Fresh Del Monte Produce Inc. (FDP) 2004年年度報告「NYSE」.pdf

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1、FRESH DEL MONTE PRODUCE INC.U.S.Executive Offices241 Sevilla Avenue Coral Gables,FL 33134305-520-8400 Phone305-567-0320 FFRESH DEL MONTE PRODUCE INC.2004 Annual ReportF R E S H D E L M O N T E P R O D U C E I N C.A N D S U B S I D I A R I E S FRESH DEL MONTE PRODUCE INC.2004 Annual ReportFRESH DEL M

2、ONTE PRODUCE INC.Fresh Del Monte Produce Inc.is one of the worlds leading vertically integrated producers,marketers and distributors of high-quality fresh and fresh-cut fruit and vegetables,as well as a leading producer and distributor of prepared fruit and vegetables,juices,beverages,snacks and des

3、serts in Europe,the Middle East and Africa.Fresh Del Monte markets its fresh products worldwide under the Del Monte brand,a symbol of product quality,freshness and reliability since 1892.Fresh Del Monte holds premier market positions in several product categories.The Company is the leading marketer

4、of fresh whole pineapples in the world,the top marketer of branded melons in the United States and the United Kingdom,the worlds third largest marketer of bananas,the leading year-round marketer of branded grapes in North America,and the premier repacker of branded tomatoes in North America.In addit

5、ion,Fresh Del Monte is the leading internationally branded marketer in the value-added,fresh-cut fruit and vegetable market,which is one of the fresh produce segments fastest grow-ing categories.In 2004,the Company completed the acquisition of Del Monte Foods Europe,giving Fresh Del Monte several ad

6、ded distinctions,including that of the leading marketer of juice in the United Kingdom,and the leading marketer of prepared pineapple and fruit in the United Kingdom,Italy,and Benelux countries.Fresh Del Monte Produce Inc.is a global company with$2.9 billion in sales in 2004 and 35,000 employees.The

7、 Companys ordinary shares are traded on the New York Stock Exchange under symbol FDP.Stock InformationNew York Stock ExchangeSymbol:FDPDividend InformationThe Company currently pays a regular quarterly cash dividend of$0.20 per share.The dividend is paid to shareholders who hold shares on the record

8、 date.Shareholders of RecordAs of December 31,2004,there were 57,690,074 ordinary shares outstanding.We believe that approximately 42 percent of the outstanding ordinary shares are held by shareholders in the United States.Forward-Looking StatementsOur Annual Report may discuss future performance of

9、 the Company.Comments about expectations,plans and prospects constitute forward-looking statements for the purposes of the Safe Harbor provisions of the Private Securities Litigation Reform Act.Actual results may differ materially from those contemplated in any forward-looking statements,and the Com

10、pany undertakes no obligation to update any such statements.Risk factors are identi-fied in the Companys December 31,2004 Form 20-F/A on file at the Securities and Exchange Commission.Corporate and Shareholder InformationCorporate and shareholder information and a copy of the Companys Annual Report

11、on Form 20-F/A,(which includes the officer certifications required by Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 and the significant corporate governance difference required by Section 303A.11 of the NYSE Listed Company Manual)as filed with the Securities and Exchange Commission,may be o

12、btained free of charge by contacting Christine Cannella,Assistant Vice President,Investor Relations at Fresh Del Monte Produce Inc.,U.S.Executive Offices,C/O Del Monte Fresh Produce Company,P.O.Box 149222,Coral Gables,FL 33114,305-520-8400 or by visiting the Companys Web site at .Transfer Agent and

13、RegistrarMellon Investor Services LLC85 Challenger RoadRidgefield Park,NJ 07660-2108800-851-9677http:/ AuditorsErnst&Young LLP200 South Biscayne Blvd.Suite 3900Miami,FL 33131Annual MeetingApril 27,2005,at 11:30 a.m.Hyatt Regency Coral Gables50 Alhambra PlazaCoral Gables,FL 33134N E T S A L E SIn mil

14、lions$2,906 2004$2,487 2003$2,091 2002$1,928 2001$1,859 2000O P E R AT I N G C A S H F L O WIn millions$157 2004$264 2003$308 2002$228 2001$99 2000Year ended20042003Select Consolidated Statements of Income Data Net sales$2,906.0$2,486.8 Gross profit264.7328.2 Operating income128.3 220.4 Net income$1

15、39.2$226.4 Per share net income:Basic$2.42$4.00 Diluted$2.41$3.95 Weighted average number of ordinary shares outstanding:Basic57,487,13156,539,691 Diluted57,803,15857,346,377Balance Sheet and Cash Flow Data Cash and cash equivalents$42.1$51.0 Working capital299.9143.1 Total assets2,058.01,491.2 Tota

16、l debt363.543.5 Shareholders equity1,069.2942.2 Cash flow from operations$157.0$264.0(U.S.dollars in millions,except per share data)designed by curran&connors,inc./www.curran- OfficersMohammad Abu-GhazalehChairman and Chief Executive OfficerHani El-NaffyPresident and Chief Operating OfficerJohn F.In

17、serraExecutive Vice President and Chief Financial OfficerBryce EdmonsonSenior Vice PresidentNorth America Sales and Product ManagementJean-Pierre BartoliSenior Vice PresidentFresh(Europe,Africa and the Middle East)David J.AndersonVice PresidentAsia-PacificJos Antonio YockSenior Vice PresidentCentral

18、 AmericaJose Luis BendichoVice PresidentSouth AmericaSergio MancillaSenior Vice PresidentShipping OperationsThomas R Young,Ph.D.Vice PresidentResearch,Development and Agricultural ServicesBruce A.JordanVice PresidentGeneral Counsel and SecretaryMarissa R.TenazasVice PresidentHuman ResourcesAntolin D

19、.SaizVice PresidentInternal AuditDirectorsMohammad Abu-GhazalehChairman and Chief Executive OfficerFresh Del Monte Produce Inc.Hani El-NaffyPresident and Chief Operating OfficerFresh Del Monte Produce Inc.Amir Abu-GhazalehGeneral ManagerAbu-Ghazaleh International CompanyMaher Abu-GhazalehManaging Di

20、rectorSuma International General Trading and Contracting CompanySalvatore H.Alfiero(2)(3)Founder,Chairman and Chief Executive Officer Protective Industries,LLC Also serves on the Boards of The Phoenix Companies,HSBC Bank USA,HSBC Bank North America and Southwire CompanyEdward L.Boykin(1)(3)Consultan

21、t and Former Partner,Deloitte&Touche LLP Also serves on the Board of Blue Cross and Blue Shield of Florida,Inc.John H.Dalton(1)(2)President of the Housing Policy Council of theFinancial Services Roundtable Also serves on the Boards of Trans Technology,Inc.,eSpeed,Inc.,and IPG Photonics CorporationKa

22、thryn E.Falberg(1)(2)Former Chief Financial Officer of Amgen Also serves on the Board of Human Genome Sciences(1)Member of the Audit Committee(2)Member of the Compensation Committee(3)Committee Chairman$328 2003$337 2002$283 2001$167 2000G R O S S P R O F I TIn millions$265 2004F R E S H D E L M O N

23、 T E P R O D U C E I N C.A N D S U B S I D I A R I E S FRESH DEL MONTE PRODUCE INC.Fresh Del Monte Produce Inc.is one of the worlds leading vertically integrated producers,marketers and distributors of high-quality fresh and fresh-cut fruit and vegetables,as well as a leading producer and distributo

24、r of prepared fruit and vegetables,juices,beverages,snacks and desserts in Europe,the Middle East and Africa.Fresh Del Monte markets its fresh products worldwide under the Del Monte brand,a symbol of product quality,freshness and reliability since 1892.Fresh Del Monte holds premier market positions

25、in several product categories.The Company is the leading marketer of fresh whole pineapples in the world,the top marketer of branded melons in the United States and the United Kingdom,the worlds third largest marketer of bananas,the leading year-round marketer of branded grapes in North America,and

26、the premier repacker of branded tomatoes in North America.In addition,Fresh Del Monte is the leading internationally branded marketer in the value-added,fresh-cut fruit and vegetable market,which is one of the fresh produce segments fastest grow-ing categories.In 2004,the Company completed the acqui

27、sition of Del Monte Foods Europe,giving Fresh Del Monte several added distinctions,including that of the leading marketer of juice in the United Kingdom,and the leading marketer of prepared pineapple and fruit in the United Kingdom,Italy,and Benelux countries.Fresh Del Monte Produce Inc.is a global

28、company with$2.9 billion in sales in 2004 and 35,000 employees.The Companys ordinary shares are traded on the New York Stock Exchange under symbol FDP.Stock InformationNew York Stock ExchangeSymbol:FDPDividend InformationThe Company currently pays a regular quarterly cash dividend of$0.20 per share.

29、The dividend is paid to shareholders who hold shares on the record date.Shareholders of RecordAs of December 31,2004,there were 57,690,074 ordinary shares outstanding.We believe that approximately 42 percent of the outstanding ordinary shares are held by shareholders in the United States.Forward-Loo

30、king StatementsOur Annual Report may discuss future performance of the Company.Comments about expectations,plans and prospects constitute forward-looking statements for the purposes of the Safe Harbor provisions of the Private Securities Litigation Reform Act.Actual results may differ materially fro

31、m those contemplated in any forward-looking statements,and the Company undertakes no obligation to update any such statements.Risk factors are identi-fied in the Companys December 31,2004 Form 20-F/A on file at the Securities and Exchange Commission.Corporate and Shareholder InformationCorporate and

32、 shareholder information and a copy of the Companys Annual Report on Form 20-F/A,(which includes the officer certifications required by Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 and the significant corporate governance difference required by Section 303A.11 of the NYSE Listed Company Ma

33、nual)as filed with the Securities and Exchange Commission,may be obtained free of charge by contacting Christine Cannella,Assistant Vice President,Investor Relations at Fresh Del Monte Produce Inc.,U.S.Executive Offices,C/O Del Monte Fresh Produce Company,P.O.Box 149222,Coral Gables,FL 33114,305-520

34、-8400 or by visiting the Companys Web site at .Transfer Agent and RegistrarMellon Investor Services LLC85 Challenger RoadRidgefield Park,NJ 07660-2108800-851-9677http:/ AuditorsErnst&Young LLP200 South Biscayne Blvd.Suite 3900Miami,FL 33131Annual MeetingApril 27,2005,at 11:30 a.m.Hyatt Regency Coral

35、 Gables50 Alhambra PlazaCoral Gables,FL 33134N E T S A L E SIn millions$2,906 2004$2,487 2003$2,091 2002$1,928 2001$1,859 2000O P E R AT I N G C A S H F L O WIn millions$157 2004$264 2003$308 2002$228 2001$99 2000Year ended20042003Select Consolidated Statements of Income Data Net sales$2,906.0$2,486

36、.8 Gross profit264.7328.2 Operating income128.3 220.4 Net income$139.2$226.4 Per share net income:Basic$2.42$4.00 Diluted$2.41$3.95 Weighted average number of ordinary shares outstanding:Basic57,487,13156,539,691 Diluted57,803,15857,346,377Balance Sheet and Cash Flow Data Cash and cash equivalents$4

