Dole Food Company

SECURITIES AND EXCHANGE COMMISSION

FORM 10-K Annual report pursuant to section 13 and 15(d)

Filing Date: 1996-03-13 | Period of Report: 1995-12-30 SEC Accession No. 0000912057-96-004436

(HTML Version on secdatabase.com)

FILER DOLE FOOD COMPANY INC Mailing Address Business Address 31355 OAK CREST DR 31355 OAK CREST DRIVE CIK:18169| IRS No.: 990035300 | State of Incorp.:HI | Fiscal Year End: 1231 WESTLAKE VILLAGE CA WESTLAKE VILLAGE CA Type: 10-K | Act: 34 | File No.: 001-04455 | Film No.: 96534274 91361 91361 SIC: 0100 Agricultural production-crops 8188796600

SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549

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FORM 10-K

(MARK ONE) /X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED] FOR THE FISCAL YEAR ENDED DECEMBER 30, 1995

OR / / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] FOR THE TRANSITION PERIOD FROM TO

COMMISSION FILE NUMBER 1-4455

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DOLE FOOD COMPANY, INC. (Exact name of Registrant as specified in its charter)

~~HAWAII 99-0035300 (State or other jurisdiction (I.R.S. employer of identification incorporation or number) organization)~~

~~31365 OAK CREST DRIVE WESTLAKE VILLAGE, CALIFORNIA 91361 (Address of principal executive offices)~~

~~Registrant's telephone number, including area code: (818) 879-6600~~

~~Securities registered pursuant to Section 12(b) of the Act:~~

~~NAME OF EACH EXCHANGE TITLE OF EACH CLASS ON WHICH REGISTERED ------Common Stock, No Par Value New York Stock Exchange Pacific Stock Exchange~~

~~Securities registered pursuant to Section 12(g) of the Act: None~~

Indicate by check mark whether registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes _X_ No ___

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive Proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendments to this Form 10-K. / /

~~The aggregate market value of the voting stock held by non-affiliates of the registrant as of March 9, 1996 was approximately $2,458,121,000.~~

~~The number of shares of Common Stock outstanding as of March 9, 1996 was 59,954,172.~~

~~DOCUMENTS INCORPORATED BY REFERENCE~~

~~Portions of the registrant's 1995 Annual Report to Stockholders for the year ended December 30, 1995 are incorporated by reference into Parts I, II and IV.~~

~~Portions of the registrant's definitive Proxy Statement for its 1996 Annual Meeting of Stockholders are incorporated by reference into Part III.~~

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Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document DOLE FOOD COMPANY, INC. FORM 10-K FISCAL YEAR ENDED DECEMBER 30, 1995 TABLE OF CONTENTS

~~iii~~

~~PART I~~

~~ITEM 1. BUSINESS~~

Dole Food Company, Inc. was founded in Hawaii in 1851 and was incorporated under the laws of Hawaii in 1894. Unless the context otherwise requires, Dole Food Company, Inc. and its consolidated subsidiaries are referred to herein as the "Company" and "Dole".

The Company's principal executive offices are located at 31365 Oak Crest Drive, Westlake Village, California 91361, telephone (818) 879-6600. At December 30, 1995, the Company had approximately 43,000 full-time employees worldwide. The Company is engaged in food production and distribution, and, until December 28, 1995 was engaged in real estate development and resorts. Dole is one of the largest companies engaged in the worldwide sourcing, growing, processing, distributing and marketing of high quality, branded food products. The Company sources, grows, processes or markets fruits, vegetables, nuts and beverages in the following locations: North America, Latin America, Asia and Europe.

On December 28, 1995, the Company completed the distribution to its shareholders of the Common Stock of Castle & Cooke, Inc., a Hawaii corporation to which all of the Company's real estate and resorts businesses were transferred. These real estate operations are primarily conducted under the "Castle & Cooke" name and hold, develop, operate and sell residential, commercial, industrial, retail and resorts properties in Hawaii, California, Arizona, North Carolina, Georgia and Mississippi.

The Company's food operations are described below. For detailed financial information with respect to the Company's business and its operations, see the Company's Consolidated Financial Statements and the related Notes to Consolidated Financial Statements, which are included in its 1995 Annual Report for the fiscal year ended December 30, 1995 (the "Dole Annual Report") and incorporated by reference in Part II of this report.

~~FOOD~~

~~GENERAL~~

Dole is engaged in the worldwide sourcing, growing, processing, distributing and marketing of high quality, branded food products. Dole provides retail and institutional customers and other food product companies with high quality products bearing the DOLE-Registered Trademark- trademark which are produced and improved through research, agricultural assistance and advanced harvesting,

Dole is one of the world's largest producers of bananas and pineapples. Dole is also a major marketer of citrus and table grapes worldwide and an industry leader in iceberg lettuce, celery, cauliflower and broccoli and in value-added, pre-cut salads and vegetables. Dole is a leading processor of California raisins, almonds and dates. On May 19, 1995, the Company completed the sale of its worldwide (except for Japan) juice business (except for the canned pineapple and pineapple blend fruit juice business) to Tropicana Products, Inc.

Dole's products are produced both directly on Company-owned or leased land and through associated producer and independent grower arrangements pursuant to which Dole provides varying degrees of farming, harvesting, packing, storing, shipping, stevedoring and marketing services, as well as financing through advances to growers of certain products. Fresh fruit and vegetable products, dried fruit and nuts and processed pineapple products are, for the most part, packed and/or processed directly by Dole.

Dole utilizes product quality, brand recognition, competitive pricing, effective customer service and consumer marketing programs to enhance its position within the highly competitive food industry. Consumer and institutional recognition of the DOLE-Registered Trademark- trademark and related brands and the association of these brands with high quality food products contribute significantly to Dole's ability to compete in the markets for fresh fruit and vegetables, packaged foods and dried fruit and nuts. The

~~Company owns these trademarks in the United States, Canada and in other countries in which it conducts business and regards them as important corporate assets with high recognition and acceptance.~~

The markets for all of Dole's products are highly competitive. In order to compete successfully, Dole sources products of high quality and seeks to distribute them in worldwide markets on a timely basis. Dole's competitors in the fresh fruit business include a limited number of large international food companies, as well as a large number of smaller independent food companies, grower cooperatives and foreign government-sponsored producers which have intensified competition in recent years. With respect to vegetables, a limited number of grower-shippers in the United States and Mexico supply a significant portion of the domestic fresh vegetable market. However, numerous smaller independent distributors also compete with Dole in the market for fresh vegetables. With respect to processed pineapple, Dole competes against a limited number of large U.S. companies, as well as a substantial number of smaller foreign competitors and independent canners. Dole's citrus and dried fruit and nut products compete in North America primarily against large grower cooperatives with strong brand recognition.

Dole's earnings from its fresh fruit, fresh vegetable and dried fruit and nut operations are sensitive to fluctuations in the volatile market prices for these products. Excess supplies often cause severe price competition. Growing conditions in various parts of the world, particularly weather conditions such as floods, droughts and freezes, and diseases and pests are primary factors affecting market prices because of their influence on supply and quality of product. Other factors affecting Dole's operations include the seasonality of its supplies, the ability to process products during critical harvest periods, the timing and effects of ripening, the degree of perishability, the effectiveness of worldwide distribution systems, the terms of various federal and state marketing orders (particularly for dried fruit and nuts), total worldwide industry volumes, the seasonality of consumer demand, foreign currency exchange fluctuations, foreign importation restrictions and foreign political risks.

~~PRODUCTS~~

Dole sources, distributes and markets fresh fruit products including bananas, pineapples, table grapes, apples, pears, plums, oranges, grapefruit, lemons, mangoes, kiwi, tangelos, melons, cherries and other deciduous, tropical and citrus fruits.

Dole sources, harvests, cools, distributes and markets more than 20 different types of fresh vegetable products, including iceberg lettuce, red and green leaf lettuce, romaine lettuce, butter lettuce, celery, cauliflower, broccoli, carrots, brussels sprouts, spinach, red and green onions, asparagus, snow peas, artichokes, strawberries and raspberries. Dole also markets value-added products such as iceberg lettuce based salad mixes, complete salad kits which include dressing and condiments, blends of specialty lettuces, red and green cabbage, mini peeled carrots and coleslaw.

~~Dole sources, processes and markets raisins, prunes, dates, almonds and trail mix.~~

Dole's fresh fruit and vegetable products and its consumer dried fruit and nut products are marketed under the DOLE brand, under other brand names owned by the Company, and, in some cases, under private labels.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Dole produces and markets processed food products including sliced, chunk, tidbit and crushed pineapple in cans, as well as tropical fruit salad, and markets mandarin oranges. Dole also markets DOLE-Registered Trademark- canned pineapple juice and pineapple juice blend beverages and DOLEWHIP-Registered Trademark- soft-serve, non-dairy dessert.

Dole's products are marketed through 27 direct selling offices in North America, 19 in Europe, four in Japan, one each in Hong Kong, Korea, the Middle East, the Philippines and Taiwan, as well as through independent brokers.

~~DOLE NORTH AMERICA~~

DOLE NORTH AMERICA sources, distributes and markets DOLE-Registered Trademark- fresh fruits and vegetables, dried fruit and nuts and other processed food products, including processed pineapple, canned pineapple juices and pineapple juice blend beverages, in North America.

Dole North America markets bananas and pineapples grown in Latin America, table grapes grown in the United States, Chile and Mexico, apples and pears grown in the United States and Chile, melons grown in Ecuador and citrus fruit grown in the United States, as well as other deciduous and tropical fruit grown in the United States, Latin America and Mexico. Fresh pineapple destined for North America is grown by Dole North America in Hawaii. These products are sold primarily to wholesalers and retail chains, which in turn resell or distribute them to retail food stores.

Fresh vegetables marketed by Dole are generally grown by independent growers in California, Arizona, Colorado and northern and central Mexico. The vegetables are generally field packed and transported to Dole's central cooling and distribution facilities. The products are sold to customers in North America, Asia and Western Europe.

