core businesses, Dole is concen- MAXIMIZING RETURNS trating on downsizing or liquidating businesses or assets that have not provided ade- quate returns. Dole continued its program of an orderly liquidation of its North American agricultural lands, and announced in December 1996 the restructuring and liquidation of its dried fruit business in North America. As a result of the significant reduction in debt, Dole entered into a new $600 million five-year revolving credit facility, which replaces its former $1 billion credit facility. Agents in the new facility are Chase Manhattan Bank, Bank of America and Citibank. Board of Directors (Seated – Left to Right) Elaine L. Chao and David H. Murdock (Standing – Left to Right) Richard M. Ferry, Zoltan Merszei, James F. Gary, Mike Curb, David A. DeLorenzo Page  d o l e f o o d c o m pa n y, i n c .
  6. 6. To increase shareholder value, Dole also announced a program providing for the repurchase of up to five percent of its outstanding common shares. Shares will be repurchased from time to time based on prevailing market conditions. NUTRITION E D U C AT I O N Dole proudly produces nutritious, wholesome products that enable consumers to lead a healthier lifestyle. Dedicated to increasing consumer knowledge on the benefits of good nutrition, Dole’s mission is to encour- age people to eat at least five servings of fruits and vegetables a day. Much of Dole’s nutritional educational resources are focused on children. The “5 A Day Adventures,” a nutrition education CD-ROM, teaches children to eat five servings of fruits and vegetables a day and is available free to schools.This interactive tool is now in use in more than 32,000 schools nationwide. Dole is expanding in the area of nutritional education by underwriting a study in collaboration with nutrition experts at University of California, Los Angeles and Mayo Clinic to ascertain and assemble the nutritional values of various foods. In conjunction with this project, Dole is undertaking the compilation of a nutritional encyclopedia to designate proper consumption of fruits, vegetables, grains, nuts and protein. Eventually the information will be disseminated to customers, consumers, and the general public to promote nutritional awareness to create a healthier society. Dole continues to see excellent prospects for growth. The developing markets in Europe, Asia and Latin America, where per capita consumption of bananas and pineapples is still low, offer opportunities for continued market expansion. Introductions of new products, such as Dole’s expanding salad lines and new fruit cups, offer excellent growth potential both domestically and internationally. Joint ventures with supply partners, which leverage shipping and distribution assets, con- tinue to offer Dole attractive possibilities for sound economic growth. I am also very pleased with the depth and experience of our entire management team. Dole has a multi-cultural reservoir of talent which is its most valuable resource. This exceptional workforce enables Dole to successfully grow the Dole brand across the globe. We wish to thank our employees, shareholders and customers for their continued support and confidence. Sincerely, David H. Murdock Chairman and Chief Executive Officer
  7. 7. D W O OLE ORLDWIDE PERATIONS q q qq q q q q q q q qv qvv q qv q q qq q q q q qq s q s v vq q q q qq qv q q sqv q s s vq sq q s 5s q q q q q q q q q s s q q q s q q q q q q q q q s qs q s s q q sq sq sq q s q q ss q q s sq s q sq s ss s s q q q q s s q q q s s s q q s q q s s Sourcing v Ripening/Distribution q q Markets 5 Corporate FOOD OPERATING DIVISIONS AND LOCATIONS FOOD MARKETING DIVISIONS LOCATIONS AND Morocco Nicaragua EUROPE AND Costa Rica EUROPE AND AFRICA Netherlands Belgium Panama Dominican Republic MIDDLE EAST Norway Cameroon Peru Albania Ecuador Oman Canary Islands Venezuela Algeria Guadeloupe Poland France Windward Islands Austria Guatemala Portugal Germany Azerbaijan Honduras ASIA Qatar Ghana Bahrian Jamaica Australia Romania Greece Belarussia Martinique China Russia Italy Belgium Mexico Japan Saudia Arabia Ivory Coast Bosnia Netherlands-Antilles New Zealand Senegal Netherlands Bulgaria Panama Philippines Slovakia Somalia Croatia Peru Thailand Spain South Africa Czech Republic Trinidad & Tobago NORTH AMERICA Sweden Spain Denmark Uruguay Canada Switzerland Tunisia Estonia Venezuela United States Syria Turkey Egypt ASIA Arizona Tunisia United Kingdom Finland Australia California Turkey France LATIN AMERICA AND China Florida Ukraine Germany CARIBBEAN Hong Kong Hawaii United Arab Emirates Greece Argentina Indonesia Washington United Kingdom Hungary Chile Japan Uzbekistan Iceland Colombia Malaysia India LATIN AMERICA Costa Rica New Zealand AND Ireland Dominican Republic Philippines CARIBBEAN Italy Ecuador Singapore Argentina Jordan Guadeloupe South Korea Bahamas Kuwait Guatemala Taiwan Barbados Latvia Honduras Thailand Bermuda Lebanon Jamaica Brazil NORTH AMERICA Lithuania Martinique Chile Canada Luxembourg Mexico Colombia United States Malta Page  d o l e f o o d c o m pa n y, i n c .