37、2.1$51.0 Working capital299.9143.1 Total assets2,058.01,491.2 Total debt363.543.5 Shareholders equity1,069.2942.2 Cash flow from operations$157.0$264.0(U.S.dollars in millions,except per share data)designed by curran&connors,inc./www.curran- OfficersMohammad Abu-GhazalehChairman and Chief Executive

38、OfficerHani El-NaffyPresident and Chief Operating OfficerJohn F.InserraExecutive Vice President and Chief Financial OfficerBryce EdmonsonSenior Vice PresidentNorth America Sales and Product ManagementJean-Pierre BartoliSenior Vice PresidentFresh(Europe,Africa and the Middle East)David J.AndersonVice

39、 PresidentAsia-PacificJos Antonio YockSenior Vice PresidentCentral AmericaJose Luis BendichoVice PresidentSouth AmericaSergio MancillaSenior Vice PresidentShipping OperationsThomas R Young,Ph.D.Vice PresidentResearch,Development and Agricultural ServicesBruce A.JordanVice PresidentGeneral Counsel an

40、d SecretaryMarissa R.TenazasVice PresidentHuman ResourcesAntolin D.SaizVice PresidentInternal AuditDirectorsMohammad Abu-GhazalehChairman and Chief Executive OfficerFresh Del Monte Produce Inc.Hani El-NaffyPresident and Chief Operating OfficerFresh Del Monte Produce Inc.Amir Abu-GhazalehGeneral Mana

41、gerAbu-Ghazaleh International CompanyMaher Abu-GhazalehManaging DirectorSuma International General Trading and Contracting CompanySalvatore H.Alfiero(2)(3)Founder,Chairman and Chief Executive Officer Protective Industries,LLC Also serves on the Boards of The Phoenix Companies,HSBC Bank USA,HSBC Bank

42、 North America and Southwire CompanyEdward L.Boykin(1)(3)Consultant and Former Partner,Deloitte&Touche LLP Also serves on the Board of Blue Cross and Blue Shield of Florida,Inc.John H.Dalton(1)(2)President of the Housing Policy Council of theFinancial Services Roundtable Also serves on the Boards of

43、 Trans Technology,Inc.,eSpeed,Inc.,and IPG Photonics CorporationKathryn E.Falberg(1)(2)Former Chief Financial Officer of Amgen Also serves on the Board of Human Genome Sciences(1)Member of the Audit Committee(2)Member of the Compensation Committee(3)Committee Chairman$328 2003$337 2002$283 2001$167

44、2000G R O S S P R O F I TIn millions$265 2004Positioned in Growth MarketsNet Sales in 2004PA G E O N ENORTH AMERICAEUROPEASIA-PACIFICOTHER MARKETSPA G E T WO FRESH DEL MONTE PRODUCE INC.AND SUBSID I A R I E S PAGE THREEIn todays fast-paced world,consumers want convenient,ready-to-eat food that meets

45、 the nutritional demands of their healthy,active lifestyles.Thats why smart shoppers are increasingly turning to the nourishing,high-quality Del Monte branded products provided by Fresh Del Monte Produceand to the supermarkets and quick-service suppliers who offer them.These shoppers have come to re

46、cognize that Fresh Del Monte provides them with much more than just fresh and fresh-cut fruit and vegetables.The fact is,we give them the natural fuel they need in a variety of delicious and wholesome ways.We like to think of it as providing them with.Another Fresh Start to a Healthy DaySlices of li

47、fePA G E F OUR FRESH DEL MONTE PRODUCE INC.AND SUBSI D I A R I E S TO OUR FELLOW SHAREHOLDERS:Mohammad Abu-GhazalehChairman and Chief Executive OfficerPA G E F I V EOne of the clearest measures of a companys success is its ability to generate solid per-formance in a difficult environmenta task at wh

48、ich Fresh Del Monte Produce Inc.has consistently excelled.In 2004,we continued to showcase this ability,marshalling our core competencies of discipline,experience,focus,planning and innovation to combat the years many challenges,while fueling our progress and accelerating our growth.In the process,w

49、e came closer to realizing our primary vision:to become the leading global supplier of healthful,wholesome and nutritious fresh and prepared foods and beverages to consumers of all ages.Accelerating Global GrowthAcquisitions are important to Fresh Del Montes growth strategy,and in October 2004 we co

50、mpleted the largest and most significant acquisition in our history:that of Del Monte Foods Europe,a vertically integrated producer and distributor of prepared fruit and vegetables,juices,beverages,snacks and desserts.This transaction,which we funded with our existing cash and revolving credit facil

51、ity,propelled Fresh Del Monte to the status of a multinational food company with an even more diverse product line.At the same time,we consolidated the Del Monte brand in key regions,fortified our competitive position in Europe,raised our profile with retailers,and enhanced our ability to sell our b

52、randed products in more than 100 markets in Europe,the Middle East and Africa.Once the transaction was complete,we immediately began to integrate the two companies,drawing on Fresh Del Montes proven skills to advance toward finalizing this task in an efficient,value-driven way.Our first initiatives

53、were to restructure Del Monte Foods Europe,strengthening its management team and merging its operations with those of Del Monte Fresh Produce in the United Kingdom,Germany,Belgium and South Africa.We then began to introduce Del Monte Foods Europes prepared product lines through our European distribu

54、tion center network.We also started to seek cost savings by driving efficiencies in freight and logistics,raw materials and packaging,administration,supply chain and purchasing,selling,marketing,and distribution.SHAREHOLDERS LETTER(continued)PA G E S IX FRESH DEL MONTE PRODUCE INC.AND SUBSID I A R I

55、 E S Our next initiative was to position each company to benefit from one anothers strong customer relationships to cross-market our products and identify new revenue opportunities.This initiative prompted us to develop innovative sales plans with major retailers in various countries.In addition,in

56、countries where we have both fresh and prepared foods operations,we undertook ambitious efforts to cross-merchandise fresh products to supermarkets that once carried only our prepared foods,and to market prepared foods to our fresh produce customers.We also took advantage of our 2003 acquisition of

57、Expans,a leading Polish distributor of fresh fruit and vegetables,to market prepared foods in Poland.Our efforts to integrate Del Monte Foods Europe and capture synergies have already been highly rewarding,and by year-end 2004,the acquisition had contributed$88.8 million in revenue and benefited ear

58、nings.We are very pleased with the success of this acquisition,and we fully expect it to continue throughout 2005 and beyond.Controlling Our Supply ChainSupermarket and foodservice customers naturally gravitate to suppliers that deliver high-quality products cost effectively and in a timely manner.I

59、ndeed,these advantages are so vital to our large customers that managing all or part of our own supply chain is a crucial step to becoming one of their preferred suppliers.We believe that we are the leading vertically integrated company in our industry,and we are well-known for exert-ing strict cont

60、rol of our logistics.From the moment our produce is grown and picked to the time it is packed,transported by sea,trucked to our value-added distribution centers,and distributed to our customers,we closely monitor our supply chain to ensure that our products reach their destinations at the peak of qu

61、ality and freshness.Cost control is also a priority to our customers,and we regularly implement measures to ensure that our products are delivered as efficiently as possible.For example,over the last several years,we have carefully managed our shipping program,generating maximum utilization of our v

62、essels.We are now chartering a new type of ship that is easier and more efficient to unload,a move that will enable us to trim our fleet from 40 vessels to 31 in 2005.PA G E S E V E NPA G E E IGHT FRESH DEL MONTE PRODUCE INC.AND SUBS I D I A R I E S SHAREHOLDERS LETTER(continued)PA G E NI N EWe also

63、 strengthened our land-based logistics in North America by acquiring Can-Am Express,a national trucking company with a proven ability to orchestrate cost-effective transportation.This acquisition fortified our logistics platform by enabling us to provide new distribution services to our North Americ

64、an retail and foodservice customers at a time when the trucking industry is faced with a shortage of drivers and trucks.It also allowed us to control transportation costs,improve truck utilization,and ensure timely product delivery.We closed on the Can-Am Express acquisition in August,and we are now

65、 taking steps to expand our trucking fleet and provide third-party trucking services.Fostering Internal GrowthWhile growth through acquisition was our key focus in 2004,we also generated considerable internal growth by expanding our fresh-cut business.The fresh-cut business is developing rapidly ind

66、ustry-wide,due to rising worldwide demand from consumers seeking conve-nient,ready-to-eat products that reflect their active lifestyles.Supermarkets are responding to this demand by extending traditional fresh-cut shelf space to delis,meat departments,bakeries and highly visible“front of the store”d

67、isplays.Quick-service operators are also capitalizing on this demand by offering patrons fresh-cut fruit and vegetable assortments,accompanied by appealing dips.With an ever-increasing number of venues in which to offer our fresh-cut products,Fresh Del Monte set out in 2004 to solidify our leadershi

68、p in this segment and establish our Company as the preeminent fresh-cut supplier to retailers and quick-service opera-tors in North America.We formed new supply partnerships with a number of large grocer retailers,drug stores and convenience stores.We also forged a groundbreaking agreement with a le

69、ading quick-service operator to be the sole provider of Del Monte branded fresh-cut fruit to 6,300 of its outlets in the U.S.and Canadaa ringing endorsement of Fresh Del Montes ability to serve major accounts through our national distribution network.In addition,we broadened our fresh-cut operations

70、 in the United Kingdom,penetrating new markets and adding major retailers and foodservice operators SHAREHOLDERS LETTER(continued)PA G E T EN FRESH DEL MONTE PRODUCE INC.AND SUBSID I A R I E S to our customer base.Together,these efforts enabled us to boost our fresh-cut sales to$267.4 million in 200

71、4,compared with$214.0 million in 2003.We also fueled our internal growth by expanding our global,value-added,refrig-erated distribution center and fresh-cut network,including a new fresh-cut facility in Dallas,a new distribution center in Germany,and an expanded fresh-cut facility in the United King

72、dom.These centers and facilities position us to lower our distribution costs and deliver the value-added services that our customers want,from timely regional distribution to ripening,sorting,repacking,and just-in-time delivery.Propelling Product InnovationFresh Del Monte has had an unparalleled rep

73、utation for product innovation since 1996 when we launched the gold pineapple category with the introduction of our premium Del Monte Gold Extra Sweet pineapple.In 2004,we continued to pioneer new produce varieties and packaging concepts at our research and development facilities in California and C

74、osta Rica.We obtained a patent on our distinctive Del Monte Honey Gold pine-apple,and we made steady progress toward the rollout of commercial quantities of this exciting new product,which is slated for late 2006.We also began to test a new sweeter cantaloupe variety.This melon has an appealing colo

75、r and a ridged outer skin,and it boasts exceptional flavor and aroma,as well as a long shelf life.In addition,we adopted environmentally friendly,biodegradable packaging for select supermarket applications.Overcoming ChallengesIn conjunction with driving growth in 2004,we continued to focus on deliv

76、ering strong financial performance.Our expanded product line,combined with higher worldwide banana volumes and a favorable foreign exchange climate,enabled us to post record net sales,which,excluding the effect of our acquisition of Del Monte Foods Europe,increased 13 percent to$2.9 billion from$2.5

77、 billion at year-end 2003.However,we also faced a number of challenges during the year,including increased competition in gold pineapples,weak banana pricing in North America,plant disease and adverse PA G E E L E V E NPA G E T WELVE FRESH DEL MONTE PRODUCE INC.AND SUB S I D I A R I E S weather cond