Dried fruit and nut products are sourced from independent growers and, to a lesser extent, produced by Dole North America. They are packaged for the retail consumer and in bulk for cereal, confectionery and other food processors and for food service use. Raisins are acquired from growers and dehydrators located in the San Joaquin Valley of California. These products are marketed domestically and overseas, primarily in Western Europe and Asia. Approximately 60% of all production is sold to other food processors for eventual use in other food products. Raisins account for the largest portion of dried fruit and nut sales.

On May 19, 1995, the Company completed the sale of its worldwide juice business to Tropicana Products, Inc. Dole continues to participate in the worldwide canned pineapple and pineapple blend fruit juice business. Snow Brand Milk Products Co., Ltd., under license from Dole, conducts the juice business under the DOLE brand in Japan.

Dole has an agreement with Nestle Dairy Systems, Inc., a subsidiary of Nestle USA, Inc., in which Dole has licensed to Nestle its rights to market and manufacture processed products in key segments of the frozen novelty business in the United States and Canada, including FRUIT 'N JUICE-Registered Trademark-, SUNTOPSTM, FRESH LITES-Registered Trademark-, FRUIT 'N YOGURTTM and FRUIT 'N CREAMTM bars and, in the premium novelty category, Fruit Sorbet. Certain pineapple and pineapple blend fruit juices are obtained through co-production arrangements with independent manufacturers. Co-producers manufacture these products pursuant to strict specifications and under Company supervision designed to ensure consistently high product quality.

~~DOLE LATIN AMERICA~~

DOLE LATIN AMERICA sources and transports bananas grown in Colombia, Costa Rica, Ecuador, Guatemala, Honduras, Nicaragua, Panama and Venezuela for markets principally in North America, Europe and the Mediterranean.

Fresh pineapples destined for the North American and Western European markets are grown by Dole Latin America on plantations in Honduras and sourced from independent producers in Costa Rica. Dole Latin America is winding down its fresh pineapple operation in the Dominican Republic.

Dole Latin America sources table grapes, apples, pears and other deciduous fruit grown in Chile, melons grown in Ecuador, citrus fruit grown in Honduras and Argentina, and mangoes from Guatemala, Honduras, Mexico, Peru and Venezuela for markets in North America, Western Europe and Asia.

~~Dole operates a fleet of 9 refrigerated containerships and 25 breakbulk refrigerated ships, of which 19 are Company-owned or bareboat chartered and the remainder are time chartered. From~~

~~3 time to time, excess capacity may be chartered to others or may carry commercial cargo for third parties. In January 1995 Dole took delivery of the last of four~~

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document new breakbulk refrigerated vessels built to its specifications in a Polish shipyard.

Dole Latin America conducts other food and beverage operations in Honduras, including an approximately 80% interest in a beer and soft drink bottling operation, a bottle crown plant, a plastic injection molding facility used primarily for the manufacture of beer and soft drink plastic cases, a sugar mill and sugar cane plantations, as well as a majority interest in an edible oils refinery, a laundry soap factory, a palm oil extraction operation and a palm oil plantation. The beer and soft drink bottling operation, which sells its products primarily in Honduras, competes against other local bottlers. Competition focuses on product quality, consumer marketing programs and the effectiveness of the distribution system.

~~DOLE ASIA~~

Bananas and pineapples grown in the Philippines are transported to markets principally in Asia and the Middle East. Pineapples used for processed products are grown primarily in Thailand and the Philippines. Dole Asia also sources DOLE-Registered Trademark- and MOUNTAIN-Registered Trademark- asparagus from the Philippines and distributes and markets these products in Japan and other Asian countries.

~~Snow Dole Co., Ltd., a joint venture of Dole and Snow Brand Milk Products Co., Ltd. of Japan, processes and distributes frozen desserts, canned pineapple and other processed foods in Japan.~~

~~Dole Asia is developing citrus orchards in mainland China.~~

Dole Asia also produces leather-leaf ferns, anthuriums and other tropical flowers in the Philippines for export to Japan. The winding down of Dole Asia's shrimp farming operation in the Philippines is continuing.

~~DOLE EUROPE~~

~~DOLE EUROPE is a major importer of bananas and other fresh fruits, dried fruits, nuts and canned fruits in Europe and the Near East.~~

Dole Europe operates four regional banana ripening and distribution companies in France which complement the Company's investment in the largest French banana producer, with banana plantations in Cameroon, import operations in France and Spain, and banana ripening in eight regional facilities in France and three in Spain. Dole Europe owns and operates four regional banana ripening facilities in Spain. Dole Europe is a minority partner with the Jamaican Producer Group (the largest banana producer in Jamaica), in the Jamaican Producers Fruit Distributors Ltd. in the United Kingdom. This banana ripening and fruit distribution company operates five facilities in the United Kingdom. This joint venture distributes fresh fruits and bananas under the DOLE brand, as well as Jamaican bananas, fruits and vegetables direct to retail in the United Kingdom.

Dole Europe is the majority partner, with the Livorno Stevedore Company C.I.L.P., in a major port discharge and distribution facility in the Italian port of Livorno. This facility provides refrigerated container services utilizing feeder vessels to distribute fruit to Mediterranean markets. Dole Europe operates three banana ripening facilities and fruit and vegetable distribution facilities in Italy. Dole Europe operates a major fresh fruit and vegetable distributor and banana ripener in Northern Germany. A distribution facility for fresh fruits and banana ripening under construction in Turkey is expected to be completed during the first half of 1996.

~~In October 1995, Dole Europe launched a bid to acquire Pascual Hermanos, Spain's foremost Spanish citrus and vegetable producer and exporter. This acquisition was completed in February 1996.~~

Dole Europe owns and operates a European dried fruit and nut business which sources products from around the world for processing and packaging in France and distribution in France and to other European markets. This business distributes a line of dried fruit and nut products sold throughout Europe.

~~RESEARCH AND DEVELOPMENT~~

Dole's research and development programs concentrate on the development of new value-added products and new uses for existing products, as well as agricultural research and packaging design for improving product quality. Agricultural research is directed toward improving product yields and product quality by examining and improving agricultural practices in all phases of production (such as development of specifically adapted plant varieties, land preparation, fertilization, cultural practices, pest and disease control, and post-harvesting, packing, and shipping procedures), and includes on-site technical services and the implementation and monitoring of recommended agricultural practices. Specialized machinery is also developed for various phases of agricultural production and packaging which reduces labor, improves

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document productivity and efficiency and increases product quality. Agricultural research is conducted at field facilities primarily in California, Hawaii, Latin America and Asia.

~~FOREIGN OPERATIONS~~

Dole has significant food sourcing and related operations in Chile, Colombia, Costa Rica, the Dominican Republic, Ecuador, Honduras, the Philippines and Thailand. Dole also sources food products in Algeria, Argentina, Australia, Cameroon, China, Greece, Guatemala, Italy, Ivory Coast, Mexico, New Zealand, Nicaragua, Panama, Peru, Spain, Syria, Tunisia, Turkey and Venezuela. Significant volumes of Dole's fresh fruit and packaged products are marketed in Canada, Western Europe and Japan, with lesser volumes marketed in New Zealand, Hong Kong, South Korea, Australia and certain countries in Asia, Eastern Europe, Scandinavia, the Middle East and Central and South America. Exports of Dole's products to these countries, particularly Japan, South Korea and Taiwan, are subject to various restrictions which may be increased or reduced in response to international political pressures, thus affecting Dole's ability to compete in these markets. Some of Dole's dried fruit and nut products are marketed to Asia and Western Europe. The European Union ("EU") banana regulations which impose quotas and tariffs on bananas were in full effect in 1994 and continue to be in effect in 1996. In addition, in 1995, four Latin American countries (Costa Rica, Colombia, Nicaragua and Venezuela) implemented an agreement with the EU to receive a guaranteed share of the import quota. Trade negotiations and discussions continue between the EU, the United States and the individual banana exporting countries. These trade negotiations could lead to further changes in the regulations governing banana exports to the EU. The net impact of these changing regulations on Dole's future results of operations is not determinable at this time.

Dole's foreign operations are subject to risks of expropriation, civil disturbances, political unrest, increases in taxes and other restrictive governmental policies, such as import quotas. Loss of one or more of its foreign operations could have a material adverse effect on Dole's operating results. Dole attempts to maintain a cordial working relationship in each country where it operates. Because Dole's operations are a significant factor in the economies of certain countries, its activities are subject to intense public and governmental scrutiny, and may be affected by changes in the status of the host economies, the makeup of the government or even public opinion in a particular country. The Company distributes its products in more than 90 countries throughout the world. Dole's international sales are usually transacted in U.S. dollars and major European and Asian currencies, while certain costs are incurred in currencies different from those that are received from the sale of the product. Results of operations may be affected by fluctuations in currency exchange rates in both the sourcing and selling locations. The overall net impact of foreign currency fluctuations was immaterial to the results of operations in 1995, 1994 and 1993.

~~ENVIRONMENTAL AND REGULATORY MATTERS~~

Dole's agricultural operations are subject to a broad range of evolving environmental laws and regulations in each country in which it operates. In the United States, these laws and regulations include the Clean Air Act, the Clean Water Act, the Resource Conservation and Recovery Act, the Federal Insecticide, Fungicide and Rodenticide Act and the Comprehensive Environmental Response, Compensation and Liability Act.

Compliance with these foreign and domestic laws and related regulations is an ongoing process which is not currently expected to have a material effect on Dole's capital expenditures, earnings or competitive position. Environmental concerns are, however, inherent in most major agricultural operations, including those conducted by Dole, and there can be no assurance that the cost of compliance with environmental laws and regulations will not be material. Moreover, it is possible that future developments, such as increasingly strict environmental laws and enforcement policies thereunder, and further restrictions on the use of agricultural chemicals could result in increased compliance costs.