  8. 8. Dole North America Dole North America generated $1.8 billion of 1996 revenue of which 28 percent was sourced in Latin America, 16 percent from the Far East and 56 percent from within North America. These operations include the distribution, marketing and sales of bananas sourced in Latin America, deciduous fruit sourced in Chile, and pineapple and canned fruit products sourced in Asia. Also included are citrus, deciduous fruits and vegetables procured locally and sold primarily in the North The complementary winter and summer growing seasons American market. This sourcing diversification provides Dole with a of Monterey, California and year-round supply of a wide array of fruit and vegetable products. Yuma, Arizona offer year- round production for Dole’s value added salad and vegetable business, the The fresh vegetable market in North America is a $25 billion V E G E TA B L E S fastest growing segment in business sourced from a large number of regional suppliers, most of which offer the grocery store today. limited product selection and seasonal supplies. Dole’s strategy is to offer a wide range of products year-round to provide retailers an efficient, dependable source of supply. As the retail food chains continue to consolidate, Dole believes its strategy will attract an increasing percentage of food chains as retailers seek fewer suppliers that consistent- ly offer quality, dependable supply and efficient logistical support.A continuing focus on the marketing and customer service aspects of the business distinguish Dole in the market place and builds long-term, brand based relationships with its customers. Fresh cut salads and packaged vegetable assortments continue to increase market share in North America reaching an estimated eight percent of total vegetable sales in 1996, or $2 billion, a 22 percent increase over 1995. Dole’s growth in the value added market in 1996 exceeded the overall market growth. Dole continued to be a leader in fresh cut salads by pioneering an entirely new fresh cut segment, the single David H. Murdock Chairman and Chief Executive Officer serve salads. Dole Lunch For One, introduced to supermarkets in early 1996, David A. DeLorenzo includes a single portion, complete salad and bread accompaniment.The product is President and Chief Operating Officer Page  d o l e f o o d c o m pa n y, i n c .
  9. 9. F RE S H year-round
  10. 10. A D VA N C E D technology
  11. 11. Innovative in-field harvest- designed for the consumer who wants a healthy, quick lunch. Dole Lunch For One ing and state-of-the-art is the top selling single serve salad and consumers confirm it as the most nutritious, packing plants satisfy convenient and the best value on the market today. rapidly growing consumer demand for convenient sal- Dole’s distribution system and customer service continue to expand and improve. ads and vegetables. More The highly automated cooler in Marina, California affords customers the quickest than 25% of American consumers eat fresh salads and most accurate truck pick-up in the produce industry. In addition to distribut- from a bag. ing products from Soledad, California, Yuma, Arizona and New York City, Dole’s national distribution system was further enhanced in 1996 by distributing products from Bolingbrook, Illinois (a Chicago suburb) and Atlanta, Georgia. To further Dole’s penetration of the Eastern markets, a third state-of-the-art processing plant will be built in Ohio in 1997.When this plant is functional in 1998, it will reduce Dole’s recently developed the response and lead time for buyers in the East to one or two days. Dole contin- fresh cut rack in-store ues to be on the leading edge of providing retailers assistance in managing their busi- merchandising system nesses.A comprehensive category management program has been developed to help allows value added bagged produce to be organized retailers better manage produce inventories and space in the supermarket. As another and displayed prominently service to the retailer, Dole is providing an in-store merchandising system to enable and attractively to consumers. retailers to better organize sections for easier shopping and customer convenience. The fresh fruit division supplies Dole retail customers with a F R E S H F RU I T dependable source of high quality fruit on a year-round basis. Core fruit products — bananas, apples, oranges, grapes, pears, stonefruit, pineapples and specialty items such as melons and kiwis — are those most in demand by consumers. Products are sourced throughout the Americas to ensure that selections are available throughout all the North American seasons. This not only reduces seasonal fluctuation in sales but permits sales personnel to be in contact with retail store buyers year-round maintaining relationships and enhancing customer service capacity. Focusing more on the customer service aspect of the business, Dole is downsizing its investment in agricultural properties. By concentrating resources on processing and distribution, Dole believes it can deliver greater value to both its customers and share- holders. This customer service orientation includes a 100 percent containerized Fresh, sliced, cubed, crushed or chunked, Dole banana delivery capacity, establishing strong long-term relationships with customers, pineapple has been a cross marketing various product offerings and investing in processing technology that worldwide bestseller for permits optimal sorting and storage of products to enable products to retain freshness. decades. Page  d o l e f o o d c o m pa n y, i n c .