78、itions in several markets,higher commodity costs,and nonrecurring customs duties.Though these pressures eased at least temporarily during the fourth quarter,they still curtailed our earnings.As a result,we reported a decline in 2004 net income to$139.2 million,compared with$226.4 million in 2003,and

79、 earnings per diluted share of$2.14,compared with$3.65 in 2003,excluding one-time benefits of$0.27 per share and$0.30 per share,respectively.As you know,we have always believed that investing in Fresh Del Monte is a long-term proposition.With this in mind,we maintain a highly positive long-range vie

80、w of our business.Our outlook stems from the extensive experience and insights of our management team,which has faced a multitude of different market cycles in the fresh produce industry over the last 35 years.During times of prosperity,we have prudently prepared our Company for adversity,positionin

81、g ourselves to weather even the most challenging temporary market conditions by developing a number of core competencies.These include:market leadership positions in many of our key products;a world-class brand that is respected around the globe for quality,reliability and freshness;a strong positio

82、n in growth markets;a worldwide infrastructure that can serve the needs of our global customers;a research and development pipeline that is filled with innovative new products;and the financial strength required to excel in the expanding global economy.With these strengths as our platform,our Board

83、of Directors and our management team remain confident in our ability to drive profitability and shareholder value over the long term.In fact,in January 2005,our Board declared our 13th consecutive quarterly dividend,which we increased to$0.20 per share in 2003 and have since maintained.SHAREHOLDERS

84、LETTER(continued)PAG E TH I RTE ENSHAREHOLDERS LETTER(continued)Mohammad Abu-GhazalehChairman and Chief Executive OfficerPA G E F OURTEEN FRESH DEL MONTE PRODUCE INC.AND S U B S I D I A R I E S Anticipating an Outstanding FutureWe move forward with a sharp focus on improving our operations and execu

85、ting our strategy to grow our business.As part of this focus,we will expand our range of existing products,add new products and new markets in Europe,the Middle East and Africa,and leverage our powerful infrastructure to drive sales.We will also focus on fulfilling several short-term objectives.Firs

86、t,we will finalize the integration of Del Monte Foods Europe to capture new synergies and generate greater revenue growth,which we will use to maximize our use of the Del Monte brand in Europe.Second,we will employ our brand strength to build a significant marketing advantage on which we can capital

87、ize now and in the years ahead.Finally,we will work,as always,to maintain the financial strength we need to support our growth.As we advance toward these goals,I would like to thank you,our shareholders,for your continued support.You may rest assured that all of us at Fresh Del Monte are fully commi

88、tted to continuing to earn your support,and to reward it with many more years of increasing shareholder value and growth.Operating Results page 16Ordinary Share Prices and Related Matters page 24Consolidated Balance Sheets page 25Consolidated Statements of Income page 26Consolidated Statements of Ca

89、sh Flows page 27Consolidated Statements of Shareholders Equity page 28Notes to Consolidated Financial Statements page 29Report of Independent Registered Public Accounting Firm page 62TABLE OF CONTENTSFinancial SummaryOperating Results2004 annual reportOVERVIEWWe are one of the worlds leading vertica

90、lly integrated producers,marketers and distributors of high-quality fresh and fresh-cut fruit and vegetables,as well as a leading producer and distributor of prepared fruit and vegetables,juices,beverages,snacks and desserts in Europe,the Middle East and Africa.We market our products worldwide under

91、 the DEL MONTE brand,a symbol of product quality and reliability since 1892.Our global sourcing and logistics system allows us to provide regular delivery of consistently high quality produce and value-added services to our customers.Net Sales Our net sales are affected by numerous factors including

92、 the balance between the supply of and demand for our produce and competition from other fresh produce companies.Our net sales are also dependent on our ability to supply a consistent volume and quality of fresh produce to the markets we serve.For example,seasonal variations in demand for bananas as

93、 a result of increased supply and competition from other fruit are reflected in the seasonal fluctuations in banana prices,with the first six months of each year generally exhibiting stronger demand and higher prices,except in those years where an excess supply exists.Also in European Union,the curr

94、ent banana import license system is expected to be replaced with a tariff-only banana import system effective January 1,2006.We cannot predict the effect that this change in the European Union banana import regulations will have on our banana net sales prices and results of operations.Since our fina

95、ncial reporting currency is the dollar,our net sales are significantly affected by fluctuations in the value of the currency in which we conduct our sales versus the dollar,with a strong dollar versus such currencies resulting in reduced net sales in dollar terms.Our net sales for 2004 were positive

96、ly impacted by approximately$70.5 million,as compared to 2003,as a result of a stronger euro,British pound and Japanese yen versus the dollar.Our net sales growth in recent years has been achieved primarily through increased sales volume in existing mar-kets of other fresh produce,primarily pineappl

97、es,melons and non-tropical fruit and favorable pricing on our“Del Monte Gold Extra Sweet”pineapple.Also contributing to our sales growth has been the new products that resulted from our recent acquisitions including tomatoes,potatoes and onions combined with expansion of value-added services such as

98、 banana ripening and prepared foods.Our net sales growth in recent years is also attributable to a broadening of our product line with the expansion of our fresh-cut produce business.We expect our net sales growth to continue to be driven by increased sales volumes in our other fresh produce segment

99、 and acquisitions.In Europe,we expect our net sales to increase substantially due to the new processed foods product offerings that resulted from our recent acquisition of Del Monte Foods Europe(“Del Monte Foods”).In addition,we expect to increase our sales in Europe by developing new products in th

100、e fresh and prepared food product lines and enter new markets in Eastern Europe,the Middle East and Africa.In European countries where we have both fresh and prepared foods operations,we are undertaking efforts to cross-market fresh products to supermarkets that once carried only our prepared foods,

101、and to market prepared foods to our fresh produce customers.We also expect our net sales of Del Monte Gold Extra Sweet pineapple to approximate last years levels.Cost of Products Sold Cost of products sold is principally composed of two elements,product and logistics costs.Product cost for our produ

102、ce is primarily composed of cultivation(the cost of growing crops),harvesting,packaging,labor,deprecia-tion and farm administration.Product cost for produce obtained from independent growers is composed of produce and packaging costs.Logistics costs include land and sea transportation and expenses r

103、elated to port facilities and distribution centers.Sea transportation cost is the most significant component of logistics costs and is comprised of the cost of vessel operating expenses and chartering refrigerated vessels.Vessel operating expenses for our vessels include operations,main-tenance,depr

104、eciation,insurance,fuel,the cost of which is subject to commodity price fluctuations,and port charges.For chartered vessels,operating expenses include the cost of chartering the vessels,fuel and port charges.Variations in container-board prices,which affect the cost of boxes and other packaging mate

105、rials,and fuel prices,can have a significant impact on our product cost and our profit margins.Containerboard,plastic,resin and fuel prices have historically been volatile.Containerboard prices decreased and fuel prices increased in 2002 as compared to 2001.Fuel prices increased significantly and co

106、ntainerboard prices increased slightly in 2003 as compared to 2002.During 2004,fuel prices and containerboard both increased again.This increase in containerboard and fuel prices has added approximately$9.7 million to our cost of sales in 2004 as compared to 2003.PA G E S I X T E E N F R E S H D E L

107、 M O N T E P R O D U C E I N C.A N D S U B S I D I A R I E S In general,changes in our volume of products sold can have a disproportionate effect on our gross profit.Within any particular year,a significant portion of our cost of products sold is fixed,both with respect to our operations and with re

108、spect to the cost of produce purchased from independent growers from whom we have agreed to purchase all the products they produce.Accordingly,higher volumes produced on company-owned farms directly reduce the average per-box cost,while lower volumes directly increase the average per-box cost.In add

109、ition,because the volume that will actually be produced on our farms and by independent growers in any given year depends on a variety of factors,including weather,that are beyond our control or the control of our independent growers,it is difficult to predict volumes and per-box costs.Selling,Gener

110、al and Administrative Expenses Selling,general and administrative expenses include primarily the costs associated with selling in countries where we have our own sales force,advertising and promotional expenses,professional fees,general corporate overhead and other related administrative functions.T

111、he Del Monte Foods business requires a significant marketing effort which is included in selling,general and administrative expenses and as a result we expect marketing and promotional expenses to increase during 2005.Interest Expense Interest expense consists primarily of interest on borrowings und

112、er working capital facilities that we maintain and interest on other long-term debt primarily for vessel purchases and capital lease obligations.Decreases in inter-est rates,combined with a lower average debt balance,significantly contributed to the decrease in interest expense in 2002 and 2003.In 2

113、004,as a result of the Del Monte Foods acquisition at the beginning of the fourth quarter,we increased our debt level which resulted in higher interest expense.In 2005,we expect our increased borrowing levels under our credit facility to result in higher interest expense.Other Income(Loss),Net Other

114、 income(loss),net,primarily consists of equity earnings in unconsolidated companies,together with currency exchange gains or losses and other miscellaneous income and expense items such as insurance recov-eries and gain and losses from sales of investments and property,plant and equipment.Provision

115、for Income Taxes Income taxes consist of the consolidation of the tax provisions,computed on a separate entity basis,in each country in which we have operations.Since we are a non-U.S.company with substantial operations outside the United States,a substantial portion of our results of operations is

116、not subject to U.S.taxation.Many of the countries in which we operate have favorable tax rates.We are subject to U.S.taxation on our distribution and fresh-cut operations in the United States.From time to time,tax authorities in various jurisdictions in which we operate audit our tax returns and rev

117、iew our business structures and positions and there are audits presently pending in various countries.There can be no assurance that any tax audits,or changes in existing tax laws or interpretations in countries in which we operate,will not result in an increased effective tax rate for us.We have es

118、tablished tax contingency accruals as a result of various tax audits currently in process.The amount of income taxes due as a result of the eventual outcome of these audits may differ from the amount of estimated tax accruals.Results of Operations The following table presents,for each of the periods

119、 indicated,certain income statement data expressed as a percentage of net sales:Year ended December 31,December 26,December 27,2004 2003 2002 Income Statement Data:Net sales100.0%100.0%100.0%Gross profit9.113.216.1Selling,general and administrative expenses4.54.34.9Operating income4.48.910.3Interest

120、 expense0.30.30.8Net income4.89.19.3F R E S H D E L M O N T E P R O D U C E I N C.A N D S U B S I D I A R I E S PA G E S E V E N T E E NThe following tables present for each of the periods indicated(1)net sales by geographic region,(2)net sales by product category and(3)gross profit by product categ

121、ory,and in each case,the percentage of the total represented thereby.Certain amounts from 2002 have been reclassified to conform to the 2003 and 2004 presentation.Year ended December 31,2004 December 26,2003 December 27,2002 (U.S.dollars in millions)Net sales by geographic region:North America$1,497

122、.452%$1,339.054%$1,050.950%Europe940.532714.829639.331 Asia-Pacific385.813373.315348.217 Other82.3 3 59.7 2 52.1 2 Total$2,906.0 100%$2,486.8 100%$2,090.5 100%Year ended December 31,December 26,December 27,(U.S.dollars in millions)2004 2003 2002 Net sales by product category:Bananas$1,030.835%$969.6

123、39%$957.046%Other fresh produce1,638.7571,398.1561,030.549 Del Monte Foods88.83 Other products and services147.7 5 119.1 5 103.0 5 Total$2,906.0 100%$2,486.8 100%$2,090.5 100%Gross profit by product category:Bananas$23.09%$69.221%$79.924%Other fresh produce216.182249.576252.875 Del Monte Foods16.36

