Cincinnati, Feb. 19, 2009 - Chiquita Brands International, Inc. (NYSE: CQB) today released financial and operating results for the fourth quarter and full-year 2008.
- Comparable full-year 2008 income from continuing operations improved $56 million despite recessionary environment
- Q4 includes non-cash goodwill impairment charge of $375 million at Fresh Express
- Comparable 2008 full-year EPS of $1.12; Reported EPS of $(7.43), including charges
- Expect to improve full-year net income and EPS in 2009 on a comparable basis
For the full year, net sales increased by 4 percent to $3.6 billion, and the company reported a loss from continuing operations of $325 million, or $(7.43) per diluted share, versus a loss of $46 million, or $(1.14) per diluted share, in 2007. On a comparable basis, the company reported income from continuing operations of $49 million, or $1.12 per diluted share, versus a loss of $7 million, or $(0.23) per diluted share, in 2007. The comparable basis amounts exclude certain items affecting comparability, including a non-cash goodwill impairment charge taken in the fourth quarter of $375 million, or $(8.58) per diluted share, for Fresh Express, as further described below under "Items affecting comparability."
For the fourth quarter, net sales were flat year-over-year at $839 million, and the company reported a loss from continuing operations of $411 million, or $(9.27) per diluted share, versus a loss of $23 million, or $(0.59) in the fourth quarter of 2007. On a comparable basis, the loss from continuing operations for the quarter was $33 million, or $(0.74) per diluted share, versus income of $3 million, or $0.02 per diluted share, in 2007.
"We overcame unprecedented cost challenges in 2008 and significantly improved comparable full-year results versus 2007," said Fernando Aguirre, chairman and chief executive officer. "We sold non-strategic assets, strengthened our financial position, reduced controllable costs, extended our geographic growth and continued positioning the company for long-term success."
Mr. Aguirre added, "Our fourth quarter results were lower year-over-year due to higher costs including flood impacts, a weaker euro, and lower performance in salads. We took a non-cash goodwill impairment charge for Fresh Express in the fourth quarter, primarily due to current economic conditions and lower category growth expectations. Although the economic environment is uncertain, we expect to improve full-year results in 2009 on a comparable basis. We believe we have the right products and strategy to leverage global health and wellness trends and are executing our profit improvement plans in salads, maintaining our focus on profitability in bananas, and innovating toward higher-margin products."
2008 FULL-YEAR SUMMARY
(The following table shows adjustments made in "Income (loss) from continuing operations" and EPS from continuing operations between comparable and GAAP results presentation. See "Items affecting comparability" below for description of items excluded on a comparable basis, including descriptions of how these items affect the results of reportable segments. Exhibit B provides a similar reconciliation by segment of "Operating income (loss).")
Income (loss) From Diluted EPS From
Continuing Continuing
Operations Operations(1)
FY 2008 FY 2007 FY 2008 FY 2007
Comparable results (Non-GAAP) $48.6 $(6.9) $1.12 $(0.23)
Asset impairments (374.5) - (8.56) -
Restructuring costs (6.9) (25.9) (0.16) (0.61)
Loss on divestitures - (10.0) - (0.24)
Other items 7.6 (2.9) 0.17 (0.06)
Reported results (GAAP) $(325.2) $(45.7) $(7.43) $(1.14)
(1) Shares used for diluted EPS calculation are on an as reported basis.
Net Sales: Annual sales increased 4 percent year-over-year to $3.6 billion, as a result of higher banana pricing in each of the company's markets and favorable average exchange rates, partially offset by lower banana volumes in core European markets.
Comparable Results: Comparable income from continuing operations results for the full-year 2008 improved by $56 million, to $49 million, due to higher global banana pricing, favorable average exchange rates and savings from the company's 2007 business restructuring, partially offset by higher sourcing costs in the banana segment and declines in the salads and healthy snacks operations.
Cash, Debt and Liquidity: At December 31, 2008, the company had $77 million in cash and $129 million of borrowing capacity under a five-year revolving credit facility with a syndicate of commercial banks. Debt at year-end 2008 was $777 million, reflecting the third straight year of debt reduction. The company has a solid capital structure and no more than $20 million in debt maturities in any year until 2014. The non-cash goodwill impairment charge in the fourth quarter of 2008 has no effect on the company's liquidity, covenant compliance, or borrowing capacity.