Dole's food operations are also subject to regulations enforced by, among others, the U.S. Food and Drug Administration and state, local and foreign equivalents and to inspection by the U.S. Department of Agriculture and other federal, state, local and foreign environmental and health authorities. Among other things, the U.S. Food and Drug Administration enforces statutory standards regarding the branding and safety of food products, establishes ingredients and manufacturing procedures for certain foods, establishes standards of identity for foods and determines the safety of food substances in the United States. Similar functions are performed by state, local and foreign governmental entities with respect to food products produced or distributed in their respective jurisdictions. Management is not currently aware of any environmental compliance issues that are expected to have a material effect on the Company's capital expenditures, earnings or competitive position.

~~ITEM 2. PROPERTIES~~

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document The Company maintains executive offices in Westlake Village, California and auxiliary executive offices in Los Angeles, California and New York, New York, all of which are leased from third parties. Dole's various divisions also maintain headquarters offices in Westlake Village, Bakersfield and Salinas, California, which are leased from third parties, and in Fresno, California, and Wenatchee, Washington, which are owned by the Company. The Company owns its Latin American regional headquarters building in Costa Rica, as well as offices in Colombia and Honduras. Dole Europe maintains its European headquarters in Paris, France and regional offices in Hamburg, Germany, Brussels, Belgium and Genoa, Italy, which are leased from third parties. Dole Asia maintains offices in Hong Kong, Manila, the Philippines and Tokyo, Japan, which are leased from third parties. The inability to renew any of the above office leases by the Company would not have a material adverse effect on the Company's operating results. The Company and each of its subsidiaries believe that their property and equipment are generally well maintained, in good operating condition and adequate for their present needs.

~~The following is a description of the Company's significant properties.~~

~~DOLE~~

~~DOLE NORTH AMERICA~~

Dole's Hawaii pineapple operations for the fresh produce market are located on the island of Oahu and total approximately 7,000 acres, 5,500 of which are owned by the Company and the remainder of which are leased.

Dole produces citrus on approximately 12,000 acres in the San Joaquin Valley of California owned directly or through agricultural partnerships and on substantial additional acreage under management arrangements, as well as through independent growing arrangements. Dole also provides care and management services for approximately 10,000 citrus acres in Florida. Citrus is packed in six Company-owned or leased packing houses -- five in California and one in Florida. Dole, through a joint venture, operates a 175,000 square foot packing house in southwest Florida with two multi-variety production lines.

~~Domestic table grapes are sourced from approximately 4,500 acres on three Company-owned vineyards in the San Joaquin Valley. Domestic table grapes are fumigated and cooled in two Company-~~

6 owned facilities in the San Joaquin Valley. Dole produces wine grapes on approximately 1,000 acres and stone fruit on approximately 800 acres of Company-owned property in the San Joaquin Valley. The Company owns a cherry packing and processing facility in Victor, California.

Dole produces apples and pears directly from seven Company-owned orchards on approximately 1,700 productive acres in Wenatchee and Chelan, Washington as well as through independent growing arrangements. The Company also owns apple and pear storage, processing and packing facilities in Wenatchee and Chelan.

The Company owns approximately 1,400 acres of farmland in California and Arizona, and leases approximately 11,400 acres of farmland in California and another 5,300 acres in Arizona in connection with Dole's vegetable operations. The majority of this acreage is farmed under joint growing arrangements with independent growers, while the remainder is farmed by Dole. The Company owns cooling, packing and shipping facilities in Yuma, Arizona and the following California cities: Marina, Holtville, Guadalupe, Gonzales and Huron. Additionally, the Company has partnership interests in facilities in Yuma, Arizona and Mexico, and leases facilities in Oxnard, California. The Company owns state-of-the-art, value-added processing plants in Yuma, Arizona and Soledad, California.

Dole produces almonds from approximately 4,300 acres and pistachios from approximately 3,000 acres of orchards in the San Joaquin Valley, owned directly or through agricultural partnerships or leased. The Company leases approximately 50 acres of date gardens in the Coachella Valley.

The Company owns and operates one almond processing and packing plant, three almond receiving and storage facilities and two raisin and prune processing and packing plants, all of which are located in the San Joaquin and Sacramento Valleys. The Company owns and operates a date processing plant in the Coachella Valley. The Company sold its pistachio processing plant in August of 1995.

Hawaii sugar operations include a mill which produces raw sugar and a plantation on the island of Oahu. The phase-out of this operation was first announced in 1994 and is continuing. The plantation consists of approximately 12,000 acres (approximately 6,200 acres of which are owned and the remainder of which are leased) which are used for diversified agricultural crops. The remaining sugar cane will be harvested in 1996.

Portions of the Company's fresh fruit and vegetable farm properties are irrigated by surface water supplied by local government agencies using facilities financed by federal or state agencies, as well as from underground

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document sources. Water received through federal facilities is subject to acreage limitations under the 1982 Reclamation Reform Act. The quantity and quality of these water supplies varies depending on weather conditions and government regulations. The Company believes that under normal conditions these water supplies are adequate for current production needs.

~~DOLE LATIN AMERICA~~

Dole produces bananas directly from Company-owned plantations in Costa Rica, Colombia and Honduras as well as through associated producers or independent growing arrangements in those countries and in Ecuador, Guatemala, Panama, Nicaragua and Venezuela. The Company owns approximately 40,400 acres in Honduras, 32,400 acres in Costa Rica and 3,600 acres in Colombia.

~~Dole also grows pineapple on approximately 6,000 acres of owned land in Honduras, primarily for the fresh produce market, and owns a juice concentrate plant in Honduras for pineapple and citrus.~~

~~Dole produces citrus on approximately 650 acres of Company-owned land and operates a grapefruit packing house in Honduras.~~

Dole grows grapes, stonefruit, kiwi and pears on approximately 900 Company-owned acres in Chile. Dole owns and operates 11 packing and cold storage facilities, a corrugated box plant and a wooden grape box plant in Chile.

~~Dole operates Company-owned corrugated box plants in Colombia, Costa Rica, Ecuador and Honduras.~~

The Company has an interest in the following properties in Honduras: an approximately 80% interest in a beer and soft drink bottling operation, a bottle crown plant, a plastic injection molding facility used primarily for the manufacture of beer and soft drink plastic cases and a sugar mill, as well as a majority interest in an edible oils refinery, a laundry soap factory, a palm oil extraction operation and 3,400 acres of palm oil plantation.

Dole operates a fleet of 9 refrigerated containerships and 25 breakbulk refrigerated ships, of which 19 are Company-owned or bareboat chartered and the remainder are time chartered. From time to time, excess capacity may be chartered to others or may carry commercial cargo for third parties. In January 1995 Dole took delivery of the last of four new breakbulk refrigerated vessels built to its specifications in a Polish shipyard.

~~DOLE ASIA~~

Dole operates a pineapple plantation of approximately 30,200 acres in the Philippines. Originally covered by a grower agreement between Dole and a government-owned and controlled corporation, approximately 22,100 acres of the plantation have been transferred to a cooperative of Dole employees that will acquire the land pursuant to an agrarian reform law. The remaining acreage in the Philippines is farmed pursuant to farm management contracts. A cannery, chillroom, juice concentrate plant, corrugated box plant and can manufacturing plant, each owned by Dole, are proximately located to the plantation.

Dole's Thailand subsidiary owns and operates a cannery, can plant and juice concentrate plant located in central Thailand and a second multi-fruit cannery in southern Thailand. Through a subsidiary in Thailand controlled by Dole, Dole grows pineapple on approximately 3,900 acres of leased land and purchases additional supplies of pineapple in Thailand on the open market.

Dole also produces bananas through associated producers or independent growing arrangements in the Philippines, and, with a joint venture partner, is developing approximately 6,400 acres of citrus orchards in China.

~~DOLE EUROPE~~

Dole owns four banana ripening and fruit distribution facilities in France and four in Spain, three in Italy and one in Germany. The Company has a minority interest in a French company which has eight banana ripening and fruit distribution facilities in France and three in Spain. This French company owns a majority interest in banana plantations in Cameroon and pineapple plantations in the Ivory Coast, and has banana producing interests in the Ivory Coast. Dole owns a minority interest in a banana ripening and fruit distribution company with five facilities in the United Kingdom. Dole Europe is the majority owner in a port terminal and distribution facility in Livorno, Italy. The Company owns land near Istanbul, Turkey on which construction of a banana ripening and fruit distribution facility is nearly completed.

In France, the Company owns a dried fruit and nut processing, packaging and warehousing facility in Vitrolles, a date processing and packing plant in Marseille and a prune processing and packaging plant in Agen.

~~ITEM 3. LEGAL PROCEEDINGS~~

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document In the Company's Form 10-QA for the quarter ended October 7, 1995, the Company described certain lawsuits that had been filed in Texas against some of the manufacturers of a formerly widely used agricultural chemical called DBCP, the Company and several of its competitors. In these lawsuits, a large number of foreign nationals allege personal injuries caused by contact with DBCP. The plaintiffs claim that during the 1960's and 1970's they were employees of Company subsidiaries, competitors and independent local growers. In October 1995, four of the six cases pending in Texas state courts were dismissed by the Texas federal court on the grounds that the plaintiffs' home countries are the more appropriate forums for the claims. This dismissal involved approximately 75% of the Texas plaintiffs, many of whom have now filed claims in their home countries. The remaining two cases were remanded to Texas state courts, where procedural issues are now being addressed.

Additionally, two new, similar DBCP actions were filed in Louisiana state court in June 1995 by plaintiffs from some of the same foreign countries. The Louisiana cases were removed to federal court where defendants have filed a motion to dismiss on the same grounds successfully asserted in the Texas dismissal action. As to all such matters, the Company has denied liability and asserted substantial defenses. In the opinion of management, after consultation with outside counsel, the pending lawsuits are not expected to have a material adverse effect on the Company's financial position or results of operations.

The Company is involved from time to time in other various claims and legal actions incident to its operations, both as plaintiff and defendant. In the opinion of management, after consultation with outside counsel, none of the claims or actions to which the Company is a party is expected to have a material adverse effect on the Company's financial position or results of operations.