124、Other products and services9.3 3 9.5 3 4.0 1 Total$264.7 100%$328.2 100%$336.7 100%2004 COMPARED WITH 2003Net Sales Net sales in 2004 were$2,906.0 million compared with$2,486.8 million in 2003.The increase in net sales of$419.2 million was primarily attributable to higher net sales of other fresh pr

125、oduce,the Del Monte Foods acquisition,bananas and other products and services.Net sales of other fresh produce increased$240.6 million principally due to higher sales volume of tomatoes and vegetables in North America,higher sales volume and per unit net sales prices of tomatoes,fresh-cut fruit and

126、vegetables,and non-tropical fruits in North America and Europe.The Del Monte Foods acquisition con-tributed$88.8 million of the increase in net sales.The increase in banana net sales of$61.2 million is principally attributable to higher per unit sales prices and a 17%increase in sales volume in Euro

127、pe partially offset by lower per unit sales prices and sales volume in North America.The increase in net sales of other products and services is principally attributable to increases in third-party cargo services.Net sales were positively affected by a weaker dollar versus the euro,the British pound

128、 and the Japanese yen.The net effect of foreign exchange in 2004 compared with 2003 was an increase in net sales of approximately$70.5 million of which approximately$47.9 million is attributable to the euro,$8.0 million to the British pound and$14.6 million to the Japanese yen.During 2004,one custom

129、er,Wal-Mart,Inc.,accounted for approximately 14%of our total net sales.These sales are reported in our banana and other fresh produce segments.No other customer accounted for 10%or more of our net sales.In 2004,the top ten customers accounted for approximately 35%of our net sales.Operating Results(c

130、ontinued)2004 annual reportPA G E E I G H T E E N F R E S H D E L M O N T E P R O D U C E I N C.A N D S U B S I D I A R I E S Cost of Products Sold Cost of products sold was$2,641.3 million in 2004,compared with$2,158.6 million in 2003,an increase of$482.7 million.This increase is primarily due to h

131、igher sales volume and per unit fruit costs of other fresh produce and higher banana per unit fruit costs as the result of adverse growing conditions in Costa Rica,combined with higher con-tainerboard and higher fuel and distribution costs.The increase in cost of product sold related to the Del Mont

132、e Foods acquisition is$72.5 million.Gross Profit Gross profit was$264.7 million in 2004,compared with$328.2 million for the same period in 2003.The decrease of$63.5 million was primarily attributable to a 67%decrease in banana gross profit that resulted from higher production costs including higher

133、commodity costs,Sigatoka disease and poor weather conditions in Costa Rica.Higher production,fruit procurement and transportation costs in the other fresh produce category also contributed to the decrease in gross profit.The Del Monte Foods acquisition contributed$16.3 million to gross profit in 200

134、4.As a percentage of net sales,gross profit margins decreased to 9.1%in 2004,as compared with 13.2%in 2003.This decrease in gross profit margin was primarily attributable to increased production costs combined with higher containerboard,fuel and distribution costs.Selling,General and Administrative

135、Expenses Selling,general and administrative expenses increased$23.2 million to$131.0 million in 2004 compared with$107.8 million in 2003.The increase was primarily due to the Del Monte Foods acqui-sition,which accounted for$13.1 million,higher administrative expenses related to professional fees in

136、connection with the on-going initiatives to implement the Sarbanes-Oxley Act combined with information technology services and higher sales and marketing expenses in Europe.Asset Impairment Charge Based on continued operating losses and discontinued product lines in the United Kingdom,the United Sta

137、tes and Brazil related to the other fresh produce and banana categories,certain machinery and equipment was written down to its estimated fair value.As a result,an asset impairment charge of$5.4 million was recorded in 2004.Operating Income Operating income in 2004 was$128.3 million compared with$22

138、0.4 million in 2003,a decrease of$92.1 million.The decrease in operating income is attributable to lower gross profit,higher selling,general and administrative expenses combined with the asset impairment charge that was incurred in 2004.Interest Expense Interest expense increased$1.7 million to$9.0

139、million in 2004 compared with$7.3 million in 2003,primarily as a result of higher average debt balances that resulted from recent acquisitions.Other Income(Loss),Net Other income(loss),net was$6.9 million in 2004,compared with$28.4 million in 2003.The decrease of$21.5 million is primarily attributab

140、le to insurance recoveries of$11.5 million related to Hurricane Mitch in 1998 and a gain on the sale of the 50%interest in Compania Industrial Corrugadora Guatemala S.A.,a manufacturer of corrugated boxes,of$5.5 million both recorded in 2003.In addition,lower equity in earnings of unconsolidated com

141、panies during 2004 and higher other miscellaneous expenses incurred during 2004 also contributed to the decrease in other income(loss),net as compared with 2003.Provision for Income Taxes Provision for income taxes decreased from$15.9 million in 2003 to a benefit of$12.2 million for 2004.Income tax

142、benefit for 2004 includes a net benefit of$20.6 million,primarily due to the reversal of tax contingency accruals net of changes in deferred tax assets for the settlement of a United States tax audit for the years 1997 through 2001.Excluding this benefit of$20.6 million,the provision for income taxe

143、s would be$8.4 million for 2004 as compared with$15.9 million in 2003.This reduction of$7.5 million is primarily due to lower taxable income in the United States.2003 COMPARED WITH 2002Net Sales Net sales in 2003 were$2,486.8 million,compared with$2,090.5 million in 2002.The increase in net sales of

144、$396.3 million was primarily attributable to the other fresh produce category.Net sales of other fresh produce increased primarily due to tomato,potato and other vegetables to$246.0 million as a result of the Standard acquisition and higher fresh-cut net sales in the U.S.and Europe of$66.6 million.N

145、et sales of Del Monte Gold Extra Sweet pineapples increased by$24.4 million as a result of an 8%increase in worldwide sales volume and higher per unit sales prices in Europe,partially F R E S H D E L M O N T E P R O D U C E I N C.A N D S U B S I D I A R I E S PA G E N I N E T E E Noffset by a slight

146、 4%decrease in per unit sales prices in North America and Asia.Banana net sales increased slightly due to higher per unit net sales prices in Europe and higher sales volume in Asia,partially offset by lower per unit sales prices in North America and Asia.Net sales were positively affected by a weake

147、r dollar versus the euro,the British pound and the Japanese yen.The net effect of foreign exchange in 2003 compared with 2002 was an increase in net sales of approximately$72.5 million of which approximately$43.5 million is attributable to the euro,$18.0 million to the British pound and$11.0 million

148、 to the Japanese yen.During 2003,as a result of the Standard acquisition,one customer,Wal-Mart,Inc.,accounted for approximately 14%of our total net sales.These sales are reported in our banana and other fresh produce segments.No other customer accounted for 10%or more of our net sales.In 2003,the to

149、p ten customers accounted for approximately 41%of our net sales,as compared with 33%of our net sales during 2002.Cost of Products Sold Cost of products sold was$2,158.6 million in 2003 compared with$1,753.8 million in 2002,an increase of$404.8 million.This increase is primarily due to higher other f

150、resh produce sales volume due to acquisitions,combined with higher sea transportation costs as well as higher operating costs as a result of expansion of the North America business.Gross Profit Gross profit was$328.2 million in 2003 compared with$336.7 million for the same period in 2002.The decreas

151、e of$8.5 million was primarily attributable to lower banana per unit sales prices in North America and Asia-Pacific regions combined with increased containerboard and fuel costs.As a percentage of net sales,gross profit margins decreased to 13.2%in 2003 as compared with 16.1%in 2002.This decrease in

152、 gross profit margin was attributable to increased trans-portation costs combined with the shift in sales mix to high volume,lower margin products from our recent acquisitions.Selling,General and Administrative Expenses Selling,general and administrative expenses increased$5.1 million to$107.8 milli

153、on in 2003 compared with$102.7 million in 2002.The increase was primarily due to higher administrative expenses related to acquisitions,new marketing initiatives in Europe as well as higher professional fees related to business development and on-going litigation partially offset by cost saving meas

154、ures.Provision for Kunia Well Site In 2002,as a result of additional communications with the EPA and the advice of our outside advisors,a non-cash charge of$7.0 million for environmental remediation was recorded.Asset Impairment Charge Based on the continuing operating losses of certain distribution

155、 facilities in South Africa and Argentina and a decline in the fair value of certain long-term assets in South America related to the other fresh produce segment,a charge of$12.6 million for impairment of long-lived assets was recorded during 2002.Operating Income Operating income in 2003 was$220.4

156、million compared with$214.4 million in 2002,an increase of$6.0 million.The increase was due to the provision for Kunia Well Site and asset impairment charge that were recorded in 2002,offset by lower gross profit and higher selling,general and administrative expenses in 2003.Interest Expense Interes

157、t expense decreased$8.4 million to$7.3 million in 2003 compared with$15.7 million in 2002 primarily as a result of lower average debt balances.Other Income(Loss),Net Other income(loss),net was$28.4 million in 2003 compared with$20.5 million in 2002.The increase of$7.9 million is primarily attributab

158、le to insurance recoveries of$11.5 million related to Hurricane Mitch in 1998 and a gain on the sale of the 50%interest in Compania Industrial Corrugadora Guatemala S.A.,a manufacturer of corru-gated boxes,of$5.5 million recorded in 2003,as compared with a gain on the sale of our equity investment i

159、n a Northern European distributor of$8.7 million and insurance proceeds of$2.4 million from claims related to our Guatemala operations,recorded in 2002.Provision for Income Taxes Provision for income taxes decreased from$18.6 million in 2002 to$15.9 million in 2003,primarily due to a change in the s

160、ource of pre-tax income to jurisdictions where tax rates are lower.Operating Results(continued)2004 annual reportPA G E T W E N T Y F R E S H D E L M O N T E P R O D U C E I N C.A N D S U B S I D I A R I E S Seasonality In part as a result of seasonal sales price fluctuations,we have historically re

161、alized most of our net sales and a majority of our gross profit during the first two calendar quarters of the year.The sales price of any fresh produce item fluc-tuates throughout the year due to the supply of and demand for that particular item,as well as the pricing and availability of other fresh

162、 produce items,many of which are seasonal in nature.For example,the production of bananas is continuous throughout the year and production is usually higher in the second half of the year,but the demand for bananas varies because of the availability of other fruit.As a result,demand for bananas is s

163、easonal and generally results in higher sales prices during the first six months of the calendar year.We make most of our sales of non-tropical fruit from October to May.In the melon market,the entry of many growers selling unbranded or regionally branded melons during the peak North American and Eu

164、ropean melon growing season results in greater supply,and therefore lower sales prices,from June to October.As a result of greater demand during the fourth quarter,the Del Monte Foods business is expected to have higher net sales and gross profit during this period.These seasonal fluctuations are il

165、lustrated in the following table,which presents certain unaudited quarterly financial information for the periods indicated:Year endedDecember 31,December 26,(U.S.dollars in millions)2004 2003Net sales:First quarter$713.8$643.8 Second quarter763.6700.6 Third quarter610.4563.7 Fourth quarter818.2 578