  12. 12. Fresh fruit is sourced from Dole continues to enjoy strong market preference for its tra- PA C K A G E D F R U I T California, Florida, Hawaii, ditional canned pineapple products as well as for its tropical fruit salads. Through Washington, and through marketing and packaging innovation, traditional Dole products are enjoying increas- the jet-fresh program in Chile. Dole boasts the ing market share by meeting the specific needs of particular customers.This contin- largest fully integrated uing emphasis on customer service is a key to Dole’s success in growing market citrus organization in share while maintaining good financial returns. North America with pro- duction from over 30,000 Market share for the holiday periods approached near record levels of 50 percent on acres of prime farmland. Dole is also the continent’s both pineapple and juice. Two major consumer promotions in conjunction with leading supplier of table American Hawaiian Cruise Lines at Easter and a joint promotion with Microsoft for grapes. the holiday season generated large displays of canned pineapple, pineapple juice and tropical fruit salad in grocery stores, drug stores and mass merchandisers. Following its successful debut in Europe, Dole Pineapple Chunks and Tropical Fruit Dole apples enjoy a consis- tently high rank in Asia Salads, packaged in clear plastic cups, are presently being test marketed on retail where uniform color, shape shelves in Seattle and Portland.This new method of packaging fresh fruit is designed and crispiness are the to satisfy the consumer’s need for safe, healthy and convenient snacks. Additional critical factors for success. In Hong Kong, Dole fruit items will be added in 1997. controls 15 percent of the apple market. Dole Pizza Tidbits were introduced nationally in 1996 and have become a hit with pizza parlor operators. Processed pineapple continues to have significant growth opportunities in the area of sandwich toppings, salad bars and as an ingredient for Asian cooking.The combination of a strong base business coupled with new prod- ucts drove volume and earnings to historical highs in 1996. Gregory L. Costley, Lawrence A. Kern, Peter M. Nolan President – Dole North America Fruit President – Dole Fresh Vegetables President – Dole Packaged Foods Pa g e  d o l e f o o d c o m pa n y, i n c .
  13. 13. Q UA L I T Y variety P a g e  d o l e f o o d c o m pa n y, i n c .
  14. 14. Dole Latin America Dole Latin America production and exports grew to 137.5 million boxes during 1996, produced in its traditional South and Central American operations as well as in certain Caribbean countries. Bananas, pineapples, grapes, apples, pears, kiwis, stonefruit, mangos and melons are shipped in modern refrigerated vessels not only to North America, Western and Eastern Europe, but also to the Mid- and Far-Eastern markets. Dole supplies its customers Despite very adverse climatic conditions in Central I N C R E A S E D P RO D U C T I O N year-round through its America associated with excessive rainfall in 1996, Dole was able to increase its own extensive sourcing capabili- banana production as well as that from associate growers. More than 21,000 Dole ties in Latin America. Dole’s refrigerated container employees take excellent care of all products produced on company-owned farms, shipping fleet, the world’s constantly striving for higher yields, better quality and lower costs. In countries largest, rapidly delivers where Dole does not control production, it assists independent growers to success- produce to global markets. fully improve productivity and the quality of crops, enabling Dole to maintain the highest standard of the industry in the countries in which it operates. A team of highly skilled agronomists and other technical personnel in each country help to achieve desired results and maintain high standards. Dole programs addressing environmental concerns and worker safety lead the industry in all countries in which it operates. While the total Latin America banana production increased NEW MARKETS approximately 3.5 percent in 1996, Dole’s production and sourcing of bananas was up 10 percent versus 1995.This additional production was principally used to serve new markets, primarily in Eastern Europe. Dole’s ability to remain a low cost producer is a key factor in its success in the sales and marketing of increased banana volumes. Juergen Schumacher President – Dole Latin America North America continues to be Dole’s largest banana market, but remarkable growth Roberto Zacarias has taken place in Russia where a regular shipping program into St. Petersburg com- President – Dole Honduran Beverage Pa g e  d o l e f o o d c o m pa n y, i n c .
