10-Q 1 fdp-20220401.htm 10-Q fdp-20220401
0001047340December 302022Q1FALSE00010473402022-01-012022-04-0100010473402022-04-22xbrli:shares00010473402022-04-01iso4217:USD00010473402021-12-31iso4217:USDxbrli:shares00010473402021-01-022021-04-0200010473402021-01-0100010473402021-04-020001047340us-gaap:CommonStockMember2021-12-310001047340us-gaap:AdditionalPaidInCapitalMember2021-12-310001047340us-gaap:RetainedEarningsMember2021-12-310001047340us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-310001047340us-gaap:ParentMember2021-12-310001047340us-gaap:NoncontrollingInterestMember2021-12-310001047340fdp:ParentIncludingNoncontrollingInterestMember2021-12-310001047340us-gaap:RedeemablePreferredStockMemberus-gaap:NoncontrollingInterestMember2021-12-310001047340us-gaap:CommonStockMember2022-01-012022-04-010001047340us-gaap:AdditionalPaidInCapitalMember2022-01-012022-04-010001047340us-gaap:ParentMember2022-01-012022-04-010001047340fdp:ParentIncludingNoncontrollingInterestMember2022-01-012022-04-010001047340us-gaap:RetainedEarningsMember2022-01-012022-04-010001047340us-gaap:NoncontrollingInterestMember2022-01-012022-04-010001047340us-gaap:RedeemablePreferredStockMemberus-gaap:NoncontrollingInterestMember2022-01-012022-04-010001047340us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-012022-04-010001047340us-gaap:CommonStockMember2022-04-010001047340us-gaap:AdditionalPaidInCapitalMember2022-04-010001047340us-gaap:RetainedEarningsMember2022-04-010001047340us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-04-010001047340us-gaap:ParentMember2022-04-010001047340us-gaap:NoncontrollingInterestMember2022-04-010001047340fdp:ParentIncludingNoncontrollingInterestMember2022-04-010001047340us-gaap:RedeemablePreferredStockMemberus-gaap:NoncontrollingInterestMember2022-04-010001047340us-gaap:CommonStockMember2021-01-010001047340us-gaap:AdditionalPaidInCapitalMember2021-01-010001047340us-gaap:RetainedEarningsMember2021-01-010001047340us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-010001047340us-gaap:ParentMember2021-01-010001047340us-gaap:NoncontrollingInterestMember2021-01-010001047340fdp:ParentIncludingNoncontrollingInterestMember2021-01-010001047340us-gaap:RedeemablePreferredStockMemberus-gaap:NoncontrollingInterestMember2021-01-010001047340us-gaap:CommonStockMember2021-01-022021-04-020001047340us-gaap:AdditionalPaidInCapitalMember2021-01-022021-04-020001047340us-gaap:ParentMember2021-01-022021-04-020001047340fdp:ParentIncludingNoncontrollingInterestMember2021-01-022021-04-020001047340us-gaap:RetainedEarningsMember2021-01-022021-04-020001047340us-gaap:NoncontrollingInterestMember2021-01-022021-04-020001047340us-gaap:RedeemablePreferredStockMemberus-gaap:NoncontrollingInterestMember2021-01-022021-04-020001047340us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-022021-04-020001047340us-gaap:CommonStockMember2021-04-020001047340us-gaap:AdditionalPaidInCapitalMember2021-04-020001047340us-gaap:RetainedEarningsMember2021-04-020001047340us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-04-020001047340us-gaap:ParentMember2021-04-020001047340us-gaap:NoncontrollingInterestMember2021-04-020001047340fdp:ParentIncludingNoncontrollingInterestMember2021-04-020001047340us-gaap:RedeemablePreferredStockMemberus-gaap:NoncontrollingInterestMember2021-04-02fdp:segment0001047340srt:CentralAmericaMemberus-gaap:InsuranceSettlementMemberfdp:BananaMember2022-01-012022-04-010001047340srt:CentralAmericaMemberus-gaap:InsuranceSettlementMemberfdp:BananaMember2021-01-022021-04-020001047340fdp:FreshandValueAddedProductsMember2022-01-012022-04-010001047340fdp:FreshandValueAddedProductsMember2021-01-022021-04-020001047340fdp:OtherSegmentsMember2022-01-012022-04-010001047340fdp:OtherSegmentsMember2021-01-022021-04-020001047340us-gaap:ForeignCountryMember2022-01-012022-04-01fdp:jurisdiction0001047340srt:MinimumMember2022-01-012022-04-010001047340fdp:LongTermAdvancesToGrowersMembersrt:MaximumMember2022-01-012022-04-010001047340fdp:AdvancesToGrowersMember2022-04-010001047340fdp:AdvancesToGrowersMember2021-12-310001047340fdp:AdvancesToGrowersMember2021-01-010001047340fdp:AdvancesToGrowersMember2022-01-012022-04-010001047340fdp:AdvancesToGrowersMember2021-01-022021-04-020001047340fdp:AdvancesToGrowersMember2021-04-020001047340fdp:SellingGeneralAndAdministrativeExpenseMemberfdp:RestrictedStockUnitsRSUsandPerformanceStockUnitsPSUsMember2022-01-012022-04-010001047340fdp:SellingGeneralAndAdministrativeExpenseMemberfdp:RestrictedStockUnitsRSUsandPerformanceStockUnitsPSUsMember2021-01-022021-04-020001047340fdp:SellingGeneralAndAdministrativeExpenseMember2022-01-012022-04-010001047340fdp:SellingGeneralAndAdministrativeExpenseMember2021-01-022021-04-020001047340fdp:TwoThousandFourteenOmnibusShareIncentivePlan2014PlanMemberus-gaap:RestrictedStockUnitsRSUMember2021-03-302021-03-300001047340fdp:TwoThousandFourteenOmnibusShareIncentivePlan2014PlanMemberus-gaap:RestrictedStockUnitsRSUMember2021-03-012021-03-010001047340fdp:TwoThousandFourteenOmnibusShareIncentivePlan2014PlanMemberfdp:PerformanceStockUnitsPSUsMember2021-03-012021-03-010001047340fdp:TwoThousandFourteenOmnibusShareIncentivePlanMember2022-01-012022-04-010001047340srt:MinimumMemberus-gaap:RestrictedStockUnitsRSUMember2022-01-012022-04-01xbrli:pure0001047340srt:MaximumMemberus-gaap:RestrictedStockUnitsRSUMember2022-01-012022-04-010001047340us-gaap:PerformanceSharesMember2022-01-012022-04-01fdp:installmentfdp:anniversaryDate0001047340us-gaap:RestrictedStockUnitsRSUMember2022-01-012022-04-010001047340fdp:TwoThousandFourteenOmnibusShareIncentivePlanMemberus-gaap:RestrictedStockUnitsRSUMember2022-01-012022-04-010001047340us-gaap:UnsecuredDebtMemberus-gaap:RevolvingCreditFacilityMember2019-10-012019-10-010001047340us-gaap:UnsecuredDebtMemberus-gaap:RevolvingCreditFacilityMember2019-10-010001047340srt:MinimumMemberus-gaap:EurodollarMember2019-10-010001047340srt:MaximumMemberus-gaap:EurodollarMember2019-10-010001047340srt:MinimumMemberus-gaap:BaseRateMember2019-10-010001047340srt:MaximumMemberus-gaap:BaseRateMember2019-10-010001047340us-gaap:UnsecuredDebtMembersrt:MaximumMember2019-10-012019-10-010001047340us-gaap:RevolvingCreditFacilityMembersrt:MaximumMember2019-10-012019-10-010001047340us-gaap:UnsecuredDebtMemberus-gaap:RevolvingCreditFacilityMembersrt:MinimumMember2019