~~ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS~~

~~There were no matters submitted to a vote of security holders during the quarter ended December 30, 1995.~~

~~EXECUTIVE OFFICERS OF THE REGISTRANT~~

Below is a list of the names and ages of all executive officers of the Company as of March 11, 1996 indicating their positions with the Company and their principal occupations during the past five years. The current terms of the executive officers will expire at the next organizational meeting of the Company's Board of Directors or at such time as their successors are elected.

~~PART II~~

~~ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS~~

As of March 9, 1996, there were approximately 14,188 holders of record of the Company's Common Stock. Additional information required by Item 5 is contained on pages 29, 32, 37 and 39 of the Dole Annual Report. Such information is incorporated herein by reference.

~~ITEM 6. SELECTED FINANCIAL DATA~~

~~There is hereby incorporated by reference the information appearing under the caption "Results of Operations and Selected Financial Data" on page 37 of the Dole Annual Report.~~

~~ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~

There is hereby incorporated by reference the information appearing under the caption "Management's Discussion and Analysis of Results of Operations and Financial Position" on pages 34, 35 and 36 of the Dole Annual Report.

~~ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA~~

~~There is hereby incorporated by reference the information appearing on pages 21 through 32 of the Dole Annual Report. See also Item 14 of this report.~~

~~ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE~~

There have been no changes in the Company's independent public accountants for the 1995 and 1994 fiscal years nor have there been any disagreements with the Company's independent public accountants on accounting principles or practices for financial statement disclosures.

~~PART III~~

~~ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT~~

~~There is hereby incorporated by reference the information regarding the Company's directors to appear under the caption "Election of Directors" in the Company's definitive proxy statement for its~~

1996 Annual Meeting of Stockholders (the "1995 Proxy Statement"). See the list of the Company's executive officers and related information under "Executive Officers of the Registrant", which is set forth in Part I hereof.

~~ITEM 11. EXECUTIVE COMPENSATION~~

~~There is hereby incorporated by reference the information to appear under the captions "Remuneration of Directors" and "Compensation of Executive Officers" in the 1996 Proxy Statement.~~

~~ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT~~

There is hereby incorporated by reference the information with respect to security ownership to appear under the captions "General Information", "Beneficial Ownership of Certain Stockholders" and "Security Ownership of Directors and Executive Officers" in the 1996 Proxy Statement.

~~ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS~~

~~There is hereby incorporated by reference the information to appear under the caption "Certain Transactions" in the 1996 Proxy Statement.~~

~~ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K~~

~~(a)1. Financial Statements:~~

~~The following consolidated financial statements are included in the Dole Annual Report and are incorporated herein by reference:~~

~~2. Financial Statement Schedules:~~

~~All other schedules are omitted because they are not applicable, not required or the information is included elsewhere in the financial statements or notes thereto.~~

~~3. Exhibits:~~

~~(b)Reports on Form 8-K:~~

~~No current reports on Form 8-K were filed by the Company during the last quarter of the year ended December 30, 1995.~~

~~SIGNATURES~~

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

~~DOLE FOOD COMPANY, INC. Registrant~~

~~March 13, 1996 By /s/ DAVID H. MURDOCK ------David H. Murdock CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER~~

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

/s/ DAVID H. MURDOCK Chairman of the Board and Chief ------Executive Officer and Director March 13, 1996 David H. Murdock
/s/ DAVID A. DELORENZO President, Chief Operating Officer ------and Director March 13, 1996 David A. DeLorenzo
/s/ MICHAEL S. KARSNER Vice President -- Treasurer and Chief ------Financial and (Principal Financial March 13, 1996 Michael S. Karsner Officer)
/s/ PATRICIA A. MCKAY Vice President -- Finance and ------Controller (Principal Accounting March 13, 1996 Patricia A. McKay Officer)
/s/ ELAINE L. CHAO ------Director March 13, 1996 Elaine L. Chao
Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document /s/ MIKE CURB ------Director March 13, 1996 Mike Curb
/s/ RICHARD M. FERRY ------Director March 13, 1996 Richard M. Ferry
/s/ JAMES F. GARY ------Director March 13, 1996 James F. Gary
/s/ FRANK J. HATA ------Director March 13, 1996 Frank J. Hata

~~EXHIBIT INDEX~~

~~EXHIBIT INDEX~~

~~REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ON FINANCIAL STATEMENT SCHEDULE~~

~~To the Shareholders and Board of Directors of Dole Food Company, Inc.:~~

We have audited in accordance with generally accepted auditing standards, the consolidated financial statements included in Dole Food Company, Inc.'s annual report to shareholders incorporated by reference in this Form 10-K, and have issued our report thereon dated February 5, 1996. Our audit was made for the purpose of forming an opinion on those statements taken as a whole. The schedule listed in the preceding index is the responsibility of the Company's management and presented for purposes of complying with the Securities and Exchange Commission's rules and are not part of the basic financial statements. This schedule has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, fairly states in all material respects the financial data required to be set forth therein in relation to the basic financial statements taken as a whole.

~~/s/ ARTHUR ANDERSEN LLP~~

~~Los Angeles, California February 5, 1996~~

~~F-1~~

~~SCHEDULE II~~

~~DOLE FOOD COMPANY, INC. VALUATION AND QUALIFYING ACCOUNTS~~

~~Note: (A) Write-off of uncollectible amounts.~~

~~F-2~~

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document DOLE FOOD COMPANY, INC. EXHIBIT 11 Computations of Earnings per Common Share (in 000s, except per share amounts)

~~SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.~~

~~DOLE FOOD COMPANY, INC. CONSOLIDATED BALANCE SHEETS~~

~~SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.~~

~~DOLE FOOD COMPANY, INC. CONSOLIDATED STATEMENTS OF CASH FLOW~~

~~SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.~~

~~DOLE FOOD COMPANY, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~NOTE 1 - NATURE OF OPERATIONS~~

Dole Food Company, Inc. and its consolidated subsidiaries ("the Company") is engaged in the worldwide sourcing, processing, distributing and marketing of high quality, branded food products including fruits, vegetables and nuts in the following locations: North America; Latin America, principally Chile, Colombia, Costa Rica, Ecuador, Guatemala, Honduras and Panama; Asia, principally Japan, the Philippines and Thailand; and Europe, principally France, Germany, Italy, Spain and the United Kingdom. The Company also conducts other operations in Honduras, primarily beverage bottling.

The Company's principal products are produced both directly on Company-owned or leased land and through associated producer and independent grower arrangements. The Company's products are primarily packed and processed by the Company and sold to retail and institutional customers and other food product companies.

~~NOTE 2 - SUMMARY OF ACCOUNTING POLICIES~~

~~PRINCIPLES OF CONSOLIDATION - The consolidated financial statements include the accounts of all significant majority-owned subsidiaries. All significant intercompany transactions have been eliminated.~~

ANNUAL CLOSING DATE - The Company's fiscal year ends on the Saturday closest to December 31. Fiscal years 1995, 1994 and 1993 ended on December 30, 1995, December 31, 1994 and January 1, 1994, respectively.

INVENTORIES - Inventories are stated at the lower of cost or market. Cost is determined principally on a first-in, first-out basis. Specific identification and average cost methods are also used for packing materials and operating supplies.

~~AGRICULTURAL COSTS - The costs of growing bananas and pineapples are charged to operations as incurred. Growing costs related to other crops are recognized when the crops are harvested and sold.~~

~~INVESTMENTS - Investments in affiliates with ownership of 20% to 50% are generally recorded on the equity method.~~

PROPERTY, PLANT AND EQUIPMENT - Property, plant and equipment are stated at cost, less accumulated depreciation. Depreciation is computed principally by the straight-line method over the estimated useful lives of the assets.

FOREIGN EXCHANGE - The United States ("U.S.") dollar is the functional currency for substantially all of the Company's consolidated operations. Net foreign exchange transaction gains or losses for companies with the U.S. dollar as their functional currency are included in determining net income and resulted in net losses of $2.4 million, $3.5 million, and $3.6 million, for 1995, 1994 and 1993, respectively. Net foreign exchange gains or losses resulting from the translation of assets and liabilities of foreign subsidiaries whose local currency is the functional currency are accumulated in a separate component of common shareholders' equity.

INCOME TAXES - Deferred income taxes are recognized for the tax consequences of temporary differences by applying enacted statutory tax rates to the differences between financial statement carrying amounts and the tax bases of assets and liabilities. The income taxes which would be due upon the distribution of foreign subsidiary earnings have not been provided where the undistributed earnings are considered permanently invested.

~~EARNINGS PER COMMON SHARE - Primary earnings per common share are based on the weighted average number of shares outstanding during the period after~~

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document consideration of the dilutive effect of stock options and restricted stock awards. The primary weighted average number of common shares outstanding was 59.8 million for 1995 and 59.7 million for 1994 and 1993.

~~CASH AND SHORT-TERM INVESTMENTS - Cash and short-term investments include cash on hand and time deposits. Such short-term investments generally have original maturities of three months or less.~~

FAIR VALUE OF FINANCIAL INSTRUMENTS - For short-term financial instruments the historical carrying amount is a reasonable estimate of fair value. For long-term financial instruments not readily marketable, fair values were estimated based upon discounted future cash flows at prevailing market interest rates. Based on these assumptions, management believes the fair market values of the Company's financial instruments other than certain debt instruments (see Note 7) are not materially different from their recorded amounts as of December 30, 1995.

STOCK BASED COMPENSATION - In October 1995, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based Compensation"("SFAS 123"). SFAS 123 defines a fair value based method of accounting for employee stock compensation plans, but allows for the continuation of the intrinsic value based method of accounting to measure compensation cost prescribed by Accounting Principles Board Opinion No. 25 "Accounting for Stock Issued to Employees" ("APB 25"). For companies electing not to change their accounting, SFAS 123 requires pro forma disclosures of earnings and earnings per share as if the change in accounting provisions of SFAS 123 had been adopted. The Company has elected to continue to utilize the accounting method prescribed by APB 25 and adopt the disclosure requirements of

~~SFAS 123 when required in 1996. As a result, SFAS 123 will have no effect on the financial condition or results of operations of the Company.~~

USE OF ESTIMATES - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Management believes that these estimates and assumptions provide a reasonable basis for the fair presentation of the financial statements.