  15. 15. WO R L DW I D E distribution Pa g e  d o l e f o o d c o m pa n y, i n c .
  16. 16. P RE M I E R grower
  17. 17. Fresh bananas arriving menced in 1995. Today, Dole is the dominant brand sold in Russia with deliveries directly from the harvest through the Baltic and Black Sea ports. In addition, during 1996 the Chinese sig- field are readied for clean- nificantly increased banana consumption with the support of Dole bananas shipped ing, washing, inspection and grading. Once packed, both from Ecuador and the Philippines. they are shipped in refrig- Dole Chile continued its exports of grapes, apples, erated containers to prevent NUMBER CHILE ONE IN ripening until they reach pears, stonefruit and kiwis at a record pace and remains Chile’s number one exporter market. Dole Latin of fruits. Chile has soil and climate comparable to that of California’s fertile San America sources bananas from a well diversified per- Joaquin Valley enabling it to provide the same quality and variety of fruit that manent sourcing structure Americans have come to expect from North American growers. Located in the transporting bananas from Southern Hemisphere, Chile’s growing season is the exact opposite of the United Colombia, Costa Rica, Ecuador, Guatemala, States. Produced under the same stringent quality controls and regulations, Dole Honduras, Nicaragua, Chilean fruit permits the American consumer to enjoy summer fruit in the winter. Panama, and Venezuela. For 1997, Dole Latin America’s most important commitment is to continue improv- ing fruit quality, customer service and maintain a low cost structure. Production of bananas and other tropical fruits is expected to increase in order to participate in the normal growth of the traditional markets as well as the many opportunities available in the emerging new markets around the world. Dole’s majority-owned beverage HONDURAN BEVERAGE O P E R AT I O N operation in Honduras continues to be a leading supplier of beverages, edible oils and soap products. It is also the largest bottler and distributor of soft drink products in Honduras, which has the highest per capita soft drink consumption in Central America. The beverage operation is exclusively authorized to bottle Coca-Cola®, Sprite® and Canada Dry® in Honduras.The Coca-Cola® brand, which has been bot- tled for over 60 years, currently holds a soft drink market share approximately three times as large as that of its nearest competitor. The beverage operation represents approximately 75 percent of the Honduran soft drink market. Its distribution sys- tem, which includes company-owned routes and independent distributors and depots, allows it to distribute its products throughout the entire country. Chilean grapes, nectarines, peaches, plums, apples, and more, are available from early December through April. P a g e  d o l e f o o d c o m pa n y, i n c .
  18. 18. Dole Asia Dole Asia continued its rapid expansion, with sales reaching $974 million in 1996. Dole Asia produces its own products in the Philippines, Thailand and China, and imports products into the region from its affiliated divisions in the United States and Latin America. Dole’s pineapple opera- In Asia, Dole’s pineapple canneries in the Philippines and P R E M I U M P RO D U C E R tions are located in the Thailand lead the world in productivity, quality, sanitation and dedication to excel- Southern Philippines just lence. Dole Philippines farms 25,000 acres on its plantations where pineapples are above the equator.The fields are situated on the grown and harvested at optimum color and ripeness to provide the best quality, fla- slopes of Mount Matutum vor and handling characteristics for fresh and processed requirements. Dole’s total (7,550 Ft.) where weather quality commitment is shared by its more than 6,000 employees who proudly pro- conditions provide a cool year-round climate, ideal duce, process, label and ship 100 percent of Dole’s high quality canned pineapple to for pineapple production. all of the world’s markets. Adhering to a tradition that started more than 110 years ago, Dole is committed to maintaining the distinct quality of its canned pineapple. Today’s employees are educated, dedicated, and devoted to keeping Dole pineapple Number One in consumer satisfaction in the world. While Japan remains Dole’s largest and most diversified Asian market, increasing demand from Korea,Thailand, China, Singapore, the Philippines, and New Zealand offers strong growth opportunities for the future. Despite a continued weak econo- my in Japan in 1996, Dole products continue to benefit from the increasing demand for imported foods into the Japanese market. In order to facilitate this trend in Japan, Dole has DISTRIBUTION CENTERS created a nationwide infrastructure to efficiently process and distribute its increasing volumes of imported goods. In 1996 Dole inaugurated its largest and most modern facility in Tokyo which completes the first phase of Dole’s distribution network in the major cities of Japan.These facilities allow for the efficient import, handling, pro- cessing, packaging and delivery systems to meet Japanese consumer preferences and Paul Cuyegkeng retailer needs. Today, Dole centers are sprouting up all over Japan, offering banana President – Dole Asia Pa g e  d o l e f o o d c o m pa n y, i n c .