-10-012019-10-010001047340srt:MaximumMember2019-10-012019-10-010001047340us-gaap:UnsecuredDebtMemberus-gaap:RevolvingCreditFacilityMembersrt:MaximumMember2019-10-012019-10-010001047340us-gaap:UnsecuredDebtMemberus-gaap:RevolvingCreditFacilityMemberus-gaap:OtherNoncurrentAssetsMember2022-04-010001047340us-gaap:UnsecuredDebtMemberus-gaap:RevolvingCreditFacilityMemberus-gaap:OtherNoncurrentAssetsMember2021-12-310001047340fdp:RabobankNederlandMember2020-06-162020-06-160001047340fdp:RabobankNederlandMember2020-06-160001047340us-gaap:UnsecuredDebtMemberus-gaap:RevolvingCreditFacilityMember2022-01-012022-04-010001047340us-gaap:UnsecuredDebtMemberus-gaap:RevolvingCreditFacilityMember2022-04-010001047340fdp:RabobankNederlandMember2022-01-012022-04-010001047340fdp:RabobankNederlandMember2022-04-010001047340fdp:OtherWorkingCapitalFacilitiesMember2022-04-010001047340us-gaap:UnsecuredDebtMemberus-gaap:RevolvingCreditFacilityMemberus-gaap:LondonInterbankOfferedRateLIBORMember2022-01-012022-04-010001047340fdp:KuniawellsiteMember1980-01-011980-12-31fdp:subsidiary0001047340fdp:KuniawellsiteMember2022-04-010001047340us-gaap:OtherNoncurrentLiabilitiesMemberfdp:KuniawellsiteMember2022-04-010001047340us-gaap:AccountsPayableAndAccruedLiabilitiesMemberfdp:KuniawellsiteMember2022-04-010001047340country:US2022-01-012022-04-010001047340country:US2021-01-022021-04-020001047340us-gaap:ForeignPlanMember2022-01-012022-04-010001047340us-gaap:ForeignPlanMember2021-01-022021-04-020001047340fdp:BananaMember2022-01-012022-04-010001047340fdp:BananaMember2021-01-022021-04-020001047340fdp:OtherProductsandServicesMember2022-01-012022-04-010001047340fdp:OtherProductsandServicesMember2021-01-022021-04-020001047340srt:RevisionOfPriorPeriodErrorCorrectionAdjustmentMemberfdp:FreshandValueAddedProductsMember2021-01-022021-04-020001047340srt:RevisionOfPriorPeriodErrorCorrectionAdjustmentMemberfdp:BananaMember2021-01-022021-04-020001047340srt:RevisionOfPriorPeriodErrorCorrectionAdjustmentMemberfdp:OtherProductsandServicesMember2021-01-022021-04-020001047340srt:NorthAmericaMember2022-01-012022-04-010001047340srt:NorthAmericaMember2021-01-022021-04-020001047340srt:EuropeMember2022-01-012022-04-010001047340srt:EuropeMember2021-01-022021-04-020001047340srt:AsiaMember2022-01-012022-04-010001047340srt:AsiaMember2021-01-022021-04-020001047340us-gaap:MiddleEastMember2022-01-012022-04-010001047340us-gaap:MiddleEastMember2021-01-022021-04-020001047340fdp:OtherLocationsMember2022-01-012022-04-010001047340fdp:OtherLocationsMember2021-01-022021-04-020001047340fdp:FreshCutFruitMemberfdp:FreshandValueAddedProductsMember2022-01-012022-04-010001047340fdp:FreshCutFruitMemberfdp:FreshandValueAddedProductsMemberus-gaap:SalesRevenueNetMemberus-gaap:ProductConcentrationRiskMember2022-01-012022-04-010001047340fdp:FreshCutFruitMemberfdp:FreshandValueAddedProductsMember2021-01-022021-04-020001047340fdp:FreshCutFruitMemberfdp:FreshandValueAddedProductsMemberus-gaap:SalesRevenueNetMemberus-gaap:ProductConcentrationRiskMember2021-01-022021-04-020001047340fdp:FreshandValueAddedProductsMemberfdp:FreshCutVegetablesMember2022-01-012022-04-010001047340fdp:FreshandValueAddedProductsMemberus-gaap:SalesRevenueNetMemberus-gaap:ProductConcentrationRiskMemberfdp:FreshCutVegetablesMember2022-01-012022-04-010001047340fdp:FreshandValueAddedProductsMemberfdp:FreshCutVegetablesMember2021-01-022021-04-020001047340fdp:FreshandValueAddedProductsMemberus-gaap:SalesRevenueNetMemberus-gaap:ProductConcentrationRiskMemberfdp:FreshCutVegetablesMember2021-01-022021-04-020001047340fdp:FreshandValueAddedProductsMemberfdp:GoldPineapplesMember2022-01-012022-04-010001047340fdp:FreshandValueAddedProductsMemberus-gaap:SalesRevenueNetMemberfdp:GoldPineapplesMemberus-gaap:ProductConcentrationRiskMember2022-01-012022-04-010001047340fdp:FreshandValueAddedProductsMemberfdp:GoldPineapplesMember2021-01-022021-04-020001047340fdp:FreshandValueAddedProductsMemberus-gaap:SalesRevenueNetMemberfdp:GoldPineapplesMemberus-gaap:ProductConcentrationRiskMember2021-01-022021-04-020001047340fdp:FreshandValueAddedProductsMemberfdp:AvocadosMember2022-01-012022-04-010001047340fdp:FreshandValueAddedProductsMemberus-gaap:SalesRevenueNetMemberus-gaap:ProductConcentrationRiskMemberfdp:AvocadosMember2022-01-012022-04-010001047340fdp:FreshandValueAddedProductsMemberfdp:AvocadosMember2021-01-022021-04-020001047340fdp:FreshandValueAddedProductsMemberus-gaap:SalesRevenueNetMemberus-gaap:ProductConcentrationRiskMemberfdp:AvocadosMember2021-01-022021-04-020001047340fdp:FreshandValueAddedProductsMemberfdp:NonTropicalFruitMember2022-01-012022-04-010001047340fdp:FreshandValueAddedProductsMemberus-gaap:SalesRevenueNetMemberus-gaap:ProductConcentrationRiskMemberfdp:NonTropicalFruitMember2022-01-012022-04-010001047340fdp:FreshandValueAddedProductsMemberfdp:NonTropicalFruitMember2021-01-022021-04-020001047340fdp:FreshandValueAddedProductsMemberus-gaap:SalesRevenueNetMemberus-gaap:ProductConcentrationRiskMemberfdp:NonTropicalFruitMember2021-01-022021-04-020001047340fdp:FreshandValueAddedProductsMemberfdp:PreparedFoodMember2022-01-012022-04-010001047340fdp:FreshandValueAddedProductsMemberus-gaap:SalesRevenueNetMemberus-gaap:ProductConcentrationRiskMemberfdp:PreparedFoodMember2022-01-012022-04-010001047340fdp:FreshandValueAddedProductsMemberfdp:PreparedFoodMember2021-01-022021-04-020001047340fdp:FreshandValueAddedProductsMemberus-gaap:SalesRevenueNetMemberus-gaap:ProductConcentrationRiskMemberfdp:PreparedFoodMember2021-01-022021-04-020001047340fdp:FreshandValueAddedProductsMemberfdp:MelonsMember2022-01-012022-04-010001047340fdp:FreshandValueAddedProductsMemberfdp:MelonsMemberus-gaap:SalesRevenueNetMemberus-gaap:ProductConcentrationRiskMember2022-01-012022-04-010001047340fdp:FreshandValueAddedProductsMemberfdp:MelonsMember2021-01-022021-04-020001047340fdp:FreshandValueAddedProductsMemberfdp:MelonsMemberus-gaap:SalesRevenueNetMemberus-gaap:ProductConcentrationRiskMember2021-01-022021-04-020001047340fdp:TomatoesMemberfdp:FreshandValueAddedProductsMember2022-01-012022-04-010001047340fdp:TomatoesMemberfdp:FreshandValueAddedProductsMemberus-gaap:SalesRevenueNetMemberus-gaap:ProductConcentrationRiskMember2022-01-012022-04-010001047340fdp:TomatoesMemberfdp:FreshandValueAddedProductsMember2021-01-022021-04-020001047340fdp:TomatoesMemberfdp:FreshandValueAddedProductsMemberus-gaap:SalesRevenueNetMemberus-gaap:ProductConcentrationRiskMember2021-01-022021-04-020001047340fdp:FreshandValueAddedProductsMemberfdp:VegetablesMember2022-01-012022-04-010001047340fdp:FreshandValueAddedProductsMemberus-gaap:SalesRevenueNetMemberus-gaap:ProductConcentrationRiskMemberfdp:VegetablesMember2022-01-012022-04-010001047340fdp:FreshandValueAddedProductsMemberfdp:VegetablesMember2021-01-022021-04-020001047340fdp:FreshandValueAddedProductsMemberus-gaap:SalesRevenueNetMemberus-gaap:ProductConcentrationRiskMemberfdp:VegetablesMember2021-01-022021-04-020001047340fdp:FreshandValueAddedProductsMemberfdp:OtherFruitProductsandServicesMember2022-01-012022-04-010001047340fdp:FreshandValueAddedProductsMemberus-gaap:SalesRevenueNetMemberus-gaap:ProductConcentrationRiskMemberfdp:OtherFruitProductsandServicesMember2022-01-012022-04-010001047340fdp:FreshandValueAddedProductsMemberfdp:OtherFruitProductsandServicesMember2021-01-022021-04-020001047340fdp:FreshandValueAddedProductsMemberus-gaap:SalesRevenueNetMemberus-gaap:ProductConcentrationRiskMemberfdp:OtherFruitProductsandServicesMember2021-01-022021-04-020001047340fdp:FreshandValueAddedProductsMemberus-gaap:SalesRevenueNetMemberus-gaap:ProductConcentrationRiskMember2022-01-012022-04-010001047340fdp:FreshandValueAddedProductsMemberus-gaap:SalesRevenueNetMemberus-gaap:ProductConcentrationRiskMember2021-01-022021-04-020001047340us-gaap:SalesRevenueNetMemberus-gaap:ProductConcentrationRiskMemberfdp:BananaMember2022-01-012022-04-010001047340us-gaap:SalesRevenueNetMemberus-gaap:ProductConcentrationRiskMemberfdp:BananaMember2021-01-022021-04-020001047340us-gaap:SalesRevenueNetMemberus-gaap:ProductConcentrationRiskMemberfdp:OtherProductsandServicesMember2022-01-012022-04-010001047340us-gaap:SalesRevenueNetMemberus-gaap:ProductConcentrationRiskMemberfdp:OtherProductsandServicesMember2021-01-022021-04-020001047340us-gaap:SalesRevenueNetMemberus-gaap:ProductConcentrationRiskMember2022-01-012022-04-010001047340us-gaap:SalesRevenueNetMemberus-gaap:ProductConcentrationRiskMember2021-01-022021-04-020001047340us-gaap:ForeignExchangeContractMember2022-04-01iso4217:EURiso4217:GBPiso4217:JPYiso4217:CLPiso4217:KESiso4217:KRW0001047340us-gaap:InterestRateContractMember2022-04-010001047340fdp:TwoThousandTwentyFourMemberus-gaap:InterestRateContractMember2022-04-010001047340us-gaap:InterestRateContractMemberfdp:TwoThousandTwentyEightMember2022-04-010001047340us-gaap:PrepaidExpensesAndOtherCurrentAssetsMember2022-04-010001047340us-gaap:PrepaidExpensesAndOtherCurrentAssetsMember2021-12-310001047340us-gaap:OtherNoncurrentAssetsMember2022-04-010001047340us-gaap:OtherNoncurrentAssetsMember2021-12-310001047340us-gaap:AccountsPayableAndAccruedLiabilitiesMember2022-04-010001047340us-gaap:AccountsPayableAndAccruedLiabilitiesMember2021-12-310001047340us-gaap:OtherNoncurrentLiabilitiesMember2022-04-010001047340us-gaap:OtherNoncurrentLiabilitiesMember2021-12-310001047340us-gaap:ForeignExchangeContractMember2022-01-012022-04-010001047340us-gaap:ForeignExchangeContractMember2021-01-022021-04-020001047340us-gaap:PriceRiskDerivativeMember2022-01-012022-04-010001047340us-gaap:PriceRiskDerivativeMember2021-01-022021-04-020001047340us-gaap:InterestRateSwapMember2022-01-012022-04-010001047340us-gaap:InterestRateSwapMember2021-01-022021-04-020001047340us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2022-04-010001047340us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2021-12-310001047340us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2022-04-010001047340us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2021-12-310001047340us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2022-04-010001047340us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2021-12-310001047340us-gaap:PropertyPlantAndEquipmentMember2022-04-010001047340us-gaap:PropertyPlantAndEquipmentMembercountry:US2022-04-010001047340us-gaap:PropertyPlantAndEquipmentMembercountry:MX2022-04-010001047340srt:SouthAmericaMemberus-gaap:PropertyPlantAndEquipmentMember2022-04-010001047340fdp:AsiaAndCentralAmericaDomainus-gaap:PropertyPlantAndEquipmentMember2022-04-010001047340us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2021-12-310001047340us-gaap:AccumulatedTranslationAdjustmentMember2021-12-310001047340us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2021-12-310001047340us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2022-01-012022-04-010001047340us-gaap:AccumulatedTranslationAdjustmentMember2022-01-012022-04-010001047340us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2022-01-012022-04-010001047340us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2022-04-010001047340us-gaap:AccumulatedTranslationAdjustmentMember2022-04-010001047340us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2022-04-010001047340us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2021-01-010001047340us-gaap:AccumulatedTranslationAdjustmentMember2021-01-010001047340us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2021-01-010001047340us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2021-01-022021-04-020001047340us-gaap:AccumulatedTranslationAdjustmentMember2021-01-022021-04-020001047340us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2021-01-022021-04-020001047340us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2021-04-020001047340us-gaap:AccumulatedTranslationAdjustmentMember2021-04-020001047340us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2021-04-020001047340us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2022-01-012022-04-010001047340us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2021-01-022021-04-020001047340us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMemberus-gaap:NondesignatedMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2022-01-012022-04-010001047340us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMemberus-gaap:NondesignatedMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2021-01-022021-04-020001047340us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2022-01-012022-04-010001047340us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2021-01-022021-04-0200010473402022-04-012022-04-0100010473402021-04-022021-04-020001047340us-gaap:SubsequentEventMember2022-05-032022-05-03

