UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

———————————

FORM 10-Q

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(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March ~~31, 2023~~29, 2024

☐ 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 Islands			N/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 Islands			N/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 class	Trading Symbol	Name of each exchange on which registered
Ordinary Shares, $0.01 Par Value Per Share	FDP	New 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 filer	☒	Accelerated 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 ~~21, 2023,~~26, 2024, there were ~~47,999,922~~47,898,240 ordinary shares of Fresh Del Monte Produce Inc. issued and outstanding.

TABLE OF CONTENTS


		Page
PART I: FINANCIAL INFORMATION

Item 1. Financial Statements

	Consolidated Balance Sheets (unaudited) as of March 3 1 ,29, 202 34 and December 3 029 , 202 23 .	1

	Consolidated Statements of Operations (unaudited) for the quarters ended March 29 , 202 4 and March 3 1 , 202 3 ~~and~~ ~~April~~ ~~1, 202~~2 .	2

	Consolidated Statements of Comprehensive Income (unaudited) for the quarters ended March ~~31, 2023~~ 29 , 202 4 and ~~April~~ March 3 1 ~~2022.~~, 202 3 .	3

	Consolidated Statements of Cash Flows (unaudited) for the quarters ended March 29 , 202 4 and March 3 1 , 202 3 ~~and~~ ~~April~~ ~~1, 202~~2 .	4

	Consolidated Statements of Shareholders’ Equity and Redeemable Noncontrolling Interest (unaudited) for the quarters ended March 29 , 202 4 and March 3 1 , 202 3 ~~and~~ ~~April~~ ~~1, 202~~2 .	5

	Notes to Consolidated Financial Statements (unaudited)	6

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		23

Item 3. Quantitative and Qualitative Disclosures About Market Risk		3233

Item 4. Controls and Procedures		3233

PART II. OTHER INFORMATION

Item 1. Legal Proceedings		3334

Item 1 A . Risk Factors			34

Item 5. Other Information		35

Item 6. Exhibits		3436

Signatures		3537

Table of Contents

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)


		March 31, 2023		December 30, 2022
	March 29, 2024						March 29, 2024	December 29, 2023
Assets	Assets					Assets
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	35.7	$	17.2
Trade accounts receivable, net of allowance of $24.4 and $21.6, respectively		420.9		373.5
Other accounts receivable, net of allowance of $6.4 and $5.7, respectively		94.3		91.0
Trade accounts receivable, net of allowance of $23.2 and $20.8, respectively
Other accounts receivable, net of allowance of $5.8 and $5.6, respectively
Inventories, net	Inventories, net	646.9		669.0
Assets held for sale	Assets held for sale	21.9		67.3
Prepaid expenses and other current assets	Prepaid expenses and other current assets	26.2		23.4
Total current assets	Total current assets	1,245.9		1,241.4
Investments in and advances to unconsolidated companies	Investments in and advances to unconsolidated companies	18.9		18.0
Property, plant and equipment, net	Property, plant and equipment, net	1,295.0		1,309.5
Operating lease right-of-use assets	Operating lease right-of-use assets	221.3		213.8
Goodwill	Goodwill	423.1		422.9
Intangible assets, net	Intangible assets, net	133.4		135.0
Deferred income taxes	Deferred income taxes	49.1		47.4
Other noncurrent assets	Other noncurrent assets	56.4		70.9
Total assets	Total assets	$	3,443.1	$	3,458.9
Liabilities and shareholders' equity	Liabilities and shareholders' equity					Liabilities and shareholders' equity
Current liabilities:	Current liabilities:					Current liabilities:
Accounts payable and accrued expenses	Accounts payable and accrued expenses	$	537.7	$	549.9
Current maturities of debt and finance leases	Current maturities of debt and finance leases	1.4		1.3
Current maturities of operating leases	Current maturities of operating leases	43.9		41.6
Income taxes and other taxes payable	Income taxes and other taxes payable	17.9		14.2
Current liabilities held for sale		2.1		—