166、.7 Total$2,906.0$2,486.8Gross profit:First quarter$77.2$107.0 Second quarter89.1109.3 Third quarter30.865.0 Fourth quarter67.6 46.9 Total$264.7$328.2Liquidity and Capital Resources Net cash provided by operating activities for 2004 was$157.0 million,a decrease of$107.0 million from 2003.The decrease

167、 in net cash provided by operating activities was primarily attributable to a decrease in net income when considering the reversal of tax contingency and asset impairment charges incurred during 2004,combined with increases in receivables that result from higher net sales for fresh produce and prepa

168、red food products,partially offset by other changes in operating assets and liabilities.Net cash provided by operating activities for 2003 was$264.0 million,a decrease of$44.2 million from 2002.The decrease in net cash provided by operating activities was primarily attributable to higher balances in

169、 inventory,principally as a result of increased raw materials and packaging supplies,lower balances in accounts payable and accrued expenses,combined with other changes in operating assets and liabilities.Net cash used in investing activities was$412.0 million for 2004,$159.4 million for 2003 and$68

170、.3 million for 2002.Net cash used in investing activities for 2004 consisted primarily of purchase of subsidiaries,net of cash acquired and capital expenditures.Purchase of subsidiaries consisted of the acquisition of Del Monte Foods for$301.5 million,which is net of$24.0 million of assumed debt and

171、$13.3 million of cash acquired combined with the acquisition of Can-Am Express,Inc.and RLN Leasing,Inc.(collectively,“Can-Am”),a nationally-recognized refrigerated trucking operation based in Fargo,North Dakota for$18.6 million,net of$0.2 million of cash acquired.Capital expenditures in 2004 consist

172、ed primarily of expansion of our distribution facilities and fresh-cut facilities in Europe and North America,expansion of production facilities in South America and information technology initiatives in North America,Europe and Asia-Pacific.F R E S H D E L M O N T E P R O D U C E I N C.A N D S U B

173、S I D I A R I E S PA G E T W E N T Y-O N EOn October 1,2004,we acquired Del Monte Foods,including its operations in Europe,Africa and the Middle East.We acquired Del Monte Foods for approximately$338.8 million,financed primarily through cash on hand and borrowings under our credit facility.Del Monte

174、 Foods is a vertically integrated producer,marketer and distributor of prepared fruit and vegetables,juices,beverages,snacks and desserts.Through this acquisition we will add approximately$400 million of sales and an attractive array of products and brands to our existing portfolio of fresh and fres

175、h-cut produce.The company holds a perpetual,royalty-free license to use the Del Monte brand for processed and/or canned foods in more than 100 countries throughout Europe,Africa and the Middle East.Del Monte is the leading brand for canned fruit and pineapple in many Western European markets and is

176、a leading brand in the United Kingdom beverage market.This acquisition provides us with a myriad of new markets enhancing our ability to sell our branded fresh and processed products together under the Del Monte name and strengthens our presence in Europe and other key markets.Del Monte Foods juices

177、,beverages and pre-pared fruit and vegetables are processed at facilities in the United Kingdom,Greece,South Africa and Italy,while its pine-apple is cultivated and processed at its plantation and cannery in Kenya.On August 11,2004,we acquired Can-Am.Can-Am utilizes a suite of logistics and fleet ma

178、nagement software to optimize transportation services.With an owned fleet of 150 tractors and 200 trailers,and facilities in Fargo,North Dakota;Denton,Texas;and Cincinnati,Ohio,Can-Am provides over-the-road trucking services.Our acquisition of Can-Am has enabled us to provide comprehensive distribut

179、ion services to our retail and foodservice customers.Net cash used in investing activities for 2003 consisted primarily of the acquisition of Standard for$99.7 million,the acquisition of the remaining 33%interest in Envaco for$3.0 million,the acquisition of Expans for$0.8 million and the acqui-sitio

180、n of Country Best for$12.2 million,combined with capital expenditures of$58.1 million,partially offset by$12.8 million of proceeds from sale of an equity investment.Capital expenditures in 2003 were primarily for the expansion of production facilities in South America,distribution centers and fresh-

181、cut facilities in North America and the United Kingdom and for information technology.Standard,acquired on January 27,2003,was a Dallas,Texas based integrated distributor of fresh fruit and vegetables,which services retail chains,foodservice distributors and other wholesalers in approximately 30 sta

182、tes.The acquisition included four distribution facilities,which increases our presence in key markets in the United States and allows us to increase our product offering to include tomatoes,potatoes,strawberries,onions,and an extensive line of specialty items.On June 18,2003,we acquired the remainin

183、g interest in Envaco,providing us with 100%ownership of our corrugated box plant in Costa Rica.Expans,acquired on November 21,2003,was a leading distributor of fresh fruit and vegetables in Poland.This acquisition enabled us to leverage the strong brand identity of Del Monte,establish a strong found

184、ation in Poland and the broader Central European region and to export fresh fruit and vegetables from Poland to our other distribution facilities and fresh-cut operations in the United Kingdom and Northern Europe.Country Best,acquired on December 22,2003,was a leading U.S.East Coast processor and pa

185、ckager of potatoes,onions and other fresh fruit and vegetables.This acquisition includes processing and packaging operations in Florida,Georgia and New York.Proceeds from sale of an equity investment was due to the sale,on April 24,2003,of our 50%equity interest in Compania Industrial Corrugadora Gu

186、atemala,S.A.,a manufacturer of corrugated boxes.Net cash used in investing activities for 2002 consisted primarily of capital expenditures of$63.4 million,the acquisition of United Kingdom-based Fisher Foods Limiteds chilled division from the administrative receivers for approximately$37.2 million,a

187、nd the acquisition of an additional interest in National Poultry Company PLC for approximately$4.7 million,offset by the proceeds from the sale of assets of$6.8 million and the proceeds from the sale of an equity investment of$30.0 million.Capital expenditures in 2002 were primarily for expansion of

188、 our production facilities in South America and distribution and fresh-cut facilities in North America,the United Kingdom and the Asia-Pacific region and the purchase of a pre-owned refrigerated vessel.The United Kingdom Fresh-Cut acquisition included three facilities dedicated to chilled fresh-cut

189、produce and bagged and prepared salads and accelerates our growth in the fresh-cut category.The proceeds from the sale of an equity investment was attributable to the sale of our 80%non-controlling interest in Internationale Fruchtimport Gesell-schaft Weichert&Co.(“Interfrucht”),a Northern European

190、distributor of fresh fruit and other produce for a sales price of$30.0 million.Operating Results(continued)2004 annual reportPA G E T W E N T Y-T W O F R E S H D E L M O N T E P R O D U C E I N C.A N D S U B S I D I A R I E S Net cash provided by financing activities of$240.7 million for 2004 was pr

191、incipally attributable to proceeds from long-term debt of$545.1 million and proceeds from stock options exercised of$4.4 million,partially offset by payments on long-term debt of$238.8 million,payments of debt of acquired subsidiary of$24.0 million and payment of dividends of$46.0 million.In 2005,we

192、 expect to pay cash dividends of approximately$46.2 million.Net cash used in financing activities of$66.2 million for 2003 was principally for the net repayment of long-term debt of$52.7 million and for the payment of our cash dividends of$25.5 million partially offset by the proceeds from stock opt

193、ions exercised of$12.0 million.Net cash used in financing activities of$245.1 million for 2002 was primarily for net repayments on long-term debt of$255.3 million and payment of cash dividends of$11.1 million,partially offset by proceeds from stock options exercised of$24.8 million.In recent years,w

194、e have financed our working capital and other liquidity requirements primarily through cash from operations and borrowings under our credit facility.We have a credit facility with Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A.,“Rabobank Nederland”,New York Branch,which we refer to as Rabobank.

195、Our obligations under the credit facility are guaranteed by certain of our subsidiaries.On March 21,2003,Fresh Del Monte,and certain wholly-owned subsidiaries entered into a$400.0 million,four-year syndicated revolving credit facility(the“New Credit Facility”),with Rabobank Nederland,New York Branch

196、,as administrative agent,which replaced the then existing$450.0 million revolving credit facility(“Revolving Credit Facility”)including the$135.0 million five-year term loan maturing on May 10,2005(“Term Loan”).The Revolving Credit Facility contained covenants,which required us to maintain certain m

197、inimum financial ratios and limited the payment of future dividends.In connection with the Revolving Credit Facility,we entered into an interest rate swap agreement,which expired in January 2003 with the same bank to limit the effect of increases in interest rates on a portion of the Revolving Credi

198、t Facility.The notional amount of the swap decreased over its life from$150.0 million in the first three months,to$53.6 million in the last three months.The cash differentials paid or received on the swap agreement were accrued and recognized as adjustments to interest expense.Interest expense relat

199、ed to the swap agreement amounted to$0.1 million and$2.6 million for 2003 and 2002,respectively.With drawdowns from the New Credit Facility,all amounts outstanding under the Revolving Credit Facility,including the remaining unpaid balance of the Term Loan of$25.0 million were paid off.On November 9,

200、2004,the New Credit Facility was amended to increase the total commitment to$600.0 million,a term loan commitment of up to$400.0 million was added and the maturity date was extended to November 10,2009.At December 31,2004,we had$247.4 million available under committed working capital facilities,all

201、of which is represented by the New Credit Facility.The New Credit Facility also includes a swing line facility and a letter of credit facility.At December 31,2004,$29.9 million of available credit was applied towards the issuance of letters of credit,principally related to the Del Monte Foods acquis

202、ition which requires us to guarantee certain contingent obligations under the purchase agreement.The New Credit Facility as amended permits borrowings with an interest rate based on a spread over the London Interbank Offered Rate(“LIBOR”)and expires on November 10,2009.There was$322.7 million outsta

203、nding under the New Credit Facility at December 31,2004.The New Credit Facility is collateralized directly or indirectly by substantially all of our assets and requires us to meet certain covenants.We believe we are in compliance with these covenants.As of December 31,2004,we had$363.5 million of lo

204、ng-term debt and capital lease obligations,including the current portion,consisting of$322.7 million of long-term debt related to the New Credit Facility,$8.2 million of long-term debt related to refrigerated vessel loans,$8.4 million of other long-term debt and$24.2 million of capital lease obligat

205、ions.Principal capital expenditures planned for 2005 consist of approximately$95 million for expansion of distribution and fresh-cut facilities in Europe,expansion of production facilities in South America,information technology initiatives as well as investments in the new Del Monte Foods productio

206、n facilities in Europe and Africa.We expect to fund our capital expenditures in 2005 from operating cash flows and borrowings under our New Credit Facility.We believe that cash gener-ated from operations and available borrowings will be adequate to cover our cash needs in 2005.We generated cash from

207、 operations of$157.0 million in 2004 and had$247.4 million available under our New Credit Facility as of December 31,2004.Based on our operating plan and borrowing capacity of our New Credit Facility,we believe we have sufficient cash to meet our obligations in 2005.This belief is based on our posit

208、ive operating results and cash flow in recent years.F R E S H D E L M O N T E P R O D U C E I N C.A N D S U B S I D I A R I E S PA G E T W E N T Y-T H R E EThe following details information with respect to our contractual obligations as of December 31,2004:(U.S.dollars in millions)Total Less than 1

209、year 13 years 35 years More than 5 yearsPayments by period:Fruit purchase agreements$3,085.6$579.6$770.6$679.7$1,055.7Purchase obligations322.7176.888.420.936.6Operating leases120.622.137.328.332.9Capital lease obligations(including interest)26.77.814.64.20.1Long-term debt339.3 9.3 3.2 325.3 1.5Tota