~~RECLASSIFICATIONS - Certain prior year amounts have been reclassified to conform to the 1995 presentation.~~

~~NOTE 3 - ACQUISITIONS AND DISPOSITIONS~~

During 1995, the Company acquired various food operations located in Europe for an aggregate cash purchase price of approximately $35 million. During 1994, the Company acquired a 35% interest in a produce distribution company in the United Kingdom and various other food and food related operations for an aggregate purchase price of approximately $64 million. Each of these acquisitions was accounted for as a purchase and accordingly, the purchase price was allocated to the net assets acquired based upon their estimated fair values as of the date of acquisition. The fair values of assets acquired and liabilities assumed were $70 million (including cash of $3 million) and $35 million for 1995 and $91 million (including cash of $1 million) and $27 million for 1994.

Subsequent to December 30, 1995 the Company signed an agreement to acquire a Spanish grower/marketer of citrus and fresh vegetables for approximately $25 million. The acquisition is expected to be completed in the first quarter of 1996.

During 1995, the Company completed the sale of its worldwide juice and juice beverage business, resulting in net proceeds of approximately $270 million and a pretax gain of approximately $145 million. In addition, during 1995 the Company began to implement its plan to sell certain of its agricultural properties and other assets which have generated low returns. The book value of the assets to be sold exceeded the estimated fair value less costs to sell, resulting in an adjustment of $83.3 million. The above dispositions resulted in a net pretax gain of $61.7 million.

~~NOTE 4 - DISCONTINUED OPERATIONS~~

On December 28, 1995, the Company completed the separation of its real estate and resorts entity, Castle & Cooke, Inc. ("Castle") from its food business. In connection with the distribution, each Company shareholder of record on December 20, 1995 received a dividend of one share of Castle common stock for every three shares of the Company's common stock. The distribution is not

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document currently taxable to the Company's shareholders since the Company did not, for federal income tax purposes, have current earnings and profits for 1995 or accumulated earnings and profits as of the distribution date.

Under the plan of distribution, the Company transferred approximately $1.0 billion of net assets to Castle, and in partial consideration thereof the Company received cash proceeds of approximately $235 million and a $10 million note receivable from Castle which bears interest at the rate of 7% per annum and is due December 8, 2000. As a result of the distribution, the Company's common shareholders' equity was reduced by approximately $582 million. (See Note 10.)

In connection with the distribution, the operating results of the real estate and resorts business have been accounted for as discontinued operations. The 1994 and 1993 consolidated financial statements have been restated to conform with the 1995 presentation.

During 1995, the Company elected to adopt Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed of" ("SFAS 121"), which requires an impaired property to be written down to fair value. The Company reviewed certain of its real estate and resort properties to determine whether expected future cash flows (undiscounted and without interest charges) from each property would result in the recovery of the carrying amount of such property. Certain adverse developments affecting the Lana'i resort properties which occurred subsequent to the Company's 1994 year end caused management to substantially lower its estimates of future cash flow and led to a determination that the Lana'i resort properties were impaired in accordance with generally accepted accounting principles. In accordance with Statement of Financial Accounting Standards No. 67, "Accounting for Costs and Initial Rental Operations of Real Estate Projects" ("SFAS 67"), each of the Company's real estate projects was carried at the lower of cost or net realizable value, with net realizable value deemed to be the undiscounted estimated future cash flows from the project. Under SFAS 67, the Lana'i resort properties would have been written down by approximately $91 million to their net realizable value. In accordance with SFAS 121, an impairment loss of $103.8 million after tax was recorded as part of discontinued operations in the accompanying 1995 statement of income.

Revenues from discontinued operations for 1995, 1994 and 1993 were $349 million, $343 million and $322 million, respectively. Income (loss) from discontinued operations reflects an allocation of the Company's overall interest costs, based on the cash proceeds and the interest bearing note received by the Company at distribution,

of $7.3 million, $6.8 million and $7.8 million after tax for 1995, 1994 and 1993, respectively. Net assets held for distribution as of December 31, 1994 consist primarily of receivables, real estate developments, property and equipment, accounts payable and accrued liabilities.

~~NOTE 5 - CURRENT ASSETS AND LIABILITIES~~

Short-term investments of $16.3 million and $8.3 million as of December 30, 1995 and December 31, 1994, respectively, consisted principally of time deposits. Outstanding checks which are funded as presented for payment totaled $54.8 million and $35.8 million as of December 30, 1995 and December 31, 1994, respectively, and were included in accounts payable.

~~Details of certain current assets were as follows:~~

~~Accrued liabilities as of December 30, 1995 and December 31, 1994 included approximately $109.0 million and $84.6 million, respectively, of amounts due to growers.~~

~~In 1993, the Company recorded a charge of $42.5 million related to the continuation of the cost reduction and profit improvement programs initially implemented in 1992.~~

~~NOTE 6 - PROPERTY, PLANT AND EQUIPMENT~~

~~Major classes of property, plant and equipment were as follows:~~

~~Depreciation expense for 1995, 1994 and 1993 totaled $106.2 million, $107.3 million and $96.7 million, respectively.~~

~~NOTE 7 - DEBT~~

Notes payable consisted primarily of short-term borrowings required to fund certain foreign operations and totaled $21.8 million with a weighted average interest rate of 12.8% as of December 30, 1995, and $50.4 million with a weighted average interest rate of 6.2% as of December 31, 1994.

~~Long-term debt consisted of:~~

~~The Company estimates the fair value of its fixed interest rate unsecured debt based on current quoted market prices. The estimated fair value of~~

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document unsecured noncallable notes (face value $700 million) was $714 million and $628 million at December 30, 1995 and December 31, 1994, respectively.

In May 1994, the Company replaced its existing revolving credit facility with a $1 billion, 5-year revolving credit facility ("Facility"). At the Company's option, borrowings under the Facility bear interest at a certain percentage over the agent's prime rate or the London Interbank Offered Rate ("LIBOR"). Provisions under the Facility require the Company to comply with certain financial covenants which include a maximum permitted ratio of consolidated debt to net worth and a minimum required fixed charge coverage ratio. At December 30, 1995 and December 31, 1994, net borrowings outstanding under this facility were approximately $81 million and $771 million, respectively.

The Company may also borrow under uncommitted lines of credit at rates offered from time to time by various banks that may not be lenders under the Facility. Net borrowings outstanding under the uncommitted lines of credit totaled $89 million and $65 million at December 30, 1995 and December 31, 1994, respectively.

Sinking fund requirements and maturities with respect to long-term debt as of December 30, 1995 were as follows (in millions): 1997 - $3.3; 1998 - $6.9; 1999 - $171.0; 2000 - $225.7; and thereafter $489.1.

~~Interest payments during 1995, 1994 and 1993 totaled $86.4 million, $67.6 million and $45.5 million, respectively.~~

~~NOTE 8 - EMPLOYEE BENEFIT PLANS~~

The Company has qualified and non-qualified defined benefit pension plans covering certain full-time employees. Benefits under these plans are generally based on each employee's eligible compensation, except for certain hourly plans which are based on negotiated benefits and years of service.

For U.S. plans, the Company's funding policy is to fund the net periodic pension cost plus a 15-year amortization of the unfunded liability. The plans covering international employees are generally not funded.

~~The status of the defined benefit pension plans was as follows:~~

~~U.S. PLANS (IN THOUSANDS) 1995 1994 ------Actuarial present value of accumulated benefit obligation Vested $227,572 $212,149 Non-vested 3,581 3,195 ------$231,153 $215,344 ------~~

Actuarial present value of projected benefit obligation $239,855 $223,082 Plan assets at fair value, primarily stocks and bonds 238,730 206,326 ------Projected benefit obligation in excess of plan assets (1,125) (16,756) Unrecognized net transition obligation (942) (1,087) Unrecognized prior service cost 2,662 1,714 Unrecognized net (gain) loss (83) 17,866 Additional minimum liability (1,941) (10,917) ------Accrued pension liability $ (1,429) $ (9,180) ------

~~INTERNATIONAL PLANS (IN THOUSANDS) 1995 1994 ------Actuarial present value of accumulated benefit obligation Vested $ 9,411 $ 8,463 Non-vested 3,303 6,635 ------$ 12,714 $ 15,098 ------~~

~~Actuarial present value of projected benefit obligation $ 28,796 $ 27,447 Plan assets at fair value, primarily~~

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document stocks and bonds 2,176 1,970 ------Projected benefit obligation in excess of plan assets (26,620) (25,477) Unrecognized net transition obligation 3,133 3,580 Unrecognized prior service cost 3,104 4,325 Unrecognized net loss 1,576 598 Additional minimum liability (868) (695) ------Accrued pension liability $(19,675) $ (17,669) ------

For U.S. plans, the projected benefit obligation was determined using assumed discount rates of 7.5% in 1995 and 8.5% in 1994 and assumed rates of increase in future compensation levels of 4.5% in 1995 and 5% in 1994. The expected long-term rate of return on assets was 9% in both years. For international plans, the projected benefit obligation was determined using assumed discount rates of 7.5% to 20% in 1995 and 8.5% to 20% in 1994 and assumed rates of increase in future compensation levels of 4.5% to 17.5% in 1995 and 5% to 17.5% in 1994. The expected long-term rate of return on assets for international plans was 9% to 20% in 1995 and 12% to 20% in 1994.

~~Pension expense for the U.S. and international plans consisted of the following components:~~

(IN THOUSANDS) 1995 1994 1993 ------Service cost-benefits earned during the year $ 8,114 $ 7,158 $ 5,902 Interest cost on projected benefit obligation 21,270 20,112 20,616 Actual (return) loss on plan assets (46,944) 4,656 (31,448) Net amortization and deferral 28,337 (22,980) 13,379 ------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 resulting 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~~

percentage of their annual compensation up to a maximum allowable under federal income tax law to supplement their retirement income. These plans provide for Company contributions based on a certain percentage of each participant's contribution. Total Company contributions to these plans for 1995, 1994 and 1993 were $4.4 million, $4.7 million and $4.5 million, respectively.