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
———————————
FORM 10-Q
———————————
(Mark One)
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended April 01, 2022
OR
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to             

333-07708
(Commission file number)
———————————
FRESH DEL MONTE PRODUCE INC.
(Exact Name of Registrant as Specified in Its Charter)
 ———————————
Cayman IslandsN/A
(State or Other Jurisdiction of
Incorporation or Organization)
(I.R.S Employer
Identification No.)
c/o H&C Corporate Services Limited
P.O. Box 698, 4th Floor, Apollo House, 87 Mary Street
George Town,Grand Cayman,KY1-1107
Cayman IslandsN/A
(Address of Registrant’s Principal Executive Office)(Zip Code)

(305) 520-8400
(Registrant’s telephone number including area code)
Please send copies of notices and communications from the Securities and Exchange Commission to:
c/o Del Monte Fresh Produce Company
241 Sevilla Avenue
Coral Gables, Florida 33134
(Address of Registrant’s U.S. Executive Office)

 ——————————— 

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Ordinary Shares, $0.01 Par Value Per ShareFDPNew York Stock Exchange


Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. 
Large accelerated filerAccelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  

As of April 22, 2022, there were 47,818,861 ordinary shares of Fresh Del Monte Produce Inc. issued and outstanding.







TABLE OF CONTENTS
Page
PART I: FINANCIAL INFORMATION
Item 1. Financial Statements
 
 
PART II. OTHER INFORMATION


PART I: FINANCIAL INFORMATION

Item 1.        Financial Statements

FRESH DEL MONTE PRODUCE INC. AND SUBSIDIARIES
 
CONSOLIDATED BALANCE SHEETS (Unaudited)
(U.S. dollars in millions, except share and per share data)
April 1,
2022
December 31,
2021
Assets  
Current assets:  
Cash and cash equivalents$25.3 $16.1 
Trade accounts receivable, net of allowance of
$24.3 and $21.8, respectively
415.8 342.9 
Other accounts receivable, net of allowance of
$3.3 and $3.8, respectively
105.1 94.4 
Inventories, net620.5 602.8 
Assets held for sale18.2 16.2 
Prepaid expenses and other current assets33.1 24.0 
Total current assets1,218.0 1,096.4 
Investments in and advances to unconsolidated companies15.8 8.7 
Property, plant and equipment, net1,396.9 1,415.8 
Operating lease right-of-use assets199.1 199.0 
Goodwill423.4 423.7 
Intangible assets, net140.9 142.8 
Deferred income taxes51.6 53.8 
Other noncurrent assets56.1 57.9 
Total assets$3,501.8 $3,398.1 
Liabilities and shareholders' equity  
Current liabilities:  
Accounts payable and accrued expenses$622.2 $580.1 
Current maturities of debt and finance leases1.3 1.3 
Current maturities of operating leases36.8 37.0 
Income taxes and other taxes payable16.0 10.8 
Total current liabilities676.3 629.2 
Long-term debt and finance leases562.3 527.7 
Retirement benefits90.8 90.0 
Deferred income taxes67.4 69.6 
Operating leases, less current maturities137.6 136.0 
Other noncurrent liabilities44.1 72.1 
Total liabilities1,578.5 1,524.6 
Commitments and contingencies (See note 9)
Redeemable noncontrolling interest48.7 49.5 
Shareholders' 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;
47,817,843
and 47,554,695 issued and outstanding, respectively
0.5 0.5 
Paid-in capital542.7 541.0 
Retained earnings1,346.3 1,327.7 
Accumulated other comprehensive loss(36.6)(66.9)
Total Fresh Del Monte Produce Inc. shareholders' equity1,852.9 1,802.3 
Noncontrolling interests21.7 21.7 
Total shareholders' equity1,874.6 1,824.0 
Total liabilities, redeemable noncontrolling interest and shareholders' equity
$3,501.8 $3,398.1 
See accompanying notes.
1

FRESH DEL MONTE PRODUCE INC. AND SUBSIDIARIES
 
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(U.S. dollars in millions, except share and per share data)
 Quarter ended
April 1,
2022
April 2,
2021
Net sales$1,136.9 $1,088.3 
Cost of products sold1,047.1 983.3 
Gross profit89.8 105.0 
Selling, general and administrative expenses45.2 48.9 
(Loss) gain on disposal of property, plant and equipment, net(3.8)2.7 
Asset impairment and other charges (credits), net1.0 (0.9)
Operating income39.8 59.7 
Interest expense5.3 5.4 
Interest income 0.2 
Other expense, net4.0 2.1 
Income before income taxes30.5 52.4 
Income tax provision5.8 11.0 
Net income$24.7 $41.4 
Less: Net loss attributable to redeemable and noncontrolling interests(1.1)(1.3)
    Net income attributable to Fresh Del Monte Produce Inc. $25.8 $42.7 
    Net income per ordinary share attributable to Fresh Del Monte Produce Inc. - Basic$0.54 $0.90 
    Net income per ordinary share attributable to Fresh Del Monte Produce Inc. - Diluted$0.54 $0.90 
Dividends declared per ordinary share$0.15 $0.10 
Weighted average number of ordinary shares:  
Basic 47,665,122 47,427,962 
Diluted 47,856,286 47,539,871 

See accompanying notes.
2

FRESH DEL MONTE PRODUCE INC. AND SUBSIDIARIES
 
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)
(U.S. dollars in millions)
Quarter ended
April 1,
2022
April 2,
2021
Net income$24.7 $41.4 
Other comprehensive income (loss):
Net unrealized gain on derivatives, net of tax37.8 25.6 
Net unrealized foreign currency translation loss(7.4)(4.8)
Net change in retirement benefit adjustment, net of tax(0.1)(0.6)
Comprehensive income$55.0 $61.6 
Less: Comprehensive loss attributable to redeemable and noncontrolling interests(1.1)(1.3)
Comprehensive income attributable to Fresh Del Monte Produce Inc.$56.1 $62.9 
    

See accompanying notes.

3

FRESH DEL MONTE PRODUCE INC. AND SUBSIDIARIES
 
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(U.S. dollars in millions)
 Quarter ended
April 1,
2022
April 2,
2021
Operating activities:  
Net income$24.7 $41.4 
Adjustments to reconcile net income to net cash (used in) provided by operating activities:  
Depreciation and amortization23.6 23.8 
Amortization of debt issuance costs0.1 0.1 
Share-based compensation expense1.7 1.6 
Change in uncertain tax positions0.1 1.6 
Loss (gain) on disposal of property, plant and equipment3.8 (2.7)
Deferred income taxes(3.3)(0.5)
Foreign currency translation adjustment(5.3)0.3 
Other, net2.3 (0.8)
Changes in operating assets and liabilities
  