Total current liabilities
Total current liabilities
Total current liabilities	Total current liabilities	603.0		607.0
Long-term debt and finance leases	Long-term debt and finance leases	479.6		547.1
Retirement benefits	Retirement benefits	85.5		82.4
Deferred income taxes	Deferred income taxes	74.0		71.6
Operating leases, less current maturities	Operating leases, less current maturities	153.9		147.3
Other noncurrent liabilities	Other noncurrent liabilities	27.9		28.5
Total liabilities	Total liabilities	1,423.9		1,483.9
Commitments and contingencies (See note 9)	Commitments and contingencies (See note 9)					Commitments and contingencies (See note 9)
Redeemable noncontrolling interest	Redeemable noncontrolling interest	49.4		49.4
Shareholders' equity:	Shareholders' equity:					Shareholders' equity:
Preferred shares, $0.01 par value; 50,000,000 shares authorized; none issued or outstanding	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; 47,998,746 and 47,838,680 issued and outstanding, respectively		0.5		0.5
Ordinary shares, $0.01 par value; 200,000,000 shares authorized; 47,896,132 and 47,629,018 issued and outstanding, respectively
Paid-in capital	Paid-in capital	550.7		548.1
Retained earnings	Retained earnings	1,429.1		1,397.6
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(39.9)		(41.5)
Total Fresh Del Monte Produce Inc. shareholders' equity	Total Fresh Del Monte Produce Inc. shareholders' equity	1,940.4		1,904.7
Noncontrolling interests	Noncontrolling interests	29.4		20.9
Total shareholders' equity	Total shareholders' equity	1,969.8		1,925.6
Total liabilities, redeemable noncontrolling interest and shareholders' equity	Total liabilities, redeemable noncontrolling interest and shareholders' equity	$	3,443.1	$	3,458.9

See accompanying notes.

Table of Contents

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
		March 31, 2023		April 1, 2022
							Quarter ended
						March 29, 2024		March 29, 2024	March 31, 2023
Net sales	Net sales	$	1,128.5	$	1,136.9
Cost of products sold	Cost of products sold	1,031.5		1,047.1
Gross profit	Gross profit	97.0		89.8
Selling, general and administrative expenses	Selling, general and administrative expenses	47.6		45.2
Gain (loss) on disposal of property, plant and equipment, net		27.5		(3.8)
Gain on disposal of property, plant and equipment, net
Asset impairment and other charges, net	Asset impairment and other charges, net	2.4		1.0
Operating income	Operating income	74.5		39.8
Interest expense	Interest expense	8.0		5.3
Interest income	Interest income	0.1		—
Other expense, net	Other expense, net	9.3		4.0
Income before income taxes	Income before income taxes	57.3		30.5
Income tax provision	Income tax provision	9.5		5.8
Net income	Net income	$	47.8	$	24.7
Less: Net income (loss) attributable to redeemable and noncontrolling interests		8.8		(1.1)
Less: Net income attributable to redeemable and noncontrolling interests
Net income attributable to Fresh Del Monte Produce Inc.	Net income attributable to Fresh Del Monte Produce Inc.	$	39.0	$	25.8
Net income per ordinary share attributable to Fresh Del Monte Produce Inc. - Basic	Net income per ordinary share attributable to Fresh Del Monte Produce Inc. - Basic	$	0.81	$	0.54
Net income per ordinary share attributable to Fresh Del Monte Produce Inc. - Diluted	Net income per ordinary share attributable to Fresh Del Monte Produce Inc. - Diluted	$	0.81	$	0.54
Dividends declared per ordinary share	Dividends declared per ordinary share	$	0.15	$	0.15
Weighted average number of ordinary shares:	Weighted average number of ordinary shares:
Basic	Basic	47,892,934		47,665,122
Basic
Basic
Diluted	Diluted	48,153,540		47,856,286

See accompanying notes.

Table of Contents

FRESH DEL MONTE PRODUCE INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)

(U.S. dollars in millions)


		Quarter ended
		March 31, 2023		April 1, 2022
				Quarter ended
				Quarter ended
				Quarter ended
						March 29, 2024	March 29, 2024	March 31, 2023
Net income	Net income	$	47.8	$	24.7
Other comprehensive income:	Other comprehensive income:
Net unrealized gain on derivatives, net of tax	Net unrealized gain on derivatives, net of tax	—		37.8
Net unrealized foreign currency translation gain (loss)		2.0		(7.4)
Net unrealized gain on derivatives, net of tax
Net unrealized gain on derivatives, net of tax
Net unrealized foreign currency translation (loss) gain
Net change in retirement benefit adjustment, net of tax	Net change in retirement benefit adjustment, net of tax	(0.4)		(0.1)
Comprehensive income	Comprehensive income	$	49.4	$	55.0
Less: Comprehensive income (loss) attributable to redeemable and noncontrolling interests		8.8		(1.1)
Less: Comprehensive income attributable to redeemable and noncontrolling interests
Comprehensive income attributable to Fresh Del Monte Produce Inc.	Comprehensive income attributable to Fresh Del Monte Produce Inc.	$	40.6	$	56.1

See accompanying notes.