210、l$3,894.9$795.6$914.1$1,058.4$1,126.8We have agreements to purchase the entire production of certain products of our independent growers in Costa Rica,Guatemala,Ecuador,Cameroon,Colombia,Chile,Brazil and the Philippines.Total purchases under these agreements amounted to$571.4 million,$505.6 million

211、and$499.5 million for 2004,2003 and 2002,respectively.Our ordinary shares are traded solely on the New York Stock Exchange,under the symbol FDP,and commenced trading on October 24,1997,the date of our initial public offering.The following table presents the high and low sales prices of our ordinary

212、shares for the periods indicated as reported on the New York Stock Exchange Composite Tape:High Low High LowFive most recent financial yearsMost recent six monthsYear ended December 29,2000$9.94$3.38September 2004$26.70$24.36Year ended December 28,2001$15.95$4.56October 2004$26.38$24.77Year ended De

213、cember 27,2002$29.20$13.70November 2004$27.70$26.15Year ended December 26,2003$28.35$15.12December 2004$29.63$27.23Year ended December 31,2004$29.63$22.62January 2005$32.20$28.31February 2005$33.74$29.7120032004First quarter$21.25$15.29First quarter$27.99$23.33Second quarter$25.57$15.12Second quarte

214、r$25.98$22.62Third quarter$28.35$24.95Third quarter$27.65$24.36Fourth quarter$27.31$22.90Fourth quarter$29.63$24.77As of December 31,2004,there were 57,690,074 ordinary shares outstanding.As of February 28,2005,we believe that holders in the United States held approximately 42%of the outstanding ord

215、inary shares.Operating Results(continued)2004 annual reportPA G E T W E N T Y-F O U R F R E S H D E L M O N T E P R O D U C E I N C.A N D S U B S I D I A R I E S Ordinary Share Prices and Related MattersF R E S H D E L M O N T E P R O D U C E I N C.A N D S U B S I D I A R I E S PA G E T W E N T Y-F

216、I V EDecember 31,December 26,(U.S.dollars in millions,except share and per share data)2004 2003 ASSETS Current assets:Cash and cash equivalents$42.1$51.0 Trade accounts receivable,net of allowance of$20.2 and$17.1,respectively276.0195.2 Advances to growers and other receivables,net of allowance of$2

217、0.7 and$13.3,respectively54.741.1 Inventories347.3215.1 Deferred income taxes3.83.0 Prepaid expenses and other current assets18.4 7.6 Total current assets742.3 513.0 Investments in and advances to unconsolidated companies15.518.2 Property,plant and equipment,net914.7741.0 Deferred income taxes33.427

218、.5 Other noncurrent assets103.423.0 Goodwill248.7 168.5 Total assets$2,058.0$1,491.2 LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Accounts payable and accrued expenses$398.3$325.8 Current portion of long-term debt and capital lease obligations15.814.0 Deferred income taxes14.18.4 Income ta

219、xes payable14.2 21.7 Total current liabilities442.4 369.9 Long-term debt and capital lease obligations347.729.5 Retirement benefits96.055.1 Other noncurrent liabilities41.759.4 Deferred income taxes53.0 31.4 Total liabilities980.8 545.3 Minority interests8.0 3.7 Commitments and contingenciesSharehol

220、ders equity:Preferred shares,$0.01 par value;50,000,000 shares authorized;none issued or outstanding Ordinary shares,$0.01 par value;200,000,000 shares authorized;57,690,074 and 57,282,518 issued and outstanding0.60.6 Paid-in capital376.9367.3 Retained earnings714.6621.4 Accumulated other comprehens

221、ive loss(22.9)(47.1)Total shareholders equity1,069.2 942.2 Total liabilities and shareholders equity$2,058.0$1,491.2 See accompanying notes.Consolidated Balance Sheets2004 annual reportConsolidated Statements of Income2004 annual reportYear ended December 31,December 26,December 27,(U.S.dollars in m

222、illions,except share and per share data)2004 2003 2002 Net sales$2,906.0$2,486.8$2,090.5Cost of products sold2,641.3 2,158.6 1,753.8 Gross profit264.7328.2336.7Selling,general and administrative expenses131.0107.8102.7Provision for Kunia Well Site7.0Asset impairment charges5.4 12.6 Operating income1

223、28.3220.4214.4Interest expense(9.0)(7.3)(15.7)Interest income0.80.80.7Other income,net6.9 28.4 20.5 Income before(benefit from)provision for income taxes and cumulative effect of change in accounting principle127.0242.3219.9(Benefit from)provision for income taxes(12.2)15.9 18.6 Income before cumula

224、tive effect of change in accounting principle139.2226.4201.3Cumulative effect of change in accounting principle (6.1)Net income$139.2$226.4$195.2 Net income per ordinary shareBasic:Income before cumulative effect of change in accounting principle$2.42$4.00$3.63Cumulative effect of change in accounti

225、ng principle (0.11)Net income per ordinary shareBasic$2.42$4.00$3.52 Net income per ordinary shareDiluted:Income before cumulative effect of change in accounting principle$2.41$3.95$3.56Cumulative effect of change in accounting principle (0.11)Net income per ordinary shareDiluted$2.41$3.95$3.45 Divi

226、dends declared per ordinary share$0.80$0.45$0.20 Weighted average number of ordinary shares:Basic57,487,13156,539,69155,445,106 Diluted57,803,15857,346,37756,538,659See accompanying notes.PA G E T W E N T Y-S I X F R E S H D E L M O N T E P R O D U C E I N C.A N D S U B S I D I A R I E S F R E S H D

227、 E L M O N T E P R O D U C E I N C.A N D S U B S I D I A R I E S PA G E T W E N T Y-S E V E NConsolidated Statements 0f Cash Flows2004 annual reportYear ended December 31,December 26,December 27,(U.S.dollars in millions)2004 2003 2002 Operating activities:Net income$139.2$226.4$195.2 Adjustments to

228、reconcile net income to net cash provided by operating activities:Depreciation and amortization69.961.359.4 Amortization of debt issue costs1.01.72.3 Non-cash stock-based compensation expense0.9 Cumulative effect of change in accounting principle6.1 Provision for Kunia Well Site7.0 Asset impairment

229、charges5.412.6 Reversal of accrual for U.S.tax contingency(18.0)Gain on sale of equity investment(5.5)(8.7)Equity in earnings of unconsolidated companies(1.2)2.9 Deferred income taxes7.8(1.1)(0.4)Other,net(1.4)(7.0)(7.5)Changes in operating assets and liabilities,net of acquisitions:Receivables(28.3

230、)(5.7)(17.0)Inventories(14.1)(23.2)(11.5)Prepaid expenses and other current assets(6.5)1.9 Accounts payable and accrued expenses(4.5)18.454.6 Other noncurrent assets and liabilities6.5(2.0)12.3 Net cash provided by operating activities157.0 264.0 308.2 Investing activities:Capital expenditures(94.0)

231、(58.1)(63.4)Proceeds from sale of equity investments12.830.0 Proceeds from sale of assets2.41.56.8 Purchase of subsidiaries,net of cash acquired(320.1)(115.8)(41.9)Dividends received from unconsolidated subsidiaries0.10.53.6 Other investing activities,net(0.4)(0.3)(3.4)Net cash used in investing act

232、ivities(412.0)(159.4)(68.3)Financing activities:Proceeds from long-term debt545.1344.9346.5 Payments on long-term debt(238.8)(397.6)(601.8)Payments on debt of acquired subsidiary(24.0)Payments on short-term borrowings(3.5)Proceeds from stock options exercised4.412.024.8 Payments of dividends(46.0)(2

233、5.5)(11.1)Net cash provided by(used in)financing activities240.7(66.2)(245.1)Effect of exchange rate changes on cash5.4 3.1 1.7 Net(decrease)increase in cash and cash equivalents(8.9)41.5(3.5)Cash and cash equivalents,beginning51.0 9.5 13.0 Cash and cash equivalents,ending$42.1$51.0$9.5 Non-cash fin

234、ancing and investing activities:Purchases of assets under capital lease obligations$7.2$7.2$11.9 See accompanying notes.Consolidated Statements of Shareholders Equity2004 annual report(U.S.dollars in millions,except share data)Ordinary Shares Outstanding Ordinary Shares Paid-in Capital Retained Earn

235、ings Accumulated Other Comprehensive Loss Total Shareholders Equity Balance at December 28,200154,091,650$0.5$329.7$236.4$(16.1)$550.5 Exercises of stock options2,114,3620.124.724.8 Non-cash compensation0.90.9 Dividends declared(11.1)(11.1)Comprehensive income:Net income195.2195.2 Unrealized loss on

236、 derivatives,net of reclassification for losses of$5.5 included in net income(2.8)(2.8)Net foreign currency translation adjustment3.23.2 Additional minimum pension liability (1.2)(1.2)Comprehensive income 194.4 Balance at December 27,200256,206,0120.6355.3420.5(16.9)759.5 Exercises of stock options1

237、,076,50612.012.0 Dividends declared(25.5)(25.5)Comprehensive income:Net income226.4226.4 Unrealized loss on derivatives,net of reclassification for losses of$27.7 included in net income(29.7)(29.7)Net foreign currency translation adjustment0.40.4 Additional minimum pension liability (0.9)(0.9)Compre

238、hensive income 196.2 Balance at December 26,200357,282,5180.6367.3621.4(47.1)942.2 Exercises of stock options407,5564.44.4 Tax benefit on stock options5.25.2 Dividends declared(46.0)(46.0)Comprehensive income:Net income139.2139.2 Unrealized loss on derivatives,net of reclassification for losses of$3

239、7.7 included in net income7.97.9 Net foreign currency translation adjustment16.716.7 Additional minimum pension liability (0.4)(0.4)Comprehensive income 163.4 Balance at December 31,2004 57,690,074$0.6$376.9$714.6$(22.9)$1,069.2 See accompanying notes.PA G E T W E N T Y-E I G H T F R E S H D E L M O

240、 N T E P R O D U C E I N C.A N D S U B S I D I A R I E S F R E S H D E L M O N T E P R O D U C E I N C.A N D S U B S I D I A R I E S PA G E T W E N T Y-N I N E1.GENERALFresh Del Monte Produce Inc.(“Fresh Del Monte”)was incorporated under the laws of the Cayman Islands on August 29,1996 and is 43.7%o

241、wned by IAT Group Inc.,which is 100%beneficially owned by members of the Abu-Ghazaleh family.In addition,members of the Abu-Ghazaleh family directly own 8.5%of the outstanding ordinary shares of Fresh Del Monte.Fresh Del Monte and its subsidiaries are engaged primarily in the worldwide production,tr

242、ansportation and marketing of fresh produce.Fresh Del Monte and its subsidiaries source their products,bananas,pineapples,melons and non-tropical fruit(including grapes,citrus,apples,pears,peaches,plums,nectarines,apricots and kiwi),plantains,Vidalia sweet onions,tomatoes,potatoes and various greens

243、,primarily from Central,South and North America and the Philippines.Fresh Del Monte also sources products from North America,Africa and Europe and distributes its products in Europe,the Asia-Pacific region and South America.Products are sourced from company-owned farms,through joint venture arrangem