  19. 19. GLOBAL sourcing
  20. 20. L OW C O S T producer
  21. 21. Dole’s pineapple cannery ripening rooms, pineapple peeling centers and fresh produce repacking facilities in the Philippines is one of with operational efficiencies that deliver the lowest cost. In addition, all products the largest fruit canneries offered in this market meet Japanese requirements for premium sized, high quality in the world. Similar canning operations in produce as well as packaged products that meet the taste preference of the Japanese Thailand produce processed consumer. Many products initially developed for the Japanese market are easily and fresh pineapple from adaptable for the North American and European consumer. Dole recently contract- company-owned plantations for shipping worldwide. ed nearly one thousand Japanese farmers to grow fruit and vegetables commencing in the first few months of 1998. To further capitalize on Japan’s growing taste for import- D O L E F RU I T C A F É S ed foods, Dole has opened its first directly owned restaurant, the Dole Fruit Café in the Shibuya district of Tokyo. The southern European resort style cafés feature an upbeat ambiance and will have a varied menu specializing in fresh juices, vegetables and fruits. Targeted to serve young Japanese consumers, the lunch and dinner menus will feature new and unique tropical fruit-accented dishes at reasonable prices. Plans to expand the Dole Cafés include franchises as well as other directly owned Dole stores. The economy of the Philippines experienced a G ROW T H O P P O RT U N I T I E S continued resurgence in 1996 and Dole distribution facilities have grown to keep pace with this market expansion. For years Dole has made significant investments in pineapple, banana and vegetable production in the Philippines. This region is now becoming a major market for its fresh vegetable and processed products, many devel- oped especially for the Philippine consumer. Through its affiliate Quantum Corporation, Dole efficiently distributes packaged foods and select amounts of fresh products throughout the Philippines. Providing nationwide sales, marketing and distribution service, Quantum boasts 100 percent penetration in the supermarket and grocery channels. As trade restraints in China,Taiwan and Korea decrease, these markets offer tremen- dous growth potential as well as many challenges.To ensure success, Dole constantly Dole Japan markets broccoli strives to understand local food and taste preferences, work with local distribution and asparagus produced by operators and build a presence in markets that are both profitable and long lasting. its affiliated divisions in North America and the Philippines. Pa g e  d o l e f o o d c o m pa n y, i n c .
  22. 22. Dole Europe Dole Europe reported record sales of $1 billion in 1996.This was achieved through the expansion of sales in Europe, Ukraine, Russia, Turkey, Syria and additional sales revenue from successful joint ventures with Compagnie Fruitiere in France, Jamaican Producer Fruit Distributors in the United Kingdom, and Canary Islands Banana Producers. Innovative technologies developed in Dole’s canning Dole is one of the leading producers, marketers, F O RWA R D I N T E G R A T I O N operations allow fresh fruit to be packed into a small processors and distributors of high quality fruits and vegetables in Europe. Dole’s plastic cup.This convenient European strategy has been to broaden its fresh fruit business and expand as a sup- snack, already a success plier of processed fruit and vegetables. By growing its forward distribution network, in Europe and Asia, is being test-marketed in Dole is reducing overall distribution costs and developing lasting relationships direct- North America. ly with Europe’s major retail organizations. Until the early 1990’s, Dole imported products solely through Germany and Italy. Now, Dole delivers fresh fruit and veg- etable products through 20 ports throughout Europe to meet the ever increasing demands of this region. Dole’s vast network of distribution centers services these countries with 12 facilities in France, seven in Spain, four in Italy, three in the United Kingdom, and one in Germany, all offering supermarkets a complete array of products. Dole has also established a distribution center near Istanbul, Turkey to service this country’s 60 million consumers. In 1996, Dole completed its acquisition of Pascual Hermanos, Spain, one of S PA I N the largest fruit and vegetable production companies in Europe. Pascual owns or leases over 2,000 hectares of farms, production centers and packing houses. Pascual grows, processes and packs over 90 percent of its vegetable exports which include tomatoes and cherry tomatoes, lettuce, onions, and zucchini. It is also a major packer and marketer of citrus, primarily purchased from independent growers.This acquisi- William F. Feeney President – Dole Europe tion provides Dole with a European source of vegetables and citrus products to fill Andrew J. Biles the demands generated by Dole’s marketing and distribution network throughout Executive Vice President – Dole Europe Page  d o l e f o o d c o m pa n y, i n c .