Table of Contents

FRESH DEL MONTE PRODUCE INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(U.S. dollars in millions)


	Quarter ended
	March 29, 2024		March 31, 2023
Operating activities:
Net income	$	26.1	$	47.8
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	20.0		22.1
Amortization of debt issuance costs	0.2		0.1
Share-based compensation expense	0.6		2.3

Change in uncertain tax positions	(0.2)		0.3

Gain on disposal of property, plant and equipment	(14.8)		(27.5)

Deferred income taxes	1.5		(3.9)



Other, net	2.3		1.6
Changes in operating assets and liabilities
Receivables	(52.9)		(50.6)
Inventories	23.3		17.4
Prepaid expenses and other current assets	1.7		(2.3)
Accounts payable and accrued expenses	13.9		1.0
Other assets and liabilities	(3.0)		7.2
Net cash provided by operating activities	18.7		15.5
Investing activities:
Capital expenditures	(12.7)		(10.0)
Proceeds from sales of property, plant and equipment	20.1		90.7




Investments in and advances to unconsolidated companies	(3.5)		(1.1)

Net cash provided by investing activities	3.9		79.6
Financing activities:
Proceeds from debt	79.3		143.4
Payments on debt	(79.3)		(210.5)

Distributions to noncontrolling interests	—		(0.3)

Share-based awards settled in cash for taxes	(0.8)		(0.5)

Dividends paid	(11.9)		(7.2)

Payment of deferred financing costs	(2.1)		—
Other financing activities	(1.2)		(0.8)
Net cash used in financing activities	(16.0)		(75.9)
Effect of exchange rate changes on cash	1.8		(0.7)
Net increase in cash and cash equivalents	8.4		18.5
Cash and cash equivalents, beginning	33.8		17.2
Cash and cash equivalents, ending	$	42.2	$	35.7
Supplemental cash flow information:
Cash paid for interest	$	5.4	$	7.3
Cash paid for income taxes	$	3.8	$	4.1
Non-cash financing and investing activities:

Right-of-use assets obtained in exchange for new operating lease obligations	$	1.9	$	19.3

Dividends on restricted stock units	$	0.4	$	0.3

Non-cash conversion of note receivable in exchange for investment in unconsolidated company	$	0.7	$	—

Quarter ended
March 31,
2023 April 1,
2022
Operating activities:
Net income $ 47.8 $ 24.7
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 22.1 23.6
Amortization of debt issuance costs 0.1 0.1
Share-based compensation expense 2.3 1.7
Change in uncertain tax positions 0.3 0.1
(Gain) loss on disposal of property, plant and equipment (27.5) 3.8
Deferred income taxes (3.9) (3.3)
Other, net 1.6 (3.0)
Changes in operating assets and liabilities
Receivables (50.6) (82.2)
Inventories 17.4 (19.2)
Prepaid expenses and other current assets (2.3) (0.5)
Accounts payable and accrued expenses 1.0 53.5
Other assets and liabilities 7.2 0.4
Net cash provided by (used in) operating activities 15.5 (0.3)
Investing activities:
Capital expenditures (10.0) (11.1)
Proceeds from sales of property, plant and equipment 90.7 1.6
Investments in unconsolidated companies (1.1) (7.1)
Net cash provided by (used in) investing activities 79.6 (16.6)
Financing activities:
Proceeds from debt 143.4 262.5
Payments on debt (210.5) (227.5)
Distributions to noncontrolling interests (0.3) —
Share-based awards settled in cash for taxes (0.5) (0.8)
Dividends paid (7.2) (7.2)
Other financing activities (0.8) (0.3)
Net cash (used in) provided by financing activities (75.9) 26.7
Effect of exchange rate changes on cash (0.7) (0.6)
Net increase in cash and cash equivalents 18.5 9.2
Cash and cash equivalents, beginning 17.2 16.1
Cash and cash equivalents, ending $ 35.7 $ 25.3
Supplemental cash flow information:
Cash paid for interest $ 7.3 $ 6.4
Cash paid for income taxes $ 4.1 $ 2.5
Non-cash financing and investing activities:
Right-of-use assets obtained in exchange for new operating lease obligations $ 19.3 $ 10.8
Dividends on restricted stock units $ 0.3 $ —

See accompanying notes.