Receivables(82.2)(69.6)
Inventories(19.2)(6.7)
Prepaid expenses and other current assets(0.5)3.8 
Accounts payable and accrued expenses53.5 57.5 
Other assets and liabilities0.4 (3.0)
Net cash (used in) provided by operating activities(0.3)46.8 
Investing activities:  
Capital expenditures(11.1)(33.6)
Proceeds from sales of property, plant and equipment1.6 2.9 
Cash received from settlement of derivatives not designated as hedges 4.6 
Investments in unconsolidated companies(7.1) 
Other investing activities 0.2 
Net cash used in investing activities(16.6)(25.9)
Financing activities:  
Proceeds from debt262.5 185.7 
Payments on debt(227.5)(193.4)
     Distributions to noncontrolling interests (0.9)
Share-based awards settled in cash for taxes(0.8)(0.3)
Dividends paid(7.2)(4.7)
Other financing activities(0.3)0.9 
Net cash provided by (used in) financing activities26.7 (12.7)
Effect of exchange rate changes on cash(0.6)1.7 
Net increase in cash and cash equivalents9.2 9.9 
Cash and cash equivalents, beginning16.1 16.5 
Cash and cash equivalents, ending$25.3 $26.4 
Supplemental cash flow information:  
Cash paid for interest$6.4 $6.7 
Cash paid for income taxes$2.5 $1.8 
Non-cash financing and investing activities:  
Right-of-use assets obtained in exchange for new operating lease obligations$10.8 $8.4 
Dividends on restricted stock units$ $0.2 
See accompanying notes.
4

FRESH DEL MONTE PRODUCE INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY AND REDEEMABLE NONCONTROLLING INTEREST
(Unaudited) (U.S. dollars in millions, except share data)

 Ordinary Shares OutstandingOrdinary SharesPaid-in CapitalRetained EarningsAccumulated Other Comprehensive LossFresh Del Monte Produce Inc. Shareholders' EquityNoncontrolling InterestsTotal Shareholders'
Equity
Redeemable Noncontrolling Interest
Balance as of December 31, 202147,554,695 $0.5 $541.0 $1,327.7 $(66.9)$1,802.3 $21.7 $1,824.0 $49.5 
Settlement of restricted stock units263,148 — — — — — — — — 
Share-based payment expense— — 1.7 — — 1.7 — 1.7 — 
Disposal of noncontrolling interest— — — — — — 0.3 0.3 — 
Dividend declared— —  (7.2)— (7.2)— (7.2)— 
Comprehensive income:
Net income (loss)— — — 25.8 — 25.8 (0.3)25.5 (0.8)
Unrealized gain on derivatives, net of tax— — — — 37.8 37.8 — 37.8 — 
Net unrealized foreign currency translation loss— — — — (7.4)(7.4)— (7.4)— 
Change in retirement benefit adjustment, net of tax— — — — (0.1)(0.1)— (0.1)— 
Comprehensive income (loss)    56.1 (0.3)55.8 (0.8)
Balance as of April 1, 202247,817,843 $0.5 $542.7 $1,346.3 $(36.6)$1,852.9 $21.7 $1,874.6 $48.7 

 Ordinary Shares OutstandingOrdinary SharesPaid-in CapitalRetained EarningsAccumulated Other Comprehensive LossFresh Del Monte Produce Inc. Shareholders' EquityNoncontrolling InterestsTotal Shareholders'
Equity
Redeemable Noncontrolling Interest
Balance as of January 1, 202147,372,419 $0.5 $533.1 $1,271.4 $(77.0)$1,728.0 $21.7 $1,749.7 $50.2 
Settlement of restricted stock units136,067 — — — — — — — — 
Share-based payment expense— — 1.6 — — 1.6 — 1.6 — 
Dividend declared— — 0.2 (4.9)— (4.7)— (4.7)— 
Comprehensive income:
Net income (loss)— — — 42.7 — 42.7 (0.6)42.1 (0.7)
Unrealized gain on derivatives, net of tax— — — — 25.6 25.6 — 25.6 — 
Net unrealized foreign currency translation loss— — — — (4.8)(4.8)— (4.8)— 
Change in retirement benefit adjustment, net of tax— — — — (0.6)(0.6)— (0.6)— 
Comprehensive income (loss)    62.9 (0.6)62.3 (0.7)
Balance as of April 2, 202147,508,486 $0.5 $534.9 $1,309.2 $(56.8)$1,787.8 $21.1 $1,808.9 $49.5 
See accompanying notes.

5

FRESH DEL MONTE PRODUCE INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)


1.  General
 
Reference in this Report to “Fresh Del Monte”, “we”, “our” and “us” and the “Company” refer to Fresh Del Monte Produce Inc. and its subsidiaries, unless the context indicates otherwise.

Nature of Business
 
We were incorporated under the laws of the Cayman Islands in 1996. We are one of the world’s leading vertically integrated producers, marketers and distributors of high-quality fresh and fresh-cut fruit and vegetables, as well as a leading producer and marketer of prepared fruit and vegetables, juices, beverages and snacks in Europe, Africa and the Middle East. We market our products worldwide under the Del Monte® brand, a symbol of product innovation, quality, freshness and reliability since 1892. Our major sales markets are organized as follows: North America, Europe (which includes Kenya), the Middle East (which includes North Africa) and Asia. Our global sourcing and logistics system allows us to provide regular delivery of consistently high-quality produce and value-added services to our customers. Our major producing operations are located in North, Central and South America, Asia and Africa. Our products are sourced from company-owned operations, through supply contracts with independent growers, and through joint venture arrangements.

Our business is comprised of three reportable segments, two of which represent our primary businesses of fresh and value-added products and banana, and one that represents our other ancillary businesses.

Fresh and value-added products - includes pineapples, fresh-cut fruit, fresh-cut vegetables (which includes fresh-cut salads), melons, vegetables, non-tropical fruit (including grapes, apples, citrus, blueberries, strawberries, pears, peaches, plums, nectarines, cherries and kiwis), other fruit and vegetables, avocados, and prepared foods (including prepared fruit and vegetables, juices, other beverages, and meals and snacks).

Banana

Other products and services - includes our ancillary businesses consisting of sales of poultry and meat products, a plastic product business, and third-party freight services.

Basis of Presentation

The accompanying unaudited Consolidated Financial Statements for the quarter ended April 1, 2022 have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. They do not include all information and notes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments of a normal recurring nature considered necessary for fair presentation have been included. Operating results for the quarter ended April 1, 2022 are subject to significant seasonal variations and are not necessarily indicative of the results that may be expected for the year ending December 30, 2022. For further information, refer to the Consolidated Financial Statements and notes thereto included in our annual report on Form 10-K for the fiscal year ended December 31, 2021.

We are required to evaluate events occurring after April 1, 2022 for recognition and disclosure in the unaudited Consolidated Financial Statements for the quarter ended April 1, 2022. Events are evaluated based on whether they represent information existing as of April 1, 2022, which require recognition in the unaudited Consolidated Financial Statements, or new events occurring after April 1, 2022 which do not require recognition but require disclosure if the event is significant to the unaudited Consolidated Financial Statements. We evaluated events occurring subsequent to April 1, 2022 through the date of issuance of these unaudited Consolidated Financial Statements.

Certain reclassification of prior period balances have been made to conform to current presentation. Refer to Note 12.  Business Segment Data for further information.





6

FRESH DEL MONTE PRODUCE INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Unaudited)
2. Recently Issued Accounting Pronouncements

New Accounting Pronouncements - Not Yet Adopted

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, and a subsequent amendment to the guidance, ASU 2021-01 in January 2021. The ASU provides optional guidance to companies to ease the potential burden associated with transitioning away from reference rates that are expected to be discontinued. The new guidance provides optional expedients and exceptions to apply generally accepted accounting principles to contract modifications and hedging relationships, subject to certain criteria, that reference LIBOR or another reference rate expected to be discontinued. Companies can adopt the ASU immediately, however the guidance will only be available through December 31, 2022. While we are continuing to evaluate the impact of this ASU on our financial condition, results of operations and cash flows, we do not expect its impact will be material at this time.