Banana Segment: Net sales for the segment increased 12 percent to $2.1 billion, principally as a result of improved pricing in bananas and higher average euro exchange rates. On a comparable basis, operating income improved 65 percent to $184 million, compared to $112 million in 2007, due to pricing and euro exchange rates that more than offset higher sourcing and logistics costs and lower volume in the company's core European markets.
Salads and Healthy Snacks Segment: Net sales increased 2 percent to $1.3 billion primarily due to higher pricing, including fuel surcharges, in retail salads and foodservice. On a comparable basis, operating loss was $25 million, versus income of $13 million in 2007, due to higher fuel and raw product costs, network inefficiencies during the consolidation of processing and distribution centers, increased investment in new products including the successful expansion of Just Fruit in a Bottle in Europe and single-serve Gourmet Cafe salads. The total operating losses invested in the start-up and expansion of Just Fruit in a Bottle in Europe was $26 million for the year.
Other Produce: Net sales decreased 31 percent to $244 million due primarily to the elimination of both local sales from previously owned operations in Chile and lower-margin sales of Mexican-sourced vegetables. On a comparable basis, operating income was $10 million, versus $5 million in 2007.
FOURTH QUARTER 2008 RESULTS
(The following table shows adjustments made in "Income (loss) from continuing operations" and EPS from continuing operations between comparable and GAAP results presentation. See "Items affecting comparability" below for description of items excluded on a comparable basis, including descriptions of how these items affect the results of reportable segments. Exhibit B provides a similar reconciliation by segment of "Operating income (loss).")
Income (loss) From Diluted EPS
Continuing From Continuing
Operations Operations(1)
Q4 2008 Q4 2007 Q4 2008 Q4 2007
Comparable results
(Non-GAAP) $(32.8) $3.4 $(0.74) $0.02
Asset impairments (374.5) - (8.44) -
Restructuring costs (5.2) (25.9) (0.12) (0.61)
Other items 1.4 - 0.03 -
Reported results (GAAP) $(411.1) $(22.5) $(9.27) $(0.59)
(1) Shares used for diluted EPS calculation are on an as reported basis.
Net Sales: Net sales were flat at $839 million as higher local banana prices were offset by weaker euro exchange rates, a unit volume decline in retail and foodservice salads sales, and the elimination of both non-Chiquita sales in Chile and lower-margin sales of Mexican vegetables in the Other Produce segment.
Comparable Results: On a comparable basis, the results from continuing operations for the quarter swung to a loss of $33 million from income of $3 million in the year-ago quarter due to higher banana production and logistics costs (including flood-related costs), lower average euro exchange rates and lower volumes in Salads and Healthy Snacks, partially offset by higher banana pricing in North America and savings from the company's 2007 business restructuring.
Banana Segment: Net sales for the segment increased 9 percent to $496 million principally as a result of improved pricing in North America, which more than offset the impact of lower average euro exchange rates (outlined in Exhibit E). Comparable operating income was $13 million versus $32 million in the year-ago period. The decrease was due to higher product sourcing costs including the impact of flooding in Panama and Costa Rica and lower average euro exchange rates. Flooding impacted the fourth quarter by approximately $8 million in higher costs, and is expected to have an incremental impact of close to $30 million in 2009 due to the costs to source and ship replacement volume.
Salads and Healthy Snacks Segment: Net sales decreased 10 percent to $295 million, mostly due to lower volumes, which were partly offset by higher pricing and fuel surcharges. Foodservice volume decreased 25 percent as the company elected not to renew certain foodservice contracts with customers unwilling to accept price increases, and retail value-added salads volumes declined 4 percent, roughly in line with category performance. Comparable operating loss was $14 million, compared to a loss of $2 million in the year-ago period, due to higher brand development, marketing and innovation spending in North American salads (such as the expansion of innovative products), increases in raw product costs in salad operations, and increased investment in the successful expansion of Just Fruit in a Bottle in Europe. The operating losses invested in the start-up of Just Fruit in a Bottle in Europe were $8 million for the fourth quarter of 2008.