The Company is also a party to various industrywide collective bargaining agreements which also provide pension benefits. Total contributions to these plans plus direct payments to pensioners were $0.8 million in 1995, $0.9 million in 1994 and $0.8 million in 1993.

In addition to providing pension benefits, the Company provides certain health care and life insurance benefits for eligible retired employees. Certain employees may become eligible for such benefits if they fulfill established requirements upon reaching retirement age.

~~The status of the postretirement benefit plans was as follows:~~

(IN THOUSANDS) 1995 1994 ------Accumulated postretirement benefit obligation ("APBO") Retirees $66,757 $61,190 Fully eligible actives 6,892 9,043 Other actives 7,669 8,247 ------81,318 78,480 Unrecognized prior service cost 1,897 1,516 Unrecognized net gain 4,660 6,101 ------Accrued postretirement benefit liability $87,875 $86,097 ------

~~Postretirement benefit expense included the following components:~~

(IN THOUSANDS) 1995 1994 1993 ------Service cost - benefits earned during the year $ 449 $ 578 $ 803 Interest cost on APBO 7,258 6,755 7,484 Net amortization and deferral (342) 26 5 ------Postretirement benefit expense $7,365 $7,359 $8,292 ------

For U.S. plans, an annual rate of increase in the per capita cost of covered health care benefits of 10% in 1996 decreasing to 5% in 2006 and thereafter was assumed in determining the APBO for 1995, and 13% in 1995 decreasing to 5.5% in 2010 was assumed in determining the APBO for 1994. For the Company's international plan, the assumed health care cost trend rate was 20% in 1995 and 1994. Increasing the assumed health care cost trend rate by one percentage point in each year would have resulted in an increase in the Company's APBO as of December 30, 1995 of approximately $7.5 million and the aggregate of the service and interest cost components of postretirement benefit expense for 1995 of approximately $0.9 million. The weighted average discount rate used in determining the APBO was 7.5% in 1995 and 8.5% in 1994 for U.S. plans and 20% in 1995 and 1994 for the international plan. The plans are not funded.

~~NOTE 9 - STOCK OPTIONS AND AWARDS~~

Under the 1991 and 1982 Stock Option and Award Plans ("the Option Plans"), the Company can grant incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock awards and performance share awards to officers and key employees of the Company. Stock options may be exercised for up to ten years from the date of grant with or without stock appreciation rights, as determined by the committee of the Company's Board of Directors administering the Option Plans. No stock appreciation rights, restricted stock awards or performance share awards were outstanding at December 30, 1995.

During 1995, the 1995 Non-Employee Directors Stock Option Plan ("the Directors Plan") was adopted by the Board of Directors and approved by the Company's shareholders. On February 15th of each year, each active non-employee director will receive a non-discretionary grant of non-qualified stock options ("the Options"). The Options vest over a three-year period and expire 10 years after the date of the grant or upon early termination as defined by the plan agreement.

~~Changes in outstanding stock options were as follows:~~

AVERAGE SHARES PRICE ------Outstanding, January 2, 1993 1,495,730 $29.70 Granted 411,850 33.12 Exercised (41,733) 27.88 Canceled (146,065) 36.52 ------Outstanding, January 1, 1994 1,719,782 29.98 Granted 508,500 29.07 Exercised (12,117) 26.69 Canceled (160,401) 34.39 ------Outstanding, December 31, 1994 2,055,764 29.43 Granted 563,000 27.21 Exercised (371,989) 13.73 Canceled (294,513) 31.30 Net adjustment for distribution of real estate and resorts business 8,158 ------Outstanding, December 30, 1995 1,960,420 $29.23 ------Exercisable, December 30, 1995 1,048,233 $31.61 ------In December 1995, the number and exercise price of all options outstanding were adjusted to reflect the impact of the distribution of the real estate and resorts business. (See Note 4.)

Authorized capital at December 30, 1995 consisted of 80 million shares of no par value common stock and 30 million shares of no par value preferred stock, issuable in series. At December 30, 1995, approximately 3.7 million shares and 50,000 shares of common stock were reserved for issuance under the Option Plans and the Directors Plan, respectively. There was no preferred stock outstanding.

~~The Company's dividend policy is to pay quarterly dividends on common shares at an annual rate of 40 cents per share.~~

~~Changes in shareholders' equity were as follows:~~

29
NOTE 11 - CONTINGENCIES
At December 30, 1995, the Company was contingently liable for guarantees of indebtedness issued on behalf of certain key fruit suppliers of $82.2 million and other guarantees associated with unaffiliated entities integral to the Company's operations of $24.1 million.
The Company is involved from time to time in various claims and legal actions incident to its operations, both as plaintiff and defendant. In the opinion of management, after consultation with legal counsel, none of such claims is expected to have a material adverse effect on the Company's financial position or results of operations.
NOTE 12 - LEASE COMMITMENTS
The Company has obligations under non-cancelable operating leases, primarily for ship charters and containers, and certain equipment and office facilities. Lease terms are generally for less than the economic life of the property. Certain agricultural land leases provide for increases in minimum rentals based on production. Total rental expense was $208.5 million, $177.6 million and $168.0 million (net of sublease income of $14.9 million, $13.3 million and $19.1 million) for 1995, 1994 and 1993, respectively.
During 1995, the Company entered into an agreement with a syndicate of banks for the sale and leaseback of certain vessels including four recently constructed refrigerated vessels. This transaction generated net proceeds of approximately $133 million. The Company will lease the vessels for seven years.
At December 30, 1995, the Company's aggregate minimum rental commitments, before sublease income, were as follows (in millions): 1996 - $172.4; 1997 -
Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document $77.0; 1998 - $40.8; 1999 - $34.4; 2000 - $30.7 and thereafter - $176.5. Total future sublease income is $18.3 million.
NOTE 13 - INCOME TAXES
Income tax expense (benefit) was as follows:

(IN THOUSANDS) 1995 1994 1993 ------ Current Federal, state and local $ 2,292 $(25,594) $ 21,243 Foreign 23,279 21,421 13,625 ------25,571 (4,173) 34,868 ------Deferred Federal, state and local 30,656 8,989 (25,883) Foreign (227) 5,084 (5,385) ------30,429 14,073 (31,268) ------$56,000 $ 9,900 $ 3,600 ------
Pretax earnings attributable to foreign operations were $181 million, $165 million and $145 million for 1995, 1994 and 1993, respectively. Undistributed earnings of foreign subsidiaries, which have been or are intended to be permanently invested, aggregated $972 million at December 30, 1995.
The Company's reported income tax expense varied from the expense calculated using the U.S. federal statutory tax rate for the following reasons:

(IN THOUSANDS) 1995 1994 1993 ------ Expense computed at U.S. federal statutory income tax rate $ 61,538 $ 23,851 $ 23,007 Foreign income taxed at different rates (16,366) (11,036) (24,014) Dividends from subsidiaries - 187 341 State and local income tax, net of federal income tax benefit 4,293 (584) (553) Impact of tax rate change - - 1,450 Other 6,535 (2,518) 3,369 ------Reported income tax expense $ 56,000 $ 9,900 $ 3,600 ------
Total income tax payments, net of refunds, for 1995, 1994 and 1993 were $51.3 million, $4.1 million and $23.8 million, respectively. Subsequent to 1995, the Company filed for and received a federal income tax refund of $22.9 million.
Deferred tax assets (liabilities) were comprised of the following:

(IN THOUSANDS) 1995 1994 1993 ------ ~~Operating reserves $ 36,840 $ 2,053 $ 13,674 Accelerated depreciation (37,868) (35,040) (38,739) Inventory valuation methods 3,690 13,086 5,917 Effect of differences between book values~~
Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document assigned in prior acquisitions and historical tax values (37,927) (61,811) (53,141) Postretirement benefits 31,263 32,484 34,768 Current year acquisitions - - (8,603) Tax credit carryforward 39,310 30,509 39,075 Net operating loss carryforward 79,616 10,998 3,115 Other, net (22,308) (29,642) (19,317) ------$ 92,616 $(37,363) $(23,251) ------
30
The Company has recorded deferred tax assets of $79.6 million reflecting the benefit of approximately $30 million in capital loss carryforwards, which begin to expire in 2000, and $195 million of ordinary loss carryforwards which begin to expire in 2009 to the extent not utilized.
The tax credit carryforward amount is primarily comprised of alternative minimum tax credits which can be utilized to reduce regular tax liabilities and may be carried forward indefinitely. The remaining credits expire from 1998 to 2010.
Total deferred tax assets and deferred tax liabilities were as follows:

(IN THOUSANDS) 1995 1994 1993 ------ ~~Deferred tax assets $ 281,392 $ 182,078 $ 176,202 Deferred tax liabilities (188,776) (219,441) (199,453) ------$ 92,616 $ (37,363) $ (23,251) ------~~
The Company remains contingently liable with respect to certain tax credits sold with recourse by Flexi-Van Corporation ("Flexi-Van"), the Company's former transportation equipment leasing business, to a third party in 1981. These credits, which have been contested by the Internal Revenue Service, continue to be litigated by Flexi-Van. Flexi-Van, which separated from the Company in 1987 and was subsequently acquired by David H. Murdock, has indemnified the Company against obligations that might result from the resolution of this matter.
NOTE 14 - GEOGRAPHICAL AREA SEGMENT INFORMATION
The Company's only significant segment of business is food products. Revenue, operating income and identifiable assets pertaining to the geographic areas in which the Company operates are presented below. Product transfers between geographic areas are accounted for based on the estimated fair market value of the products.