3.  Asset Impairment and Other Charges (Credits), Net

The following represents a summary of asset impairment and other charges (credits), net recorded during the quarters ended April 1, 2022 and April 2, 2021 (U.S. dollars in millions):
Quarter endedQuarter ended
April 1, 2022April 2, 2021
 Long-lived
and other
asset
impairment
 Exit activity and other
 (credits) charges
TotalLong-lived
and other
asset
impairment
Exit activity and other
 (credits) charges
Total
Banana segment:      
Insurance recovery related to hurricanes(1)
$ $ $ $ $(0.8)$(0.8)
Fresh and value-added products segment:   
Other fresh and value-added products segment charges (credits)    (0.1)(0.1)
Other:
Former President/COO severance expense 1.0 1.0    
Total asset impairment and
other charges (credits), net
$ $1.0 $1.0 $ $(0.9)$(0.9)
(1) $(0.8) million insurance recovery for the quarter ended April 2, 2021 associated with damages to certain of our banana fixed assets in Guatemala caused by hurricanes Eta and Iota in the fourth quarter of 2020.


4. Income Taxes

In connection with the examination of the tax returns in two foreign jurisdictions, the taxing authorities have issued income tax deficiencies related to transfer pricing aggregating approximately $156.5 million (including interest and penalties) for tax years 2012 through 2016. We strongly disagree with the proposed adjustments and have filed a protest with each of the taxing authorities as we believe that the proposed adjustments are without technical merit.

In one of the foreign jurisdictions, we are currently contesting tax assessments related to the 2012-2015 audit years and the 2016 audit year in both the administrative court and the judicial court. During 2019 and 2020, we filed actions contesting the tax assessment in the administrative office. Our initial challenge to each of these tax assessments was rejected and we subsequently lost our appeals at the administrative court. We have subsequently filed actions to contest each of these tax assessments in the country’s judicial courts. In addition, we have filed a request for injunction to the judicial court to stay the tax authorities collection efforts for these two tax assessments, pending final judicial decisions. The court has granted our injunction with respect to the 2016 audit year and has not yet ruled with respect to the 2012-2015 audit years. Pursuant to local law, we registered real estate collateral with an approximate fair market value of $5.7 million in connection with the grant of the 2016 audit year injunction. This real estate collateral has a net book value of $4.1 million as of the quarter ended April 1, 2022. To the extent that we are granted the injunction for the 2012-2015 audit years, we currently anticipate that additional collateral

7

FRESH DEL MONTE PRODUCE INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Unaudited)

4. Income Taxes (continued)

of approximately $25.0 million would be required to be posted. The registration of this real estate collateral does not affect our operations in the country.

In the other foreign jurisdiction, the administrative court denied our appeal, and on March 4, 2020 we filed an action in the judicial court to contest the administrative court's decision. The case is still pending.

We will continue to vigorously contest the adjustments and to exhaust all administrative and judicial remedies necessary in both jurisdictions to resolve the matters, which could be a lengthy process.

Income tax provision was $5.8 million for the first quarter of 2022 compared to $11.0 million for the first quarter of 2021. The decrease in the income tax provision was primarily due to decreased earnings in certain higher tax jurisdictions.


5.  Allowance for Credit Losses
 
We estimate expected credit losses on our trade receivables and financing receivables in accordance with Accounting Standards Codification (“ASC”) 326 - Financial Instruments - Credit Losses.

Trade Receivables

Trade receivables as of April 1, 2022 were $415.8 million, net of an allowance of $24.3 million. Our allowance for trade receivables consists of two components: a $9.6 million allowance for credit losses and a $14.7 million allowance for customer claims accounted for under the scope of ASC 606 - Revenue Recognition.

As a result of our robust credit monitoring practices, the industry in which we operate, and the nature of our customer base, the credit losses associated with our trade receivables have historically been insignificant in comparison to our annual net sales. We measure the allowance for credit losses on trade receivables on a collective (pool) basis when similar risk characteristics exist. We generally pool our trade receivables based on the geographic region or country to which the receivables relate. Receivables that do not share similar risk characteristics are evaluated for collectability on an individual basis.

Our historical credit loss experience provides the basis for our estimation of expected credit losses. We generally use a three-year average annual loss rate as a starting point for our estimation, and make adjustments to the historical loss rate to account for differences in current conditions impacting the collectability of our receivable pools. We generally monitor macroeconomic indicators to assess whether adjustments are necessary to reflect current conditions.

The table below presents a rollforward of our trade receivable allowance for credit losses for the quarters ended April 1, 2022 and April 2, 2021 (U.S. dollars in millions):
Quarter ended
Trade receivablesApril 1,
2022
April 2,
2021
Allowance for credit losses:
Balance, beginning of period$10.2 $15.1 
Provision for uncollectible amounts(0.3)0.1 
Deductions to allowance related to write-offs(0.3) 
Balance, end of period
$9.6 $15.2 







8

FRESH DEL MONTE PRODUCE INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Unaudited)
5.  Allowance for Credit Losses (continued)

Financing Receivables

Financing receivables are included in other accounts receivable, net on our Consolidated Balance Sheets and are recognized at amortized cost less an allowance for estimated credit losses. Financing receivables include seasonal advances to growers and suppliers, which are usually short-term in nature, and other financing receivables.

A significant portion of the fresh produce we sell is acquired through supply contracts with independent growers. In order to ensure the consistent high quality of our products and packaging, we make advances to independent growers and suppliers. These growers and suppliers typically sell all of their production to us and make payments on their advances as a deduction to the agreed upon selling price of the fruit or packaging material. The majority of the advances to growers and suppliers are for terms less than one year and typically span a growing season. In certain cases, there may be longer term advances with terms of up to five years.

We measure the allowance for credit losses on advances to suppliers and growers on a collective (pool) basis when similar risk characteristics exist. We generally pool our advances based on the country to which they relate, and further disaggregate them based on their current or past-due status. We generally consider an advance to a grower to be past due when the advance is not fully paid within the respective growing season. The allowance for advances to growers and suppliers that do not share similar risk characteristics are determined on a case-by-case basis, depending on the expected production for the season and other contributing factors. The advances are typically collateralized by property liens and pledges of the respective season’s produce. Occasionally, we agree to a payment plan with these growers or take steps to recover the advance via established collateral. We may write-off uncollectible financing receivables after our collection efforts are exhausted. Historically, our credit losses associated with our advances to suppliers and growers have not been significant. 

Our historical credit loss experience provides the basis for our estimation of expected credit losses. We generally use a three-year average annual loss rate as a starting point for our estimation, and make adjustments to the historical loss rate to account for differences in current or expected future conditions. We generally monitor macroeconomic indicators as well as other factors, including unfavorable weather conditions and crop diseases, which may impact the collectability of the advances when assessing whether adjustments to the historical loss rate are necessary.