Other Produce: Net sales decreased 17 percent to $48 million due primarily to a decline in lower-margin sales of Mexican vegetables. Comparable operating income was $2 million compared to breakeven in the year-ago period.
2009 OUTLOOK
While the company will continue to face challenges in 2009, particularly given uncertainty in the global economic environment, management expects to deliver improved full-year results in 2009, on a comparable basis, through both profit-improvement strategies and cost reduction initiatives. The company intends to continue to use free cash flow primarily for debt reduction.
In the Banana segment, the overall supply and demand balance from Latin America remains relatively favorable and consumer demand remains stable. Banana sourcing and production costs are expected to increase in 2009 compared to 2008 due to purchased fruit contract pricing, government-imposed exit prices, and close to $30 million of incremental sourcing and logistics costs from flooding that occurred late in 2008 in Costa Rica and Panama. Reductions in fuel-related costs are expected to be partly offset by fuel hedging results, which would generate a loss in 2009 at current market forward rates compared to a gain in 2008. Banana pricing is expected to be relatively stable in North America, despite a significant decline in the amount of fuel-related surcharges. Local European banana pricing is less certain due in part to higher first-half volumes from the French West Indies compared to the post-Hurricane Dean-period a year ago, and the expected lower value of the euro, which averaged $1.47/euro in 2008, and for which the company is approximately 75 percent hedged at $1.39/euro in 2009, compared to a current spot rate of approximately $1.27/euro.
In the Salads and Healthy Snacks segment, the company expects to generate improved results in 2009, on a comparable basis, in both salads and healthy snacks. The profit-improvement strategies in salads focus on increasing pricing, eliminating unprofitable contracts and products, modifying pricing to recover fuel-related cost increases, improving the efficiency of its manufacturing and distribution network, and improving merchandising. As part of these initiatives, the company elected not to renew certain foodservice contracts with customers unwilling to accept certain price increases; and, as a result, the company expects that its foodservice volume could decline by as much as 50 percent in 2009. In healthy snacks, the company expects as much as $10 million in lower operating losses from the start-up of Just Fruit in a Bottle in Europe, in keeping with the target for individual markets to reach breakeven by the end of their third year after market launch.
In addition to the company's overall business outlook, the following chart summarizes management's estimates of certain key items for 2009:
FY 2008 FY 2009
(in millions) Actual Estimate
Capital Expenditures $63 $55-65
Depreciation & Amortization $73 $65-69
Gross Interest Expense (1,2) $67 $58-62
Net Interest Expense (1,2) $60 $52-56
(1) 2008 excludes $9 million for the write-off of deferred financing
fees related to the refinancing of the company's credit facility
in the first quarter.
(2) 2009 excludes $7 million of non-cash interest expense due to the
adoption of FASB Staff Position No. APB 14-1, "Accounting for
Convertible Debt Instruments That May Be Settled in Cash upon
Conversion (including partial cash settlement)."
ITEMS AFFECTING COMPARABILITY
(See Exhibit B for Reconciliation of GAAP and Non-GAAP Operating Information)
2008 Items
Asset Impairments: The non-cash Fresh Express goodwill impairment charge of $375 million in the fourth quarter is the result of the company's 2008 impairment analysis in accordance with SFAS No. 142, "Goodwill and Other Intangible Assets." The impairment is included in reported figures for the Salads and Healthy Snacks segment and had an income tax benefit of approximately $1 million. The impairment does not have any impact on the company's liquidity, covenant compliance, or borrowing capacity.
Restructuring Costs: In the fourth quarter, the company committed to relocate its European headquarters from Belgium to Switzerland, in order to optimize the company's long-term tax structure. The relocation is expected to be completed in mid-2009. The company expects to incur one-time costs related to this relocation in the range of $19-23 million, of which $5 million was recognized in the fourth quarter of 2008 and $2 million in earlier periods, with most of the remainder expected in the first half of 2009. Restructuring costs are included in reportable figures as a component of operating income, but are not allocated to the reportable segments.
Other Items: Other items in 2008 included a $14 million gain from open-market repurchases of Senior Notes ($10 million in the third quarter and $4 million in the fourth quarter); $8 million of other income, and $3 million in related tax expense, in the second quarter from the resolution of claims and the receipt of refunds of certain non-income taxes paid between 1980 and 1990. These items are included in the reportable figures as other income and income tax expense, which are below operating income; they are not allocated to the reportable segments. Other items also include a $3 million impairment charge in the fourth quarter related to the closure of a UK ripening center, which is included in the reportable figures for the Banana segment, and $9 million of deferred financing fee write-offs reported in interest expense in the first quarter as a result of the company's successful refinancing.