244、ents and through supply contracts with independent growers.With the acquisition of Del Monte Foods Europe(“Del Monte Foods”)on October 1,2004,Fresh Del Monte became a vertically integrated producer,marketer and distributor of prepared fruit and vegetables,juices,snacks and desserts and holds a perpe

245、tual,royalty-free license to use the Del Monte brand for processed and/or canned foods throughout Europe,Africa and the Middle East.See note 3,“Acquisitions and Disposition”.2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESVariable Interest Entities In January 2003,the Financial Accounting Standards Boar

246、d(“FASB”)issued Interpretation No.46,“Consolidation of Variable Interest Entities(revised December 2003)”(“FIN 46R”),which requires variable interest entities(“VIE”)to be consolidated by their primary beneficiaries.A primary beneficiary is the party that absorbs a majority of the entitys expected lo

247、sses or receives a majority of the entitys expected residual returns,or both,as a result of ownership,contractual or other financial interests in the entity.After adopting FIN 46R in the first quarter of 2004,Fresh Del Monte concluded that its investment in Davao Agricultural Ventures Corporation(“D

248、avco”),a previously unconsolidated 40%equity investment,fit the definition of a VIE pursuant to FIN 46R and began fully consolidating Davco.Financial statements of Fresh Del Monte for periods prior to March 2004 were not restated to reflect this change for the consolidation of Davco.See note 5,“Inve

249、stments in Unconsolidated Companies”and note 6,“Variable Interest Entity”.Principles of Consolidation The consolidated financial statements include the accounts of Fresh Del Monte,its majority-owned subsidiaries,which Fresh Del Monte controls,and a VIE.Fresh Del Montes fiscal year end is the last Fr

250、iday of the calendar year or the first Friday subsequent to the end of the calendar year,whichever is closest to the end of the calendar year.All significant intercompany accounts and transactions have been eliminated in consolidation.Use of Estimates Preparation of the financial statements in confo

251、rmity with United States of America generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes.Actual results could differ from these estimates.Cash and Cash Equivalents Fresh Del

252、Monte classifies as cash equivalents all highly-liquid investments with a maturity of three months or less at the time of purchase.Trade Receivables and Concentrations of Credit Risk Trade receivables are recognized on Fresh Del Montes accompanying consolidated balance sheets at fair value.Fresh Del

253、 Monte performs on-going credit evaluations of its customers and adjusts credit limits based upon payment history and the customers credit worthiness,as determined by its review of their current credit information.Fresh Del Monte continuously monitors collections and payments from its customers and

254、maintains a provision for estimated credit losses based upon its historical experience,specific customer collection issues that it has identified and reviews of agings of trade receivables based on contractual terms.Fresh Del Monte generally does not require collateral on trade accounts receivable.N

255、o single customers receivable balance is considered to be large enough to pose a significant credit risk to Fresh Del Monte.Notes to Consolidated Financial Statements2004 annual reportPA G E T H I R T Y F R E S H D E L M O N T E P R O D U C E I N C.A N D S U B S I D I A R I E S Inventories Inventori

256、es are valued at the lower of cost or market.Cost is computed using the weighted average cost method for fresh produce and the first-in first-out,actual cost or average cost methods for raw materials and packaging supplies.Raw materials and packaging supplies inventory consists primarily of agricult

257、ural supplies,containerboard,packaging materials and spare parts.Growing Crops Expenditures on pineapple,melon and non-tropical fruit growing crops are valued at the lower of cost or market and are deferred and charged to cost of products sold when the related crop is harvested and sold.The deferred

258、 growing costs consist primarily of land preparation,cultivation,irrigation and fertilization costs.Expenditures related to banana crops are expensed in the year incurred due to the continuous nature of the crop.Investments in Unconsolidated Companies Investments in unconsolidated companies are acco

259、unted for under the equity method of accounting for investments of 20%or more in companies over which Fresh Del Monte does not have control except for Davco.See note 5,“Investments in Unconsolidated Companies”.Property,Plant and Equipment Property,plant and equipment is stated at cost.Depreciation i

260、s recorded following the straight-line method over the estimated useful lives of the assets,which range from 10 to 40 years for buildings,5 to 20 years for ships and containers,2 to 20 years for machinery and equipment,5 to 7 years for furniture,fixtures and office equipment and 5 to 10 years for au

261、tomotive equipment.Leasehold improvements are amortized over the life of the lease,or the related asset,whichever is shorter.When assets are retired or disposed of,the costs and accumulated depreciation or amortization are removed from the respective accounts and any related gain or loss is recogniz

262、ed.Maintenance and repairs are charged to expense as incurred.Significant expenditures,which extend the useful lives of assets,are capitalized.Interest is capitalized as part of the cost of construction.Costs related to land improvements for bananas,pineapples and non-tropical fruit and other agricu

263、ltural projects are deferred during the formative stage and are amortized over the estimated life of the project.Purchase Accounting Pursuant to SFAS 141,“Business Combinations”,Fresh Del Monte allocates the purchase price to the fair values of assets it acquires based on appraisals from third parti

264、es as well as on certain internally generated information.Fresh Del Monte records exit costs and other related liabilities in connection with business combinations pursuant to EITF No.95-3,“Recognition of Liabilities in Connection with a Purchase Business Combination”.Fresh Del Monte estimates the e

265、conomic lives of certain acquired assets and these lives are used to calculate depreciation and amortization expense in periods subsequent to acquisitions.Estimates are revised,if necessary,in subsequent periods not exceeding one year,when pending information,if any,becomes available.Goodwill Fresh

266、Del Montes goodwill represents the excess of the purchase price over the fair value of the net assets of acquired businesses.Pursuant to Statement of Financial Accounting Standards(“SFAS”)No.142,“Accounting for Goodwill and Other Intangible Assets”,Fresh Del Monte ceased amortizing goodwill effectiv

267、e December 29,2001.Fresh Del Monte assesses goodwill for impairment with the assistance of an independent valuation firm on an annual basis on the first day of the fourth quarter of each fiscal year,or sooner if events indicate such a review is necessary.Based on this valuation,Fresh Del Monte deter

268、mined that no impairment of this asset existed as of December 31,2004.As of December 31,2004,Fresh Del Monte is not aware of any items or events that would cause it to adjust the recorded value of goodwill for impairment.Potential impairment exists if the fair value of a reporting unit to which good

269、will has been allo-cated,is less than the carrying value of the reporting unit.The amount of the impairment to recognize,if any,is calculated as the amount by which the carrying value of the goodwill exceeds its implied value.Fresh Del Monte assesses goodwill at the component level,which is one leve

270、l below its operating segments.Future changes in the estimates used to conduct the impairment review,including revenue projections,market values and changes in the discount rate used could cause the analysis to indicate that Fresh Del Montes goodwill is impaired in subsequent periods and result in a

271、 write-off of a portion or all of goodwill.The discount rate used is based on independently calculated risks,Fresh Del Montes capital mix and an estimated market premium.The assumptions used in estimating revenue projections are consistent with internal planning.As prescribed by SFAS No.142,Fresh De

272、l Monte completed the transitional goodwill impairment test by the second quarter of 2002.This review resulted in a non-cash impairment charge of$6.1 million for goodwill related to the other fresh Notes to Consolidated Financial Statements(continued)2004 annual reportF R E S H D E L M O N T E P R O

273、 D U C E I N C.A N D S U B S I D I A R I E S PA G E T H I R T Y-O N Eproduce reporting segment.This non-cash charge has been accounted for as a cumulative effect of a change in accounting principle in the accompanying consolidated statement of income for the year ended December 27,2002.There are num

274、erous uncertainties and inherent risks in conducting business,such as but not limited to general economic conditions,actions of competitors,ability to manage growth,actions of regulatory authorities,pending investigations and/or litigation,customer demand and risk relating to international operation

275、s.Adverse effects from these risks may result in adjustments to the carrying value of Fresh Del Montes assets and liabilities in the future including,but not necessarily limited to,goodwill.Long-Lived Assets Fresh Del Monte reviews long-lived assets for impairment whenever events or changes in circu

276、mstances indicate that the carrying amount of an asset may not be recoverable.If the carrying amount of an asset exceeds the assets fair value,Fresh Del Monte measures and records an impairment loss for the excess.An assets fair value is assessed by either determining the expected future undiscounte

277、d cash flow of the asset or by independent appraisal.Fresh Del Montes long-lived assets are primarily composed of property,plant and equipment and intangible assets other than goodwill.Intangible assets other than goodwill are composed of both those that are being amortized,including banana licenses

278、 and non-compete agreements,and an indefinite-life intangible of a perpetual,royalty-free brand name license related to the acquisition of Del Monte Foods.See note 3,“Acquisitions and Disposition”.Fresh Del Monte recorded charges related to impairment of long-lived assets in both 2004 and 2002.Based

279、 on continued operating losses and discontinued product lines in the United Kingdom,the United States and Brazil,related to the other fresh produce and banana categories,certain machinery and equipment was written down to its estimated fair value.As a result,a charge of$5.4 million for impairment of

280、 long-lived assets was recorded in 2004.Based on the then continued operating losses and decline in the estimated fair value of certain distribution facilities and other property in South Africa,South America and Central America,primarily related to the other fresh produce segment,a charge of$12.6 m

281、illion for impairment of long-lived assets was recorded in 2002.Such charges are included under the caption“Asset impairment charges”in the accompanying consolidated statements of income for the years ended December 31,2004 and December 27,2002,respectively.The estimated fair value of the related as

282、sets was based on either discounted future cash flows or appraisals from independent third parties.There are numerous uncertainties and inherent risks in conducting business,such as but not limited to general economic conditions,actions of competitors,ability to manage growth,actions of regulatory a

283、uthorities,pending investigations and/or litigation,customer demand and risk relating to international operations.Adverse effects from these risks may result in adjustments to the carrying value of Fresh Del Montes assets and liabilities in the future including,but not necessarily limited to,long-li

284、ved assets.Revenue Recognition Revenue is recognized on sales of products when the customer receives title to the goods,generally upon delivery and when collectibility is reasonably assured.Cost of Products Sold Cost of products sold includes the cost of produce,packaging materials,labor,depreciatio

285、n,over-head,transportation and other distribution costs,including handling costs incurred to deliver fresh produce or prepared products to customers.Advertising and Promotional Costs Fresh Del Monte expenses advertising and promotional costs as incurred.Debt Issue Costs Debt issue costs relating to

286、long-term debt are amortized over the term of the related debt instrument using the straight-line method as the costs are primarily related to the revolving credit facility and are included in other assets.Debt issue cost amortization,which is included in interest expense,was$1.0 million,$1.7 millio

287、n and$2.3 million,respec-tively for 2004,2003 and 2002.Income Taxes Deferred income taxes are recognized for the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each year end,based on enacted tax laws and statut

288、ory tax rates applicable to the year in which the differences are expected to affect taxable income.Valuation allow-ances are established when it is deemed more likely than not that future taxable income will not be sufficient to realize income tax benefits.PA G E T H I R T Y-T W O F R E S H D E L M

289、 O N T E P R O D U C E I N C.A N D S U B S I D I A R I E S Notes to Consolidated Financial Statements(continued)2004 annual reportFresh Del Monte recorded a$20.6 million net benefit in the 2004 third quarter,primarily due to the reversal of tax contingency accruals net of changes in deferred tax ass