  23. 23. P RO D U C T innovation
  24. 24. Strategic acquisitions and Europe. Additionally, Pascual provides Dole with the production base to allow joint venture partnerships entrance into the European value-added, prepared fresh salad category. have positioned Dole to expand its successful Agronomically, Spain is the California of Europe.The primary citrus and vegetable North American value production as well as large volume of deciduous products such as grapes, stonefruit added salad business into and exotics grown in Europe come from Spain. Entry into Spain, the fifth largest Europe. European market, broadens Dole’s product line and increases its shelf-space in supermarkets. Additionally, it will ensure year-round availability of Dole products complementing those imported from Chile, Latin America and Florida. Dole also entered into a joint-venture with BAMA Group, Norway’s N O RWA Y largest importer, marketer and distributor of fresh fruit and vegetables, forming Dole-BAMA Fresh Salads. Capitalizing on its valued-added success in North America, Dole Europe applied tested technological and marketing expertise to its Norway joint venture. Incorporating the year-round production capabilities provid- ed by the summers in Norway and the winters in Spain, Dole agricultural experts from California assisted Norwegian farmers with production of specialty salads. Construction of a state-of-the-art facility was initiated in January 1996. Production commenced in July 1996 and the Dole-BAMA Group quickly became an estab- lished market leader in Norway. The success of Dole-BAMA serves as a model for the roll-out of Dole’s value-added salads throughout Europe. In its joint venture with Compagnie Fruitiere, Dole extended its West AFRICA African shipping service and sourcing. In March 1996, the Cameroon shipping and sourcing program was extended to the Ivory Coast and Ghana. Dole golden pineap- ples, which are preferred by European consumers, are now being produced by joint ventures in the Ivory Coast and traveling on Dole vessels to the European market. With its alliance with Langeberg Food Limited of South Africa, Dole extended its product line of deciduous canned fruit to include new single serve plastic cups. The joint venture has provided Dole with products which enhance its marketing programs to European supermarkets, complementing existing canned pineapple and From planting through harvesting, Dole bananas exotic fruit product lines. are carefully nurtured and undergo numerous quality checks on Dole plantations. Page  d o l e f o o d c o m pa n y, i n c .
