DOLE FOOD COMPANY, INC.
31355 Oak Crest Drive
Westlake Village, California 91361
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dole food div95a

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dole food div95a

  1. 1. DOLE FOOD COMPANY, INC. 31355 Oak Crest Drive Westlake Village, California 91361 January 8, 1996 IMPORTANT TAX INFORMATION REGARDING THE DISTRIBUTION OF CASTLE & COOKE, INC. SHARES The purpose of this notice is to provide important information on how to determine your tax basis in the shares of Castle & Cooke, Inc. (ÒCastleÓ) you received in the December 28, 1995 distribution (ÒDistributionÓ) and the effect of the Distribution on the tax basis of your Dole Food Company, Inc. (ÒDoleÓ) common stock. The discussion below is based on DoleÕs determination that it did not have current earnings and profits for 1995 or accumulated earnings and profits as of the date of the Distribution. If that determination is subsequently proven to be incorrect, then you should refer to the Information Statement dated December 15, 1995 for the tax treatment of the Distribution. Generally, you will not be required to recognize gain or loss for federal income tax purposes with respect to the shares of Castle common stock you received in the Distribution. There are two exceptions to this general rule: 1) You will have gain to the extent the fair market value of the Castle common stock exceeds y our tax basis in your Dole common stock. 2) You will recognize a very slight amount of gain if you were allocated a fractional Castle share (see ÒFractional ShareÓ below). The following is intended to help you determine the tax basis of your Dole and Castle shares as a result of the Distribution. The tax basis is important because you will use it to measure the amount of taxable gain or loss 1) if you sell your Dole or Castle shares and 2) with respect to any cash you receive on account of any fractional Castle share. Shareholders should consult their own tax advisors with respect to their particular circumstances and with respect to the effects of any state, local or foreign tax laws to which they may be subject. Tax Basis of Castle Shares Your tax basis in the Castle shares is the fair market value of the shares on the date of the Distribution. Dole believes the fair market value of the Castle shares on the date of Distribution is $15.65 per share, and such value will be used by Dole for Internal Revenue Service information reporting purposes. Fractional Share You have received one-third (.3333) of a Castle share for each Dole share you owned. The number .3333 as applied to your Dole shares is called the ÒDistribution Ratio.Ó The Distribution Ratio will result in the allocation of a .3333 or a .6667 fractional Castle share to many shareholders. Fractional shares were aggregated and sold the public market by The First National Bank of Boston (the ÒDistribution AgentÓ) and the aggregate net cash proceeds were distributed ratably to those shareholders entitled to fractional interests. If you were allocated a .3333 or a .6667 fractional Castle share, you received in lieu thereof a cash payment of $5.26 or $10.51, respectively, which represented the actual weighted average selling price of the fractional Castle shares. Since the tax basis of the Castle shares is $15.65 per whole share, you will recognize short-term capital gain of $.04 ($5.26 - $5.22) with respect to the .3333 fractional Castle share and short-term capital gain of $.08 ($10.51 - $10.43) with respect to the .6667 fractional Castle share. Reduction of Tax Basis in Dole Shares Your tax basis in each Dole share must be reduced by $5.22 ($15.65 ¸ 3) to reflect the fair market value of the Castle shares received. Holding Period For federal tax purposes the holding period for your Castle shares begins on the date of the Distribution. The holding period is important because it is used to determine whether the gain or loss on the eventual sale of your Castle shares is long-term or short-term capital gain or loss (assuming your shares are treated as capital assets).

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