Table of Contents

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 Outstanding	Ordinary Shares		Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Fresh Del Monte Produce Inc. Shareholders' Equity		Noncontrolling Interests		Total Shareholders' Equity		Redeemable Noncontrolling Interest		Ordinary Shares Outstanding	Ordinary Shares	Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Loss	Fresh Del Monte Produce Inc. Shareholders' Equity	Noncontrolling Interests	Total Shareholders' Equity	Redeemable Noncontrolling Interest
Balance as of December 30, 2022		47,838,680	$	0.5	$	548.1	$	1,397.6	$	(41.5)	$	1,904.7	$	20.9	$	1,925.6	$	49.4
Exercises of stock options		2,418	—		—		—		—		—		—		—		—
Balance as of December 29, 2023

Settlement of restricted stock units

Settlement of restricted stock units

Settlement of restricted stock units	Settlement of restricted stock units	157,648	—		—		—		—		—		—		—		—
Share-based payment expense	Share-based payment expense	—	—		2.3		—		—		2.3		—		2.3		—

Distribution to noncontrolling interests		—	—		—		—		—		—		—		—		(0.3)

Dividend declared

Dividend declared

Dividend declared	Dividend declared	—	—		0.3		(7.5)		—		(7.2)		—		(7.2)		—
Comprehensive income:	Comprehensive income:
Net income	Net income	—	—		—		39.0		—		39.0		8.5		47.5		0.3
Net income
Net income
Unrealized gain on derivatives, net of tax	Unrealized gain on derivatives, net of tax	—	—		—		—		—		—		—		—		—

Net unrealized foreign currency translation gain		—	—		—		—		2.0		2.0		—		2.0		—
Net unrealized foreign currency translation loss
Net unrealized foreign currency translation loss
Net unrealized foreign currency translation loss
Change in retirement benefit adjustment, net of tax	Change in retirement benefit adjustment, net of tax	—	—		—		—		(0.4)		(0.4)		—		(0.4)		—
Comprehensive income	Comprehensive income										40.6		8.5		49.1		0.3
Balance as of March 31, 2023		47,998,746	$	0.5	$	550.7	$	1,429.1	$	(39.9)	$	1,940.4	$	29.4	$	1,969.8	$	49.4
Balance as of March 29, 2024


		Ordinary Shares Outstanding	Ordinary Shares		Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Fresh Del Monte Produce Inc. Shareholders' Equity		Noncontrolling Interests		Total Shareholders' Equity		Redeemable Noncontrolling Interest		Ordinary Shares Outstanding	Ordinary Shares	Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Loss	Fresh Del Monte Produce Inc. Shareholders' Equity	Noncontrolling Interests	Total Shareholders' Equity	Redeemable Noncontrolling Interest
Balance as of December 31, 2021		47,554,695	$	0.5	$	541.0	$	1,327.7	$	(66.9)	$	1,802.3	$	21.7	$	1,824.0	$	49.5
Balance as of December 30, 2022
Exercises of stock options
Settlement of restricted stock units
Settlement of restricted stock units
Settlement of restricted stock units	Settlement of restricted stock units	263,148	—		—		—		—		—		—		—		—
Share-based payment expense	Share-based payment expense	—	—		1.7		—		—		1.7		—		1.7		—

Disposal of noncontrolling interest		—	—		—		—		—		—		0.3		0.3		—
Distribution to noncontrolling interests
Distribution to noncontrolling interests
Distribution to noncontrolling interests

Dividend declared	Dividend declared	—	—		—		(7.2)		—		(7.2)		—		(7.2)		—
Dividend declared
Dividend declared
Comprehensive income:	Comprehensive income:
Net income (loss)		—	—		—		25.8		—		25.8		(0.3)		25.5		(0.8)
Net income
Net income
Net income
Unrealized gain on derivatives, net of tax	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)		—

Net unrealized foreign currency translation gain
Net unrealized foreign currency translation gain
Net unrealized foreign currency translation gain
Change in retirement benefit adjustment, net of tax	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 at April 1, 2022		47,817,843	$	0.5	$	542.7	$	1,346.3	$	(36.6)	$	1,852.9	$	21.7	$	1,874.6	$	48.7
Comprehensive income
Balance as of March 31, 2023

See accompanying notes.

Table of Contents

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, 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~~production operations are located in North, Central and South America, Asia and Africa. Our products are sourced from company-owned operations and through supply contracts with independent growers.

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 third-party freight and logistic services business and our Jordanian poultry and meats business.