  25. 25. D F P W : OLE OOD RODUCTS ORLDWIDE DOLE FRESH FRUIT Dromedary Pitted Dates Carton Dole French Special Blend Salad Dole Apples Dromedary Chopped Dates Carton Dole Italian Special Blend Salad Dole Apricots Dole Romaine Special Blend Salad SAMAN Dole Bananas Dole Complete Caesar Salad Guyennoise Prunor Pitted Prunes Dole Cherries Dole Complete Spinach/Bacon Salad Guyennoise Prunor Whole Prunes Dole Clementines Dole Complete Oriental Salad JA Whole Dates Dole Coconuts Dole Complete Sunflower Ranch Salad JA Whole Prunes Dole Cranberries Dole Complete Romano Salad Whole Deglet Nour Dates Dole Grapefruit Dole Complete Caesar Salad Soelia Dried Apricots Dole Grapes with Fat Free Dressing Soelia Dried Figs Dole Honeydew Melon Dole Complete Herb Ranch Salad Soelia Blanched Whole Almonds Dole Kiwi with Fat Free Dressing Soelia Sliced Thin Almonds Dole Lemons Dole Complete Raspberry Romaine Salad Soelia Whole Peanuts Dole Lychees with Fat Free Dressing Soelia Pistachios Dole Mangos Dole Complete Zesty Italian Salad Soelia Pitted Prunes Dole Nectarines with Fat Free Dressing Soelia Whole Prunes Dole Oranges Dole Caesar Lunch For One Dole Papayas Dole Classic Ranch Lunch For One DOLE PACKAGED FOODS Dole Peaches Dole Caesar with Fat Free Dressing Lunch For One Dole Apricots in Juice or Syrup Dole Pears Dole Italian with Fat Free Dressing Lunch For One Dole Apricot Halves Dole Persimmons Dole Family Salad Dole Apricot Snack Cup Dole Pineapple Dole Provence Salad Dole Fruit Festival Snack Cup Dole Pineapple Fresh-Cut Bags Dole Napoli Salad Dole Guava Halves Dole Plums Dole Spring Mix Special Salad Dole Orange Fruit Jelly Cups Dole Pomegranates Dole Taco-Chips Salad Dole Peach Halves Dole Raspberries Dole Oriental Stir Fry Vegetables Dole Peach Snack Cup Dole Satsumas Dole Wok Stir Fry Vegetables Dole Pear Snack Cup Dole Strawberries Dole Pineapple Chunks in Juice or Syrup DOLE DRIED FRUIT AND NUTS Dole Tangelos Dole Pineapple Snack Cup Dole Blanched Slivered Almonds in Reclosable Bags Dole Tangerines Dole Pineapple Select Fruit Cups in Fruit Juice Dole Blanched Whole Almonds in Reclosable Bags Dole Pineapple Snack Wedges, Easy Open DOLE FRESH VEGETABLES Dole Chopped Natural Almonds in Reclosable Bags Dole Pineapple Tidbits in Juice or Syrup Dole Artichokes Dole Sliced Natural Almonds in Reclosable Bags Dole Crushed Pineapple in Juice or Syrup Dole Asparagus Dole Whole Natural Almonds in Reclosable Bags Dole Pineapple & Peach Cups Dole Bell Peppers Dole Roasted Almonds in Single Serve Bags Dole Pineapple & Papaya Fruit Jelly Cups Dole Broccoli Dole Golden Seedless Raisins Dole Pineapple Juice Dole Brussels Sprouts Dole Seedless Raisins Canister Dole Pineapple Orange Juice Dole Carrots Dole Seedless Raisins Carton Dole Pine-Orange Banana Juice Dole Cauliflower Dole Seedless Raisins Mini Snacks Dole Pine-Orange Guava Juice Dole Celery Dole Seedless Raisins Six Packs Dole Pine-Passion Banana Juice Dole Baby Lettuce Dole Seedless Raisins in Single Serve Bags Dole Pineapple Orange Juice Box Dole Butter Lettuce Dole Seedless Raisins in Reclosable Bags Dole Pineapple Orange Banana Juice Box Dole Green Leaf Lettuce Dole Chopped Dates Canister Dole Pineapple Orange Raspberry Juice Box Dole Iceberg Lettuce Dole Chopped Dates Carton Dole Pineapple Juice Drink Dole Red Batavia Lettuce Dole Pitted Dates Canister Dole Pineapple Grapefruit Juice Dole Red Butter Lettuce Dole Pitted Dates Carton Dole Pineapple Pink Grapefruit Drink Dole Red Leaf Lettuce Dole Chopped Dates Cup Dole Pineapple Lychee Juice Drink Dole Romaine Lettuce Dole Pitted Dates Cup Dole Pineapple Orange Juice Drink Dole Green Onions Dole Whole Dates Cup Dole Pineapple Strawberry Juice Drink Dole Spring Onions Dole Pitted Dates Gelatin Mold Cup Dole Pineapple Slices in Juice or Syrup Dole Sugar Peas Dole Medjool Dates Dole Mandarin Orange Segments Dole Idaho Potatoes Dole Date Nut Roll Dole Mandarin Orange Fruit Cups Dole Radishes Dole Baking Dates Dole Papaya in Syrup Dole Cherry Tomatoes Dole California Style Trail Mix in Single Serve Bags Dole Yellow Papaya Chunks Dole Tomatoes Dole Hawaiian Style Trail Mix in Single Serve Bags Dole Red Papaya Chunks in Light Syrup Dole Zucchini Squash Dole Breakfast Prunes in Reclosable Bags Dole Pears in Juice and Syrup Dole Large Prunes in Reclosable Bags DOLE FRESH-CUT VEGETABLES Dole Peaches in Juice and Syrup Dole Pitted Prunes Canister Dole Peeled-Mini Carrots Dole Deciduous Fruit Cocktail in Juice Dole Pitted Prunes Carton Dole Shredded Carrots and Syrup Dole Pitted Prunes in Reclosable Bags Dole Cole Slaw Dole Select Fruit Tropical Fruit Cups Dole Pistachio Kernels in Single Serve Bags Dole Shredded Lettuce in Fruit Juice Dole Shredded Red Cabbage DROMEDARY Dole Tropical Fruit Salad Dromedary Pitted Dates Bag Dole Classic Iceberg Salad Dole Tropical Fruit Salad, Easy Open Dromedary Chopped Dates Bag Dole American Special Blend Salad Dromedary Morsel Date Bag Dole European Special Blend Salad Pa g e  d o l e f o o d c o m pa n y, i n c .