2007 Items
Restructuring Costs: A $26 million charge in Q4 from implementation of a business restructuring plan. Restructuring costs are included in reportable figures as a component of operating income, but are not allocated to the reportable segments.
Gain (Loss) on Divestitures: $10 million in charges were incurred related to the exit of the company's Chilean operations ($5 million in the first quarter, $1 million in the second quarter, and $4 million in the third quarter). These charges are included in the reportable figures for the Other Produce segment.
Other Items: A $3 million charge in the second quarter related to the settlement of U.S. antitrust litigation. This charge is not allocated to the reportable segments; it is included in the reportable figures as a Corporate expense.
Exhibit A:
CHIQUITA BRANDS INTERNATIONAL, INC.
CONSOLIDATED INCOME STATEMENT -- FOURTH QUARTER AND FULL YEAR
(Unaudited - in millions, except per share amounts)
Quarter Ended Year Ended
December 31, December 31,
2008 2007 2008 2007
Net sales $839.3 $840.4 $3,609.4 $3,464.8
Operating expenses
Cost of sales 744.4 704.9 3,067.6 2,949.9
Selling,
general and
administrative 105.3 93.7 378.3 374.8
Depreciation 15.3 17.0 62.9 72.4
Amortization 2.5 2.5 9.8 9.8
Equity in
earnings of
investees (3.3) 6.3 (10.3) 0.4
European
headquarters
relocation 5.2 - 6.9 -
Goodwill
impairment 375.3 - 375.3 -
Restructuring - 25.9 - 25.9
1,244.7 850.3 3,890.5 3,433.2
Operating income
(loss) (405.4) (9.9) (281.1) 31.6
Interest income 1.8 1.6 7.1 9.8
Interest expense (15.4) (19.1) (75.8) (86.2)
Other income(1) 4.5 - 22.7 -
Income (loss)
from continuing
operations before
taxes (414.5) (27.4) (327.1) (44.8)
Income tax
benefit
(expense)(2) 3.4 4.9 1.9 (0.9)
Income (loss)
from continuing
operations (411.1) (22.5) (325.2) (45.7)
Income (loss)
from
discontinued
operations(3) (0.8) (3.5) 1.5 (3.3)
Net income
(loss) $(411.9) $(26.0) $(323.7) $(49.0)
Basic earnings per
share:(5)
Continuing
operations $(9.27) $(0.59) $(7.43) $(1.14)
Discontinued
operations (0.01) (0.09) 0.03 (0.08)
$(9.28) $(0.68) $(7.40) $(1.22)
Diluted earnings per
share: (4, 5)
Continuing
operations $(9.27) $(0.59) $(7.43) $(1.14)
Discontinued
operations (0.01) (0.09) 0.03 (0.08)
$(9.28) $(0.68) $(7.40) $(1.22)
Shares used to
calculate basic
earnings per share 44.4 42.6 43.7 42.5
Shares used to
calculate
diluted earnings
per share(4) 44.4 42.6 43.7 42.5
(1) The quarter ended December 31, 2008 includes a net gain of
$4 million, or $0.10 per diluted share, related to open market
repurchases of senior notes. The year ended December 31, 2008
includes a net gain of $14 million, or $0.32 per diluted share,
from the senior notes repurchase program and an $8 million gain
from the favorable resolution of a claim related to a non-income
tax refund. An offsetting $3 million of related tax expense for
the claim resolution is included in "Income tax benefit (expense)"
for the year ended December 31, 2008.
(2) Includes benefits of $5 million and $17 million for the quarter and
year ended December 31, 2008, respectively and $9 million and
$14 million for the quarter and year ended December 31, 2007,
respectively, primarily due to the resolution of tax contingencies
in various jurisdictions and the release of valuation allowance.
(3) Includes the operating results of Atlanta AG and related operations,
as well as the net gain on the sale of Atlanta of less than
$1 million.