(IN MILLIONS) 1995 1994 1993 ------ Revenue North America $1,959 $1,933 $1,890 Latin America 771 677 640 Asia 914 842 700 Europe 959 777 577 Intercompany elimination (799) (730) (699) ------$3,804 $3,499 $3,108 ------Operating Income North America $ 72 $ (8) $ 39
Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Latin America 138 131 62 Asia 14 16 77 Europe 3 13 - Corporate (34) (14) (11) Cost reduction program - - (43) ------$ 193 $ 138 $ 124 ------Identifiable Assets North America $ 973 $1,065 $1,043 Latin America 698 776 707 Asia 327 332 266 Europe 339 339 211 Corporate 105 107 110 ------2,442 2,619 2,337 Net assets held for distribution - 1,066 822 ------$2,442 $3,685 $3,159 ------
NOTES: REVENUE INCLUDES INTER-AREA TRANSFERS FROM LATIN AMERICA TO NORTH AMERICA, ASIA AND EUROPE OF $514 MILLION, $444 MILLION AND $418 MILLION IN 1995, 1994 AND 1993, RESPECTIVELY; FROM ASIA TO NORTH AMERICA AND EUROPE OF $184 MILLION, $190 MILLION AND $227 MILLION IN 1995, 1994 AND 1993, RESPECTIVELY; FROM NORTH AMERICA TO ASIA AND EUROPE OF $72 MILLION, $77 MILLION AND $38 MILLION IN 1995, 1994 AND 1993, RESPECTIVELY; AND FROM EUROPE TO NORTH AMERICA, ASIA AND LATIN AMERICA OF $29 MILLION, $19 MILLION AND $16 MILLION IN 1995, 1994 AND 1993, RESPECTIVELY.
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).
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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 ------
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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 $28 3/8 $24 Second Quarter 28 1/4 30 3/4 Third Quarter 35 28 1/2 Fourth Quarter 38 33 1/2 ------Year $38 $24 ------1994 First Quarter $35 1/2 $26 3/8 Second Quarter 34 1/2 26 1/8 Third Quarter 30 3/4 26 1/4 Fourth Quarter 28 3/8 22 1/2 ------Year $35 1/2 $22 1/2 ------
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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
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 corporation) and subsidiaries as of December 30, 1995 and December 31, 1994, and the related consolidated statements 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 examining, 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.
/s/ Arthur Andersen LLP
Los Angeles, California
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33
DOLE FOOD COMPANY, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL POSITION
1995 COMPARED WITH 1994 -
REVENUE - Consolidated revenue from continuing operations increased 9% over the prior year, from $3.5 billion for 1994 to $3.8 billion for 1995 and increased 14% compared to 1994, excluding revenues from the recently sold worldwide juice and juice beverage business. Growth in existing product lines, increases in worldwide banana revenues, and temporary market conditions for the fresh vegetable business resulting from the March 1995 California floods are primarily attributable for the increases in revenue.
SELLING, MARKETING AND ADMINISTRATIVE EXPENSES - Selling, marketing and administrative expenses from continuing operations were $393 million or 10% of sales for 1995 compared to $395 million or 11% of sales for 1994. The decrease in expense was primarily due to the sale of the worldwide juice and juice beverage business in the second quarter of 1995, offset by business expansions and acquisitions.
OPERATING INCOME - Consolidated operating income from continuing operations increased 40% to $193 million in 1995 compared to $138 million in 1994. Higher earnings in 1995 were primarily related to improvements in the worldwide banana markets, particularly in the Pacific Rim, and the fresh vegetable business which profited from temporary market conditions resulting from the March 1995 California floods. The fresh and processed pineapple and the value-added, pre-cut salad businesses also posted improved results in 1995, partially offset by lower results for dried fruit and nuts.
During the second quarter of 1995, the sale of the Company's worldwide juice and juice beverage business was completed, resulting in a pretax gain of approximately $145 million. Revenues related to this business totaled approximately $300 million in 1994. In addition, during the second quarter of 1995, the Company began to implement its plans to sell certain of its agricultural properties and other assets which have generated low returns. Sales agreements have been entered into with respect to certain assets, and sales efforts are proceeding with respect to the others. The book value of the assets to be sold exceeded the estimated fair value less costs to sell, and resulted in an adjustment of $83 million in the second quarter of 1995. The gain on the sale of the beverage business, net of adjustments related to the planned disposal of assets, resulted in a net pretax gain of $62 million and an increase in the Company's estimated 1995 annualized income tax rate from 23% to 32%. The sale of the juice business and the planned sale of agricultural properties and other assets are not expected to have a significant impact on the Company's continuing operating income levels.
The European Union ("E.U.") banana regulations which impose quotas and tariffs on bananas remained in full effect in 1995, and continue in effect in 1996. Trade negotiations and discussions continue between the E.U., the United States and the individual banana exporting countries. These trade negotiations could lead to further changes in the regulations governing banana exports to the E.U. The net impact of these changing regulations on the Company's future results of operations is not determinable at this time.
The Company distributes its products in more than 90 countries throughout the world. Its international sales are usually transacted in U.S. dollars and major European and Asian currencies, while certain costs are incurred in currencies different from those that are received from the sale of the product. Results of operations may be affected by fluctuations of currency exchange rates in both the sourcing and selling locations. The overall net impact of foreign currency fluctuations was immaterial to the results of operations in 1995 and 1994.
INTEREST EXPENSE, NET - Interest expense, net of interest income, increased to $74 million in 1995 from $67 million in 1994, due to higher interest rates, offset by slightly lower average debt levels.
INCOME TAXES - The Company's effective income tax rate increased to 32% in 1995 from 15% in 1994, primarily as a result of a change in the mix of
Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document domestic and foreign earnings impacted by the non-recurring net gain on the sale of the Company's worldwide juice and juice beverage business in the second quarter of 1995.
DISCONTINUED OPERATIONS - The Company reported a $97 million or $1.61 per share loss from discontinued
34
operations for 1995. The loss from discontinued operations includes distribution expenses of $3 million, net of tax, and a write-down to certain real estate and resort properties of $104 million, net of tax. During 1995, the Company reviewed certain of its real estate and resort properties to determine, in accordance with generally accepted accounting principles, whether expected future cash flows (undiscounted and without interest charges) from each property would result in the recovery by the Company of the carrying amount of such property. Certain adverse developments affecting the Lana'i resort properties which occurred subsequent to the Company's 1994 fiscal year end caused management to substantially lower its estimate of that future cash flow and led to a determination that the Lana'i resort properties were impaired as defined by generally accepted accounting principles. In accordance with Statement of Financial Accounting Standards No. 121 "Accounting for the Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed of ("SFAS 121"), an impairment loss of $104 million after tax was recorded as part of discontinued operations in the accompanying statements of income for 1995 for the difference between the carrying value and the fair value of the Lana'i resort properties and certain other residential properties.
NEW ACCOUNTING PRONOUNCEMENT - In October 1995 the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based Compensation" ("SFAS 123"). The Company has elected to adopt the disclosure requirements of SFAS 123 when the adoption is required in 1996. As a result, SFAS 123 will have no effect on the financial condition or results of operations of the Company. The provisions of SFAS 123 are more fully described in the Notes to Consolidated Financial Statements.
1994 COMPARED WITH 1993 -
REVENUE - Consolidated revenue from continuing operations for 1994 increased $390 million, or 13% over the prior year, reaching $3.5 billion compared to $3.1 billion for 1993. This increase was primarily attributable to new businesses acquired and to expansions of existing product lines.
SELLING, MARKETING AND ADMINISTRATIVE EXPENSES - Selling, marketing and administrative expenses from continuing operations increased from $333 million in 1993 to $395 million in 1994, largely due to the effects of acquired businesses as well as additional promotions and marketing programs for the value-added and processed pineapple operations.
OPERATING INCOME - Consolidated operating income from continuing operations totaled $138 million in 1994 and $166 million in 1993 before the 1993 pretax charge of $43 million for the Company's cost reduction program. Worldwide banana results increased in 1994 despite the weak Pacific Rim banana market which resulted from a continued oversupply of product. The E.U. banana regulations which impose quotas and tariffs on bananas were in full effect in 1994 and continued to be in effect in 1995.
The improvement in banana earnings was offset by declines in other food operations. The fresh vegetable group reported lower results in 1994 primarily due to poor market conditions for lettuce and celery which existed for the first three quarters of the year. Results for processed pineapple were also lower in 1994 compared to 1993, although price pressures resulting from heavy industry supplies experienced in the prior year and for most of 1994 began to improve at the end of 1994. Lower operating income in 1994 was also attributable to the dried fruit and nuts operations. In addition, operating income for 1993 included a pretax gain of approximately $9 million related to the sale of the Company's interest in the California and Hawaiian Sugar Company.
INTEREST EXPENSE, NET - Interest expense, net of interest income, from continuing operations increased to $67 million in 1994 from $48 million in 1993, primarily attributable to higher average debt levels and higher interest rates.
OTHER EXPENSE, NET - Other expense decreased in 1994, primarily as a result of lower minority interest expense due to a smaller minority share at the Company's Latin American beverage operation and lower earnings for the Company's citrus operations.
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INCOME TAXES - The Company's effective income tax rate increased to 15% for 1994 from 5% for 1993, primarily as a result of a change in the mix of domestic and foreign earnings.
LIQUIDITY AND CAPITAL RESOURCES
Operations in 1995 provided strong, positive cash flow which, along with proceeds from divestitures of certain businesses and assets, was used to reduce the Company's debt level. Total debt (net of cash and short-term investments) was $847 million at December 30, 1995 reduced from $1.563 billion at December 31, 1994. Cash and short-term investments totaled $72 million at December 30, 1995 compared to $45 million at December 31, 1994.
Operating activities from continuing operations generated $235 million of positive cash flow for 1995 compared to $114 million in 1994. The increase was primarily attributable to significant net working capital improvements and improved operating results.
Cash flow from investing activities, which reflected the divestiture of certain businesses and agricultural properties, totaled $308 million in 1995. During the second quarter of 1995, the Company completed the sale of its worldwide juice and juice beverage business. Net proceeds from the sale were $270 million. In addition, the Company entered into the sale and leaseback of certain vessels which generated net proceeds of $133 million. Also during 1995, the Company divested its pistachio 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 outstanding bank indebtedness. Additional consideration included issuance to the Company of 3,500 shares of cumulative preferred stock which was sold to third parties for $35 million.
The Company significantly reduced its debt level in 1995. The Company has a $1 billion revolving credit agreement ("the Facility") for a five-year term. At the Company's option, borrowings under the Facility bear interest at a certain percentage over the agent's prime rate or the London Interbank Offered Rate ("LIBOR"). At December 30, 1995, the Company had net borrowings outstanding of $81 million under the Facility. The Company also borrows under uncommitted lines of credit at rates offered from time to time by various banks that may or may not be lenders under the Facility. At December 30, 1995, net borrowings under the uncommitted lines of credit totaled approximately $89 million, with a weighted average interest rate of 6.1%. As discussed in the Notes to Consolidated Financial Statements, the Company also has outstanding at December 30, 1995, $700 million of public unsecured notes, which were issued in 1993. These notes bear interest at 6.75%, 7% and 7.875% and mature in years 2000, 2003 and 2013.
Capital expenditures totaled $90 million in 1995 compared to $212 million in 1994. The 1995 expenditures were invested in various business expansions, infrastructure improvements and modernization of existing facilities.
During 1995, the Company acquired various food operations, primarily located in Europe, for an aggregate cash purchase price of $35 million.
The Company paid four quarterly dividends of 10 cents per share on its common stock totaling $24 million in 1995.
36
Dole Food Company, Inc.
RESULTS OF OPERATIONS AND SELECTED FINANCIAL DATA