290、ets for the settlement of a U.S.federal income tax audit for the years 1997 through 2001.See note 12,“Provision for Income Taxes”.Environmental Remediation Liabilities Losses associated with environmental remediation obligations are accrued when such losses are probable and can be reasonably estimat

291、ed.Fresh Del Monte recorded a provision of$7.0 million in 2002,related to the environmental remediation for the Kunia Well Site.See note 18,“Litigation”.Currency Translation For Fresh Del Montes operations in countries that are not highly inflationary and where the functional currency is other than

292、the U.S.dollar,balance sheet amounts are translated using the exchange rate in effect at the balance sheet date.Income statement amounts are translated monthly using the average exchange rate for the respective month.The gains and losses resulting from the changes in exchange rates from year-to-year

293、 are recorded as a component of accu-mulated other comprehensive income or loss as currency translation adjustments.For Fresh Del Montes operations where the functional currency is the U.S.dollar or where the operations are located in highly inflationary countries,non-monetary balance sheet amounts

294、are translated at historical exchange rates.Other balance sheet amounts are translated at the exchange rates in effect at the balance sheet date.Income statement accounts,excluding those items of income and expenses that relate to non-monetary assets and liabilities,are translated at the average exc

295、hange rate for the month.These remeasurement adjustments are included in the determination of net income under the caption“Other income,net”.Other income,net,in the accompanying consolidated statements of income includes$9.3 million,$7.2 million and$6.7 million in net gains on foreign exchange for 2

296、004,2003 and 2002,respectively.These amounts include the effect of foreign currency remeasurement,realized foreign currency transaction gains and losses and changes in the value of foreign currency denominated accounts receivable and accounts payable and related forward contracts.Other Income,Net In

297、 addition to foreign currency translation gains and losses,other income,net,primarily consists of equity in earnings of unconsolidated companies,gains and losses from sales of investments and property,plant and equipment,gains from recoveries under insurance policies and other items of non-operating

298、 income and expenses.Stock-Based Compensation Fresh Del Monte uses the intrinsic value method to account for employee stock options as prescribed in APB 25,“Accounting for Stock Issued to Employees”,and discloses information regarding the pro forma effect on net income and earnings per share determi

299、ned as if Fresh Del Monte had accounted for its employee stock options under the fair value method prescribed by SFAS 123,“Accounting for Stock-Based Compensation”.The fair values of the outstand-ing options are estimated at the date of grant using the Black-Scholes option valuation model.Although i

300、t is a widely-used model for estimating the fair value of stock options issued to employees for the pro forma disclosures required by SFAS 123,the Black-Scholes option valuation model was initially developed for use in estimating the fair value of traded options that have no vesting restrictions and

301、 are fully transferable and requires the input of highly subjective assumptions,including the expected volatility of an entitys stock price.Because Fresh Del Montes employee stock options have characteristics signifi-cantly different from those of traded options,and because changes in the subjective

302、 assumptions can materially affect the fair value estimate,in managements opinion,the existing models do not necessarily provide a single measure of the fair value of its employee stock options.The weighted average fair value of each option granted during 2004,2003 and 2002 is estimated at$9.53,$7.5

303、4 and$9.16,respectively,on the date of grant using the following assumptions in 2004,2003 and 2002,respectively:dividend yield of 3.30%,1.80%and 3.36%;expected volatility of 0.545,0.531 and 0.535;risk free interest rate of 3.61%,2.35%and 3.00%;and expected lives of two to five years.For purposes of

304、pro forma disclosures,the estimated fair value of the options is assumed to be amortized to expense over the options vesting period.The following information shows the effect on net income and earnings per share as if Fresh Del Monte had accounted for stock options issued to employees using the fair

305、 value method in 2004,2003 and 2002(U.S.dollars in millions,except share and per share data):F R E S H D E L M O N T E P R O D U C E I N C.A N D S U B S I D I A R I E S PA G E T H I R T Y-T H R E EYear ended December 31,December 26,December 27,2004 2003 2002 Reported net income$139.2$226.4$195.2Non-

306、cash compensation expense under intrinsic value method0.9Stock-based compensation expense under fair value method(0.9)(3.4)(3.0)Net income,pro forma$138.3$223.0$193.1 Net income per ordinary share,reported:Basic$2.42$4.00$3.52 Diluted$2.41$3.95$3.45 Weighted average ordinary shares,reported:Basic57,

307、487,131 56,539,691 55,445,106 Diluted57,803,158 57,346,377 56,538,659 Net income per ordinary share,pro forma:Basic$2.41$3.94$3.48 Diluted$2.39$3.89$3.42 Weighted average ordinary shares,pro forma:Basic57,487,131 56,539,691 55,445,106 Diluted57,754,766 57,346,377 56,538,659 Because the exercise pric

308、e of Fresh Del Montes employee stock options equaled the market price of the underlying stock on the date of grant,no compensation expense was recorded for stock options issued to employees during 2004,2003 and 2002 in connection with the 1997 Plan and the 1999 Plan.Compensation expense of$0.9 milli

309、on was recorded for the year ended December 27,2002 related to a modification of terms for stock options previously granted to a director.See note 16,“Stock-Based Compensation”for more information.Derivative Financial Instruments Fresh Del Monte recognizes derivative financial instruments as either

310、assets or liabilities on the accompanying consolidated balance sheets at fair value and accounts for those derivative financial instruments designated as hedging instruments depending on the nature of the hedge relationship.A fair value hedge requires that the effective portion of the change in the

311、fair value of a derivative financial instrument be offset against the change in the fair value of the underlying asset,liability,or firm commitment being hedged through earnings.A cash flow hedge requires that the effective portion of the change in the fair value of a derivative instrument be recogn

312、ized in other comprehensive income,a component of shareholders equity,and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings.The ineffective portion of a derivative financial instruments change in fair value is immediately recognized in earn

313、ings.Terminations of derivative financial instruments designated as hedges are immediately recognized in earnings.Reclassifications Certain amounts from 2003 and 2002 have been reclassified to conform to the 2004 presentation.New Accounting Pronouncements In March 2004,the FASBs Emerging Issues Task

314、 Force(“EITF”)reached a consensus on Issue No.03-01,“The Meaning of Other-Than-Temporary Impairments and Its Application to Certain Investments”.EITF 03-01 provides a three-step impairment model for determining whether an investment is other-than-temporarily impaired and requires the recognition of

315、such impairments as an impairment loss equal to the difference between the investments cost and fair value at the reporting date.The guidance is effective for Fresh Del Monte during the first quarter of fiscal 2005.PA G E T H I R T Y-F O U R F R E S H D E L M O N T E P R O D U C E I N C.A N D S U B

316、S I D I A R I E S Notes to Consolidated Financial Statements(continued)2004 annual reportFresh Del Monte does not believe that the adoption of EITF 03-01 will have a significant effect on its financial position,results of operations or cash flows.In May 2004,the FASB issued Staff Position 106-2,“Acc

317、ounting and Disclosure Requirements Related to the Medi-care Prescription Drug,Improvement and Modernization Act of 2003”,providing final guidance on accounting for the Medicare Prescription Drug,Improvement and Modernization Act of 2003(“the Act”).Fresh Del Monte adopted the provisions of FAS 106-2

318、 during the year ended December 31,2004 and recognized the effects of the federal subsidy provided by the Act in measuring its net periodic postretirement benefit cost for the year.This resulted in a reduction in Fresh Del Montes accu-mulated postretirement benefit obligation for the subsidy related

319、 to benefits attributable to past service of$1.4 million.There was an immaterial effect on net periodic postretirement benefit cost as the result of the Act as Fresh Del Monte suspended its postretirement medical program for employees not retired by January 1,2004.The Company expects to receive subs

320、idy payments beginning in the 2006 fiscal year.In November 2004,the FASB issued SFAS 151,“Inventory Costs-An Amendment of ARB No.43,Chapter 4”.SFAS 151 clarifies that abnormal amounts of idle facility expense,freight,handling costs and spoilage should be expensed as incurred and not included in over

321、head.Further,SFAS 151 requires that allocation of fixed and production facilities overhead to con-version costs should be based on normal capacity of the production facilities.The provisions of SFAS 151 are effective for inventory costs incurred during fiscal years beginning after June 15,2005.Fresh

322、 Del Monte is currently evaluating the impact,if any,that the adoption of SFAS 151 may have on its financial position,results of operations or cash flows.In December 2004,the FASB issued Staff Position No.FAS 109-2,“Accounting and Disclosure Guidance for the Foreign Earnings Repatriation Provision w

323、ithin the American Jobs Creation Act of 2004”.The American Jobs Creation Act of 2004 introduces a special one-time dividends received deduction on the repatriation of certain foreign earnings to a U.S.taxpayer,provided certain criteria are met.FAS 109-2 provides accounting and disclosure guidance fo

324、r the repatriation provi-sion,and was effective immediately upon issuance.Fresh Del Monte is incorporated outside of the United States and does not repatriate earnings for U.S.tax purposes.In December 2004,the FASB issued SFAS 123R,“Share-Based Payment”.SFAS 123R is a revision to SFAS 123 and supers

325、edes APB 25,“Accounting for Stock Issued to Employees”,and amends SFAS 95,“Statement of Cash Flows”.This statement requires a public entity to expense the cost of employee services received in exchange for an award of equity instruments.This statement also provides guidance on valuing and expensing

326、these awards,as well as disclosure requirements of these equity arrangements.This statement is effective for the first interim reporting period that begins after June 15,2005.SFAS 123R permits public companies to choose between the following two adoption methods:1.A“modified prospective”method in wh

327、ich compensation cost is recognized beginning with the effective date(a)based on the requirements of SFAS 123R for all share-based payments granted after the effective date and (b)based on the requirements of Statement 123 for all awards granted to employees prior to the effective date of SFAS 123R

328、that remain unvested on the effective date,or2.A“modified retrospective”method which includes the requirements of the modified prospective method described above,but also permits entities to restate based on the amounts previously recognized under SFAS 123 for purposes of pro forma disclosures eithe

329、r(a)all prior periods presented or(b)prior interim periods of the year of adoption.Fresh Del Monte currently accounts for share-based payments to employees using APB 25s intrinsic value method and,as such,generally recognizes no compensation expense for employee stock options.The impact of the adopt

330、ion of SFAS 123R on Fresh Del Monte cannot be predicted at this time because it will depend on levels of share-based payments granted in the future.For information about what Fresh Del Montes reported results of operations and earnings per share would have been had the fair value provisions of SFAS

331、123 been applied,see the section titled“Stock-Based Compensation”above.The adoption of SFAS 123Rs fair value method will have an impact,possibly material,on Fresh Del Montes results of operations but no impact on our overall financial position.SFAS 123R also requires the benefits of tax deductions i

332、n excess of recognized compensation expense,if any,to be reported as a financing cash flow,rather than as an operating cash flow as required under current literature.This requirement may reduce net operating cash flows and increase net financing F R E S H D E L M O N T E P R O D U C E I N C.A N D S

333、U B S I D I A R I E S PA G E T H I R T Y-F I V Ecash flows in the consolidated statements of cash flows of periods after adoption.Due to timing of the release of SFAS 123R and the choice between the two adoption methods,Fresh Del Monte has not yet completed the analysis of the ultimate impact that this new pronouncement will have on its results of operations.3.ACQUISITIONS AND DISPOSITION2004 Acqu