(4) Includes any dilutive effect of outstanding warrants and stock
options based on the treasury stock method, and the dilutive
effect of restricted stock awards. For the quarter and year
ended December 31, 2008, the 4.25% convertible senior notes due
2016 did not have a dilutive effect because the average trading
price of the common shares was below the initial conversion price
of $22.45 per share.
(5) Earnings available to common shareholders for the quarter and
year ended December 31, 2007, used to calculate earnings per share,
are reduced by a one-time $2.7 million deemed dividend to a
minority shareholder in a joint venture.
Exhibit B:
CHIQUITA BRANDS INTERNATIONAL, INC.
RECONCILIATION OF GAAP AND NON-GAAP INFORMATION
OPERATING INCOME (LOSS) - FULL YEAR
(Unaudited - in millions)
2008
Reconciliation Salads & Operating
Bananas Healthy Other Corp- Restruc- income
Snacks Produce orate turing (loss)
Comparable
results
(Non-GAAP) $184.2 $(24.5) $10.1 $(65.6) $- $104.2
Asset
impairments - (375.3) - - - (375.3)
Restructuring
costs - - - - (6.9) (6.9)
Loss on
divestitures - - - - - -
Other items (3.1) - - - - (3.1)
Reported results
(U.S. GAAP) $181.1 $(399.8) $10.1 $(65.6) $(6.9) $(281.1)
2007
Reconciliation Salads & Operating
Bananas Healthy Other Corp- Restruc- income
Snacks Produce orate turing (loss)
Comparable
results
(Non-GAAP) $111.9 $13.2 $4.6 $(59.3) $- $70.4
Asset
impairments - - - - - -
Restructuring
costs - - - - (25.9) (25.9)
Loss on
divestitures - - (10.0) - - (10.0)
Other items - - - (2.9) - (2.9)
Reported results
(U.S. GAAP) $111.9 $13.2 $(5.4) $(62.2) $(25.9) $31.6
Exhibit B (continued):
CHIQUITA BRANDS INTERNATIONAL, INC.
RECONCILIATION OF GAAP AND NON-GAAP INFORMATION
OPERATING INCOME (LOSS) - FOURTH QUARTER
(Unaudited - in millions)
Q4 2008
Reconciliation Salads & Operating
Bananas Healthy Other Corp- Restruc- income
Snacks Produce orate turing (loss)
Comparable
results
(Non-GAAP) $12.8 $(13.8) $2.0 $(22.8) $- $(21.8)
Asset
impairments - (375.3) - - - (375.3)
Restructuring
costs - - - - (5.2) (5.2)
Loss on
divestitures - - - - - -
Other items (3.1) - - - - (3.1)
Reported operating
income (loss)
(U.S. GAAP) $9.7 $(389.1) $2.0 $(22.8) $(5.2) $(405.4)
Q4 2007
Reconciliation Salads & Operating
Bananas Healthy Other Corp- Restruc- income
Snacks Produce orate turing (loss)
Comparable
results
(Non-GAAP) $31.9 $(1.6) $(0.1) $(14.2) $- $16.0
Asset
impairments - - - - - -
Restructuring
costs - - - - (25.9) (25.9)
Loss on
divestitures - - - - - -
Other items - - - - - -
Reported operating
income (loss)
(U.S. GAAP) $31.9 $(1.6) $(0.1) $(14.2) $(25.9) $(9.9)
Exhibit C:
CHIQUITA BRANDS INTERNATIONAL, INC.