The following table details the advances to growers and suppliers based on their credit risk profile (U.S. dollars in millions):
April 1, 2022December 31, 2021
 CurrentPast-DueCurrentPast-Due
Gross advances to growers and suppliers$47.9 $2.8 $40.6 $5.5 
 
The allowance for advances to growers and suppliers for the quarters ended April 1, 2022 and April 2, 2021 were as follows (U.S. dollars in millions):
Quarter ended
April 1,
2022
April 2,
2021
Allowance for advances to growers and suppliers:
Balance, beginning of period$1.8 $2.1 
Provision for uncollectible amounts  
Balance, end of period$1.8 $2.1 









9

FRESH DEL MONTE PRODUCE INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Unaudited)
6.  Share-Based Compensation

Our shareholders approved and ratified the 2014 Omnibus Share Incentive Plan (the “2014 Plan”), which allows us to grant equity-based compensation awards, including stock options, restricted stock awards and restricted stock units including performance stock units. We disclosed the significant terms of the 2014 Plan in the notes to our consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021.

Stock-based compensation expense related to restricted stock units (“RSUs”) and performance stock units (“PSUs”) is included in selling, general and administrative expenses in the accompanying Consolidated Statements of Operations and is comprised as follows (U.S. dollars in millions): 
 Quarter ended
April 1,
2022
April 2,
2021
RSUs/PSUs$1.7 $1.6 
Total$1.7 $1.6 

Restricted Stock Units and Performance Stock Units

There were no RSUs or PSUs awarded under the 2014 Plan for the quarter ended April 1, 2022.

The following table lists the various RSUs and PSUs awarded under the 2014 Plan for the quarter ended April 2, 2021:

Date of AwardType of awardUnits awardedPrice per share
March 30, 2021RSU2,500$28.67 
March 1, 2021RSU290,02125.85 
March 1, 2021PSU118,19225.85 

Under the 2014 Plan, each RSU/PSU represents a contingent right to receive one of our ordinary shares. The PSUs are subject to meeting minimum performance criteria set by the Compensation Committee of our Board of Directors. The actual number of shares the recipient receives is determined based on the results achieved versus performance goals. Those performance goals are based on exceeding a measure of our earnings. Depending on the results achieved, the actual number of shares that an award recipient receives at the end of the period may range from 0% to 100% of the award units granted. Provided such criteria are met, the PSUs will vest in three equal annual installments on each of the next three anniversary dates provided that the recipient remains employed with us.

RSUs granted subsequent to January 1, 2021 will vest annually in three equal installments over a three-year service period. RSUs granted prior to January 1, 2021 vest as follows: 20% on the grant date and 20% on each of the next four anniversaries.

The fair market value for RSUs and PSUs is based on the closing price of our stock on the grant date. We recognize expense related to RSUs and PSUs based on the fair market value, as determined on the grant date, ratably over the vesting period, provided the performance condition, if any, is probable. Forfeitures are recognized as they occur.

RSUs and PSUs do not have the voting rights of ordinary shares and the shares underlying the RSUs and PSUs are not considered issued and outstanding. However, shares underlying RSUs/PSUs are included in the calculation of diluted earnings per share to the extent the performance criteria are met, if any.

RSUs and PSUs are eligible to earn Dividend Equivalent Units (“DEUs”) equal to the cash dividend paid to ordinary shareholders. DEUs are subject to the same performance and/or service conditions as the underlying RSUs and PSUs and are forfeitable.

10

FRESH DEL MONTE PRODUCE INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Unaudited)

7.  Inventories, net
 
Inventories consisted of the following (U.S. dollars in millions):
 
April 1,
2022
December 31,
2021
Finished goods$246.2 $197.9 
Raw materials and packaging supplies189.2 203.2 
Growing crops185.1 201.7 
Total inventories, net$620.5 $602.8 


8.  Debt and Finance Lease Obligations
 
The following is a summary of long-term debt and finance lease obligations (U.S. dollars in millions):
 
April 1,
2022
December 31,
2021
Senior unsecured revolving credit facility (see Credit Facility below)$554.1 $519.1 
Finance lease obligations9.5 9.9 
Total debt and finance lease obligations563.6 529.0 
Less:  Current maturities(1.3)(1.3)
Long-term debt and finance lease obligations$562.3 $527.7 

Credit Facility

On October 1, 2019, we entered into a Second Amended and Restated Credit Agreement (as amended, the “Second A&R Credit Agreement”) with Bank of America, N.A. as administrative agent and BofA Securities, Inc. as sole lead arranger and sole bookrunner and certain other lenders. The Second A&R Credit Agreement provides for a five-year, $1.1 billion syndicated senior unsecured revolving credit facility maturing on October 1, 2024 (the “Revolving Credit Facility”). Certain of our direct and indirect subsidiaries have guaranteed the obligations under the Second A&R Credit Agreement.

Amounts borrowed under the Revolving Credit Facility accrue interest, at our election, at either (i) the Eurocurrency Rate (as defined in the Second A&R Credit Agreement) plus a margin that ranges from 1.0% to 1.5% or (ii) the Base Rate (as defined in the Second A&R Credit Agreement) plus a margin that ranges from 0% to 0.5%, in each case based on our Consolidated Leverage Ratio (as defined in the Second A&R Credit Agreement). The Second A&R Credit Agreement interest rate grid provides for five pricing levels for interest rate margins.

The Second A&R Credit Agreement provides for an accordion feature that permits us, without the consent of the other lenders, to request that one or more lenders provide us with increases in revolving credit facility or term loans up to an aggregate of $300 million (“Incremental Increases”). The aggregate amount of Incremental Increases can be further increased to the extent that after giving effect to the proposed increase in revolving credit facility commitments or term loans our Consolidated Leverage Ratio, on a pro forma basis, would not exceed 2.50 to 1.00. Our ability to request such increases in the revolving credit facility or term loans is subject to our compliance with customary conditions set forth in the Second A&R Credit Agreement including compliance, on a pro forma basis, with the financial covenants and ratios set forth therein. Upon our request, each lender may decide, in its sole discretion, whether to increase all or a portion of its revolving credit facility commitment or provide term loans.






11

FRESH DEL MONTE PRODUCE INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Unaudited)

8.  Debt and Finance Lease Obligations (continued)

The Second A&R Credit Agreement requires us to comply with certain financial and other covenants. Specifically, it requires us to maintain a 1) Consolidated Leverage Ratio of not more than 3.50 to 1.00 at any time during any period of four consecutive fiscal quarters, subject to certain exceptions and 2) a minimum Consolidated Interest Coverage Ratio of not less than 2.25 to 1.00 as of the end of any fiscal quarter. Additionally, it requires us to comply with certain other covenants, including limitations on capital expenditures, stock repurchases, the amount of dividends that can be paid in the future, the amount and types of liens and indebtedness, material asset sales, and mergers. Under the Second A&R Credit Agreement, we are permitted to declare or pay cash dividends in any fiscal year up to an amount that does not exceed the greater of (i) an amount equal to the greater of (A) 50% of the Consolidated Net Income (as defined in the Second A&R Credit Agreement) for the immediately preceding fiscal year or (B) $25 million or (ii) the greatest amount which would not cause the Consolidated Leverage Ratio (determined on a pro forma basis) to exceed 3.25 to 1.00. It also provides an allowance for stock repurchases to be an amount not exceeding the greater of (i) $150 million in the aggregate or (ii) the amount that, after giving pro forma effect thereto and any related borrowings, will not cause the Consolidated Leverage Ratio to exceed 3.25 to 1.00. As of April 1, 2022, we were in compliance with all of the covenants contained in the Second A&R Credit Agreement.