(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 ------
Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 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 (.04) (.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
DIRECTORS AND OFFICERS DOLE FOOD COMPANY, INC.
DOLE FOOD COMPANY, INC. DOLE FOOD COMPANY, INC. DOLE FOOD COMPANY DIRECTORS OFFICERS OPERATING DIVISION OFFICERS
Elaine L. Chao(2) 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 Chairman(1,3) 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. Gary (1,2,3) Michael S. Karsner President-Dole Fresh Vegetables Chairman Emeritus Vice President-Chief Financial Officer Pacific Resources, Inc. and Treasurer Gregory L. Costley (international energy and President-Dole North America Fruit holding company) Patricia A. McKay Vice President-Finance and Controller Roberto Zacarias Richard M. Ferry (3) President-Dole Honduran Beverage President and Director Patrick A. Nielson Korn/Ferry International, Inc. Vice President-International Legal and (international executive search firm) Regulatory Affairs
Frank J. Hata(2) Thomas J. Pernice Chairman Vice President-Public Affairs Y. Hata & Co. (wholesale food business) J. Brett Tibbitts President Vice President-Corporate General Diversified Distributor, Inc. Counsel and Corporate Secretary
Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (public warehouse company) Roberta Wieman David H. Murdock(1) Vice President Chairman of the Board and Chief Executive Officer Dole Food Company, Inc.
(1) EXECUTIVE, FINANCE AND NOMINATING COMMITTEE (2) AUDIT COMMITTEE (3) COMPENSATION AND EMPLOYEE BENEFITS COMMITTEE
38
DOLE FOOD COMPANY, INC.
COMPANY AND SHAREHOLDER INFORMATION
THE COMPANY
Founded in Hawaii in 1851, Dole Food Company, Inc. is the world's largest producer and marketer of fresh fruits and vegetables, and markets a growing line of packaged foods. The Company does business in more than 90 countries and employs approximately 43,000 full-time people worldwide.
CORPORATE HEADQUARTERS 31355 Oak Crest Drive Westlake Village, CA 91361 (818) 879-6600
AUDITORS Arthur Andersen LLP 633 West Fifth Street Los Angeles, CA 90071
SECURITIES TRANSFER AGENT The First National Bank of Boston P.O. Box 644 Boston, MA 02102 (800) 733-5001
SHAREHOLDER INQUIRIES Shareholders and members of the investment industry should direct inquiries to: Office of the Corporate Secretary Dole Food Company, Inc. 31365 Oak Crest Drive Westlake Village, CA 91361 (818) 879-6600
FORM 10-K A copy of Dole Food Company, Inc.'s Form 10-K, a corporate operational and financial report filed annually with the Securities and Exchange Commission, is available upon request without charge.
STOCK EXCHANGE Dole Food Company, Inc.'s common stock (DOL) is traded on the New York and Pacific Stock Exchanges.
INTERNET ADDRESS http:\\www.dole5aday.com
Dole-Registered Trademark- is a registered trademark of Dole Food Company, Inc. -C- 1996 Dole Food Company, Inc. All rights reserved.
Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document EXHIBIT 22
SUBSIDIARIES OF DOLE FOOD COMPANY, INC.
There are no parents of the Registrant.
Registrant's consolidated subsidiaries are shown below together with the percentage of voting securities owned and the state or jurisdiction of organization of each subsidiary. The names have been omitted for subsidiaries which, if considered in the aggregate as a single subsidiary, do not constitute a significant subsidiary. Subsidiaries of subsidiaries are indented in the following table:
Percent of Outstanding Voting Securities Owned as of Subsidiaries of Registrant December 30, 1995 ------
Castle & Cooke Fresh Fruit Company 100% (Nevada)
Beebe Orchard Company 100% (Delaware)
Dole Citrus 100% (California)
Dole Fresh Fruit Company 100% (Nevada)
Dole Europe Company 100% (Delaware)
Dole Fresh Fruit Europe Ltd. & Co. 100% (Federal Republic of Germany)
Dole Fresh Fruit International, Inc. 100% (Panama)
Standard Fruit Company 100% (Delaware)
Cerveceria Hondurena, S.A. 80% (Honduras)
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Percent of Outstanding Voting Securities Owned as of Subsidiaries of Registrant December 30, 1995 ------
Castle & Cooke Fresh Fruit Company (cont'd)
Standard Fruit Company de Costa Rica, S.A. 100% (Costa Rica)
Standard Fruit and Steamship Company 100% (Delaware)
Wells & Wade Fruit Company 100% (Washington)
Castle & Cooke Worldwide Limited 100% (Hong Kong)
Dole Fresh Fruit International, Limited 100% (Liberia)
Solvest, Ltd. 100% (Bermuda)
Standard Fruit de Honduras, S.A. 100% (Honduras)
Dole Europe B.V. 100% (Netherlands)
Soleil Holding France S.A. 100% (France)
Saman, S.A. 100% (France)
Dole Chile S.A. 100% (Chile)
2
Percent of
Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Outstanding Voting Securities Owned as of Subsidiaries of Registrant December 30, 1995 ------
Castle & Cooke Worldwide Limited (cont'd)
Dole Thailand Limited 64% (Thailand)
Compania Financiera de Costa Rica, S.A. 100% (Costa Rica)
Dole Bakersfield, Inc. 100% (California)
Dole Fresh Vegetables, Inc. 100% (California)
Bud Antle, Inc. 100% (California)
Dole Carrot Company 100% (California)
Royal Packing Co. 100% (California)
Dole Japan, Ltd. 100% (Japan)
Dole Land Company, Inc. 100% (Hawaii)
Dole Philippines, Inc. 99% (Republic of the Philippines)
Earlibest Orange Association, Inc. 100% (California)
3
Percent of Outstanding Voting Securities Owned as of Subsidiaries of Registrant December 30, 1995
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S & J Ranch, Inc. 100% (California)
Dole Nut Company 100% (California)
M K Development, Inc. 100% (Hawaii)
Dole Dried Fruit and Nut Company, a California general partnership 100%
La Petite d'Agen, Inc. 100% (Hawaii)
Castle & Cooke Homes, Inc. 61% (Hawaii)
Muscat, Inc. 100% (Hawaii)
Calicahomes, Inc. 100% (California)
Castle & Cooke Land Company, Inc. 100% (Hawaii)
Zante Currant, Inc. 100% (Hawaii)
Castle & Cooke Communities, Inc. 100% (Hawaii)
Castle & Cooke Bakersfield Holdings, Inc. 100% (Delaware)
Calazo Corporation 100% (Arizona)
4
Percent of Outstanding Voting Securities Owned as of
Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Subsidiaries of Registrant December 30, 1995 ------
Castle & Cooke Communities, Inc. (cont'd)
Castle & Cooke Homes, Inc. 39% (Hawaii)
Castle & Cooke Homes, Inc. 100% (California)
Castle & Cooke Sierra Vista, Inc. 100% (California)
Lindero Property, Inc. 100% (California)
Malaga Company, Inc. 100% (California)
Waialua Sugar Company, Inc. 100% (Hawaii)
5
Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document CONSENT OF INDEPENDENT OF PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of our reports dated February 5, 1996 included (or incorporated by reference) in this Form 10-K into Dole Food Company, Inc.'s previously filed Registration Statements on Form S-3 Registration Nos. 33-41480 and 33-64984 and Form S-8 Registration Nos. 2-87475, 33-594, 33-28782, 33-60643, 33-60641 and 33-42152.
/s/ ARTHUR ANDERSEN LLP
Los Angeles, California February 5, 1996
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5 1,000
12-MOS DEC-30-1995 JAN-1-1995 DEC-30-1995 72,151 0 374,441 46,994 559,660 1,137,201 1,571,183 554,192 2,442,192 656,890 895,998 0 0 320,497 187,938 2,442,192 3,803,846 3,803,846 3,217,869 3,217,869 0 16,708 81,186 175,824 56,000 119,824 (96,493) 0 0 23,331 0.39 0.39 THE COMPANY'S FISCAL YEAR ENDS ON THE SATURDAY CLOSEST TO DECEMBER 31. FISCAL YEAR 1995 CONSISTED OF 52 WEEKS AND ENDED ON DECEMBER 30, 1995. ALL QUARTERS IN 1995 HAVE 12 WEEKS, EXCEPT THE THIRD QUARTER OF 1995 WHICH HAS 16 WEEKS. INCLUDES TRADE RECEIVABLES ONLY.
~~Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document INCLUDES AMOUNTS RELATED TO TRADE RECEIVABLES AND CURRENT NOTES RECEIVABLE.~~

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