  26. 26. F H INANCIAL IGHLIGHTS R E V E N U E G RO W T H REGION, 1986 1996 BY TO Europe Europe $873 22% North America North 30% America Europe $641 40% Asia $562 Asia 13% North Latin America Latin America America Latin 5% 4% 4% America Asia $90 26% G ROW T H BY REGION P E R C E N T O F TOTA L C O M P O U N D E D A N N UA L G ROW T H B Y R E G I O N G ROW T H R AT E B Y R E G I O N (in millions) 3,840 1,563 3,804 325 3,499 306 3,120 3,108 272 265 258 1,155 995 891 847 92 93 94 95 96 92 93 94 95 96 92 93 94 95 96 REVENUE G RO S S O P E R AT I N G NET DEBT C A S H F L OW (in millions) (in millions) (in millions) s Depreciation & Amortization (EBITDA) s Operating Income (EBIT) (a) Before restructuring charge Page  d o l e f o o d c o m pa n y, i n c .
  27. 27. C S I ONSOLIDATED TATEMENTS OF NCOME (in thousands, except per share data) 1996 1995 1994 Revenue $3,840,303 $3,803,846 $3,498,553 Cost of products sold 3,256,345 3,217,869 2,965,675 Gross margin 583,958 585,977 532,878 Selling, marketing and administrative expenses 369,675 392,694 394,763 Restructuring charge 50,000 – – Operating income 164,283 193,283 138,115 Interest expense (68,699) (81,186) (76,911) Interest income 8,412 7,501 9,884 Net gain on assets sold or held for disposal – 61,655 – Other income (expense) – net 4,535 (5,429) (2,943) Income from continuing operations before income taxes 108,531 175,824 68,145 Income taxes (19,500) (56,000) (9,900) Income from continuing operations 89,031 119,824 58,245 Income (loss) from discontinued operations, net of income taxes – (96,493) 9,638 Net income $ 89,031 $ 23,331 $ 67,883 Earnings (loss) per common share, primary and fully diluted Continuing operations $ 1.47 $ 2.00 $ .98 Discontinued operations – (1.61) .16 Net income $ 1.47 $ .39 $ 1.14 See Notes to Consolidated Financial Statements. Page  d o l e f o o d c o m pa n y, i n c .
  28. 28. C B S ONSOLIDATED ALANCE HEETS (in thousands) 1996 1995 Current assets Cash and short-term investments $ 34,342 $ 72,151 Receivables – net 518,266 462,303 Inventories 526,052 559,660 Prepaid expenses 47,164 43,087 Total current assets 1,125,824 1,137,201 Investments 72,930 63,319 Property, plant and equipment – net 1,024,135 1,016,991 Long-term receivables – net 69,861 28,409 Other assets 194,057 196,272 $2,486,807 $2,442,192 Current liabilities Notes payable $ 20,478 $ 21,778 Current portion of long-term debt 1,497 1,779 Accounts payable 185,747 182,152 Accrued liabilities 454,208 451,181 Total current liabilities 661,930 656,890 Long-term debt 903,807 895,998 Deferred income taxes and other long-term liabilities 341,798 354,545 Minority interests 29,712 26,324 Commitments and contingencies Common shareholders’ equity 549,560 508,435 $2,486,807 $2,442,192 See Notes to Consolidated Financial Statements. Page  d o l e f o o d c o m pa n y, i n c .