OPERATING STATISTICS - FULL YEAR
(Unaudited - in millions, except for percentages and exchange rates)
Percent
Change
Year Ended December 31, Favorable
(Unfavorable)
2008 2007 vs. 2007
Net sales by segment
Bananas $2,060.3 $1,833.3 12.4%
Salads and Healthy Snacks 1,305.0 1,277.2 2.2%
Other Produce 244.1 354.3 (31.1)%
Total net sales $3,609.4 $3,464.8 4.2%
Comparable segment operating
income (loss)( 1)
Bananas $184.2 $111.9 64.6%
Salads and Healthy Snacks (24.5) 13.2 N/A
Other Produce 10.1 4.6 119.6%
Corporate (65.6) (59.3) (10.6)%
Total operating
income (loss) $104.2 $70.4 48.0%
Comparable operating margin
by segment
Bananas 8.9% 6.1% 2.8pts
Salads and Healthy Snacks (1.9)% 1.0% (2.9)pts
Other Produce 4.1% 1.3% 2.8pts
SG&A as a percent of sales 10.5% 10.8% 0.3pts
Company banana sales
volume(2)
(40 lb. boxes)
North America 62.2 61.5 1.1%
Core European Markets(3) 49.2 53.4 (7.9)%
Asia and the Middle East (4) 24.2 19.1 26.7%
Trading Markets(5) 6.8 8.8 (22.7)%
Total 142.4 142.8 (0.3)%
Fresh Express retail value-added
salad sales volume
(12-count cases) 66.1 65.6 0.8%
Euro average exchange rate, spot
(dollars per euro) $1.47 $1.37 7.3%
Euro average exchange rate,
hedged (dollars per euro) $1.45 $1.33 9.0%
(1) See detailed description of reconciling items between GAAP and
comparable basis figures in Exhibit B and in the text of the
press release under the heading titled "Items affecting
comparability."
(2) Total volume sold includes all banana varieties, such as
Chiquita-to-Go, Chiquita minis, organic bananas and plantains.
(3) The company's Core European Markets include the 27 member states
of the European Union, Switzerland, Norway and Iceland.
(4) The company primarily operates through joint ventures in this
region, where sales are invoiced mostly in U.S. dollars.
(5) The company's Trading markets are mainly European and
Mediterranean countries that do not belong to the European Union.
Exhibit C (continued):
CHIQUITA BRANDS INTERNATIONAL, INC.
OPERATING STATISTICS - FOURTH QUARTER
(Unaudited - in millions, except for percentages and exchange rates)
Percent
Quarter Ended December 31, Change
Favorable
(Unfavorable)
2008 2007 vs. 2007
Net sales by segment
Bananas $496.0 $455.4 8.9%
Salads and Healthy
Snacks 295.0 326.6 (9.7)%
Other Produce 48.3 58.4 (17.3)%
Total net sales $839.3 $840.4 (0.1)%
Comparable segment
operating income (loss)(1)
Bananas $12.8 $31.9 (59.9)%
Salads and Healthy
Snacks (13.8) (1.6) N/A
Other Produce 2.0 (0.1) N/A
Corporate (22.8) (14.2) (60.6)%
Total operating loss $(21.8) $16.0 N/A
Operating margin by
segment
Bananas 2.6% 7.0% (4.4)pts
Salads and Healthy
Snacks (4.7)% (0.5)% (4.2)pts
Other Produce 4.1% (0.2)% 4.3pts
SG&A as a percent of
sales 12.5% 11.2% (1.3)pts
Company banana sales
volume(2)
(40 lb. boxes)
North America 15.7 14.9 5.4%
European Core
Markets(3) 12.4 12.6 (1.6)%
Asia and the Middle
East (4) 7.1 4.7 51.1%
Trading Markets(5) 2.7 2.3 17.4%
Total 37.9 34.5 9.9%
Fresh Express retail
value-added salad sales
volume
(12-count cases) 15.0 15.6 (3.8)%
Euro average exchange
rate, spot (dollars per
euro) $1.32 $1.44 (8.3)%
Euro average exchange
rate, hedged (dollars
per euro)
$1.35 $1.41 (4.3)%
(1) See detailed description of reconciling items between GAAP and
comparable basis figures in Exhibit B and in the text of the
press release under the heading titled "Items affecting
comparability."
(2) Total volume sold includes all banana varieties, such as
Chiquita-to-Go, Chiquita minis, organic bananas and plantains.
(3) The company's Core European Markets include the 27 member states
of the European Union, Switzerland, Norway and Iceland.
(4) The company primarily operates through joint ventures in this
region, where sales are invoiced mostly in U.S. dollars.
(5) The company's Trading markets are mainly European and
Mediterranean countries that do not belong to the European Union.