Debt issuance costs of $1.1 million and $1.3 million are included in other noncurrent assets on our Consolidated Balance Sheets as of April 1, 2022 and December 31, 2021, respectively.

We have a renewable 364-day, $25.0 million letter of credit facility with Rabobank Nederland.

The following is a summary of the material terms of the Revolving Credit Facility and other working capital facilities at April 1, 2022 (U.S. dollars in millions):
 TermMaturity
date
Interest rateBorrowing
limit
Available
borrowings
Bank of America credit facility5 yearsOctober 1, 20241.83%$1,100.0 $545.9 
Rabobank letter of credit facility364 daysJune 15, 2022Varies25.0 16.0 
Other working capital facilitiesVariesVariesVaries19.8 10.0 
$1,144.8 $571.9 

The current margin for LIBOR advances is 1.375%. We intend to use funds borrowed under the Revolving Credit Facility from time to time for general corporate purposes, working capital, capital expenditures and other permitted investment opportunities.

The Revolving Credit Facility permits borrowings under the revolving commitment with an interest rate determined based on our leverage ratio and spread over LIBOR. In addition, we pay a fee on unused commitments.

As of April 1, 2022, we applied $28.2 million to letters of credit and bank guarantees issued from Rabobank Nederland, Bank of America, and other banks.

During 2018, we entered into interest rate swaps in order to hedge the risk of the fluctuation on future interest payments related to our variable rate LIBOR-based borrowings from our Revolving Credit Facility. Refer to Note 13, “Derivative Financial Instruments”.

12

FRESH DEL MONTE PRODUCE INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Unaudited)

9.  Commitments and Contingencies

Kunia Well Site
 
In 1980, elevated levels of certain chemicals were detected in the soil and ground-water at a plantation leased by one of our U.S. subsidiaries in Honolulu, Hawaii (the “Kunia Well Site”). In 2005, our subsidiary signed a Consent Decree (“Consent Decree”) with the Environmental Protection Agency (“EPA”) for the performance of the clean-up work for the Kunia Well Site.

Based on findings from remedial investigations, our subsidiary continues to evaluate with the EPA the clean-up work currently in progress in accordance with the Consent Decree.

The estimate associated with the clean-up costs, and on which our accrual is based, is $12.9 million. As of April 1, 2022, $12.5 million was included in other noncurrent liabilities and $0.4 million was included in accounts payable and accrued expenses in the Consolidated Balance Sheets for the Kunia Well Site clean-up. We expect to expend approximately $0.4 million in 2022, $1.1 million in 2023 and $0.9 million in each of the years 2024, 2025 and 2026.

Additional Information
 
In addition to the foregoing, we are involved from time to time in various claims and legal actions incident to our operations, both as plaintiff and defendant. In the opinion of management, after consulting with legal counsel, none of these other claims are currently expected to have a material adverse effect on the results of operations, financial position or our cash flows.

We intend to vigorously defend ourselves in all of the above matters.


10.  Earnings Per Share
 
Basic and diluted net income per ordinary share is calculated as follows (U.S. dollars in millions, except share and per share data):
 Quarter ended
April 1,
2022
April 2,
2021
Numerator:  
Net income attributable to Fresh Del Monte
Produce Inc.
$25.8 $42.7 
Denominator:  
Weighted average number of ordinary shares -
Basic
47,665,122 47,427,962 
Effect of dilutive securities - share-based
awards
191,164 111,909 
Weighted average number of ordinary shares -
Diluted
47,856,286 47,539,871 
Antidilutive awards (1)
69,900 105,485 
Net income per ordinary share attributable to Fresh Del Monte Produce Inc.:
  
Basic$0.54 $0.90 
Diluted$0.54 $0.90 

(1)Certain unvested RSUs and PSUs are not included in the calculation of net income per ordinary share because the effect would have been antidilutive.

13

FRESH DEL MONTE PRODUCE INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Unaudited)

11.  Retirement and Other Employee Benefits
 
The following table sets forth the net periodic benefit costs of our defined benefit pension plans and post-retirement benefit plans (U.S. dollars in millions):
 Quarter ended
April 1,
2022
April 2,
2021
Service cost$1.5 $1.6 
Interest cost1.3 1.3 
Expected return on assets(0.7)(0.5)
Amortization of net actuarial loss0.2 0.1 
Net periodic benefit costs$2.3 $2.5 
 
We provide certain other retirement benefits to certain employees who are not U.S.-based and are not included above. Generally, benefits under these programs are based on an employee’s length of service and level of compensation. These programs are immaterial to our consolidated financial statements. The net periodic benefit costs related to other non-U.S. based plans is $0.8 million for the quarter ended April 1, 2022 and $0.9 million for the quarter ended April 2, 2021.

Service costs are presented in the same line item in the Consolidated Statements of Operations as other compensation costs arising from services rendered by the employees during the period. With the exception of service cost, the other components of net periodic benefit costs (which include interest costs, expected return on assets, and amortization of net actuarial losses) are recorded in the Consolidated Statements of Operations in other expense, net.

12.  Business Segment Data
 
Our business is comprised of three reportable segments, two of which represent our primary businesses of fresh and value-added products and banana, and one that represents our other ancillary businesses.

Fresh and value-added products - includes pineapples, fresh-cut fruit, fresh-cut vegetables (which includes fresh-cut salads), melons, vegetables, non-tropical fruit (including grapes, apples, citrus, blueberries, strawberries, pears, peaches, plums, nectarines, cherries and kiwis), other fruit and vegetables, avocados, and prepared foods (including prepared fruit and vegetables, juices, other beverages, and meals and snacks).

Banana

Other products and services - includes our ancillary businesses consisting of sales of poultry and meat products, a plastic product business, and third-party freight services.

We evaluate performance based on several factors, of which net sales and gross profit by product are the primary financial measures (U.S. dollars in millions): 

 Quarter ended
 April 1, 2022April 2, 2021
Segments:Net SalesGross ProfitNet SalesGross Profit
Fresh and value-added products$672.7 $44.4 $631.0 $52.2 
Banana406.0 37.7 418.2 50.0 
Other products and services58.2 7.7 39.1 2.8 
Totals$1,136.9 $89.8 $1,088.3 $105.0 


14

FRESH DEL MONTE PRODUCE INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Unaudited)

12.  Business Segment Data (continued)
Our segment data disclosures for the quarter ended April 2, 2021 have been adjusted to reflect a reclassification of cost of products sold between our three segments as a result of a refinement in our cost allocation methodology. The reclassification results in an increase to our fresh and value-added products segment gross profit of $0.6 million, an increase to our banana segment gross profit of $0.8 million and a decrease to our other products and services segment gross profit of $1.4 million.

Quarter ended
Net sales by geographic region:April 1,
2022
April 2,
2021
North America$690.0 $648.4 
Europe199.4 190.0 
Asia114.3 122.9 
Middle East103.1 104.8 
Other30.1 22.2 
Totals$1,136.9 $1,088.3 


The following table indicates our net sales by product and the percentage of the total (U.S. dollars in millions):
 Quarter ended
April 1,
2022
April 2,
2021
Fresh and value-added products:
Fresh-cut fruit$122.0 11 %$113.1 10 %
Fresh-cut vegetables83.7 7 %88.9 8 %
Pineapples131.5 11 %124.0 11 %
Avocados89.8 8 %83.6