Exhibit D:
CHIQUITA AVERAGE BANANA PRICES AND VOLUME
YEAR-OVER-YEAR PERCENTAGE CHANGE - FAVORABLE (UNFAVORABLE)
2008 vs. 2007
(Unaudited)
Pricing Volume
Region Q4 FY Q4 FY
North America(1) 34% 30% 5% 1%
Core European
Markets(2)
U.S. Dollar basis(3) (7)% 14%
Local Currency 1% 5% (2)% (8)%
Asia and the Middle
East(4)
U.S. Dollar basis 22% 14% 51% 27%
Trading Markets
U.S. Dollar basis 7% 18% 17% (23)%
(1) Pricing includes fuel-related and other surcharges. Total
volume sold includes all banana varieties, such as
Chiquita-to-Go, Chiquita minis, organic bananas and plantains.
(2) The company's Core European Markets include the 27 member states
of the European Union, Switzerland, Norway and Iceland.
(3) Prices on a U.S. dollar basis do not include the impact of hedging.
(4) The company primarily operates through joint ventures in this region,
where sales are invoiced mostly in U.S. dollars.
FRESH EXPRESS RETAIL VALUE-ADDED SALADS
NET REVENUE PER CASE AND VOLUME
YEAR-OVER-YEAR PERCENTAGE CHANGE - FAVORABLE (UNFAVORABLE)
2008 vs. 2007
(Unaudited)
Net Revenue
Per Case Volume
Region Q4 FY Q4 FY
North America(1) 6% 5% (4)% 1%
(1) Net revenue per case includes fuel-related surcharges.
Exhibit E:
EUROPEAN CURRENCY
YEAR-OVER-YEAR CHANGE - FAVORABLE (UNFAVORABLE)
2008 vs. 2007
(Unaudited - in millions)
Currency Impact (Euro/Dollar) Q4 FY
Revenue $(20) $81
Local Costs 7 (25)
Hedging(1) 7 10
Balance sheet translation(2) (1) (5)
Net European currency impact $(7) $61
(1) Hedging gains in the fourth quarter 2008 were $4 million compared
to costs of $4 million in the fourth quarter 2007. Hedging costs
for the full year 2008 were $9 million compared to $19 million
for 2007.
(2) Balance sheet translation was a gain of $2 million for the
fourth quarter 2008 and zero for the full year 2008. Balance
sheet translation was a gain of $3 million for the fourth
quarter 2007 and $5 million for the full year 2007.
Exhibit F:
CHIQUITA BRANDS INTERNATIONAL, INC.
DEBT SCHEDULE - FULL-YEAR 2008
(Unaudited - in millions)
Payments,
Dec. 31, Other Dec. 31,
2007 Additions Reductions 2008
Parent Company
7 1/2% Senior Notes (1) $250.0 $- $(54.7) $195.3
8 7/8% Senior Notes(1) 225.0 - (36.6) 188.4
4.25% Convertible Senior
Notes (2) - 200.0 200.0
Subsidiaries
Term Loans (2) 325.7 200.0 (333.2) 192.5
Revolving Credit
Facilities(2) - 57.0 (57.0) -
Other 2.5 - (1.8) 0.7
Total Debt(3) $803.2 $457.0 $(483.3) $776.9
CHIQUITA BRANDS INTERNATIONAL, INC.
DEBT SCHEDULE - FOURTH QUARTER 2008
(Unaudited - in millions)
Payments,
Sept. 30, Other Dec. 31,
2008 Additions Reductions 2008
Parent Company
7 1/2% Senior Notes (1) $207.9 $- $(12.6) $195.3
8 7/8% Senior Notes(1) 200.8 - (12.4) 188.4
4.25% Convertible Senior
Notes (2) 200.0 - - 200.0
Subsidiaries
Term Loans (2) 195.0 - (2.5) 192.5
Revolving Credit
Facilities(2) - - - -
Other 1.0 - (0.3) 0.7
Total Debt(3) $804.7 $- $(27.8) $776.9
(1) During September and October 2008, the company repurchased
$66 million and $25 million, respectively, principal amount of
its senior notes at a discount, by applying $75 million of
proceeds from the sale of Atlanta AG.
(2) The company significantly improved its debt structure by
extending debt maturities and obtaining significantly more
flexible financial covenants through the issuance of
$200 million of convertible notes and the refinancing of its
credit facility, comprised of a new $150 million revolving
credit facility and a $200 million term loan, during the
first quarter 2008.
(3) Represents continuing operations only; excludes
discontinued operations.