Basis of Presentation

The accompanying unaudited Consolidated Financial Statements for the quarter ended March ~~31, 2023~~29, 2024 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 March ~~31, 2023~~29, 2024 are subject to significant seasonal variations and are not necessarily indicative of the results that may be expected for the year ending December ~~29, 2023.~~27, 2024. 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 ~~30, 2022.~~29, 2023.

We are required to evaluate events occurring after March ~~31, 2023~~29, 2024 for recognition and disclosure in the unaudited Consolidated Financial Statements for the quarter ended March ~~31, 2023.~~29, 2024. Events are evaluated based on whether they represent information existing as of March ~~31, 2023,~~29, 2024, which require recognition in the unaudited Consolidated Financial Statements, or new events occurring after March ~~31, 2023~~29, 2024 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 March ~~31, 2023~~29, 2024 through the date of issuance of these unaudited Consolidated Financial Statements.

Table of Contents

FRESH DEL MONTE PRODUCE INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Unaudited)

Redeemable Noncontrolling Interest

As part of the Mann Packing acquisition in 2018, we acquired a put option exercisable by the 25% shareholder of one of the acquired subsidiaries. The put option allowed the noncontrolling shareholder to sell its 25% noncontrolling interest to us for a multiple of the subsidiary's adjusted earnings. As the put option was outside of our control, the carrying value of the 25% noncontrolling interest was presented as a redeemable noncontrolling interest outside of permanent equity on our Consolidated Balance Sheet. At each reporting period, the redeemable noncontrolling interest was recognized at the higher of (1) the initial carrying amount adjusted for accumulated earnings and distributions or (2) the contractually-defined redemption value as of the balance sheet date.

During the year ended December 29, 2023, the noncontrolling shareholder exercised its put option right and accordingly, we closed the purchase of the remaining 25% of this subsidiary for $5.2 million in cash consideration. The transaction was accounted for as an equity transaction, with the differential between the redeemable noncontrolling interest carrying amount at the time of closing and the cash purchase price being recognized as a $42.7 million increase in paid-in capital within shareholders' equity on our Consolidated Balance Sheet.

2. Recently Issued Accounting Pronouncements

New Accounting Pronouncements

In ~~March 2020,~~November 2023, the FASB issued ASU ~~2020-04,~~2023-07, ~~Reference Rate Reform~~Segment Reporting (Topic ~~848)~~280): ~~Facilitation~~Improvements to Reportable Segment Disclosures. This ASU amends Accounting Standards Codification (ASC) 280 to enhance the nature and frequency of segment disclosures. Specifically, the ~~Effects~~update requires disclosure of ~~Reference Rate Reform on Financial Reporting, and subsequent amendments~~significant segment expenses regularly provided to the ~~guidance, ASU 2021-01~~Chief Operating Decision Maker ("CODM") included within the reported measures of a segment's profit or loss, the amount and composition of other segment items in ~~January 2021 and ASU 2022-06 in December 2022. The amendments in these updates provide optional guidance~~order to companies to ease the potential burden associated with reference rate reform. Specifically, the 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. As of December 30, 2022, we had LIBOR-based borrowings and interest rate swaps that referenced LIBOR. Effective January 3, 2023, we amended our agreements and transitionedreconcile to the ~~Term Secured Overnight Financing Rate (Term SOFR)~~reported measures of a segment's profit or loss, the CODM's title and position, and how the CODM uses the reported measures of a segment's profit or loss in assessing segment performance and how to allocate resources. The ASU also makes requires that annual disclosures about a reportable segment's profit or loss and assets required by Topic 280 be made in interim periods. ASU 2023-07 is effective for ~~these instruments.~~years beginning after December 15, 2023 and interim periods beginning after December 15, 2024 with early adoption permitted. We ~~adopted~~have evaluated the ~~optional guidance in Topic 848 in conjunction with our contract amendments which allowed us to (i) account for the modification to our debt agreement as a continuation~~impact of the ~~existing contract and (ii) continue applying hedge accounting for our interest rate swaps. The~~ adoption of this ~~guidance did not have a material~~ASU and concluded it has no impact on our ~~consolidated~~ financial ~~statements.~~

~~3. Asset Impairment~~condition, results of operations and ~~Other Charges, Net~~

cash flows.

~~The following represents a summary of asset impairment and other charges, net recorded during the quarters ended March 31, 2023 and April 1, 2022 (U.S. dollars in millions):~~

Quarter ended Quarter ended
March 31, 2023 April 1, 2022
Long-lived and other
asset impairment Exit activity and other
charges Total Long-lived and other
asset impairment Exit activity and other
charges Total
Other (1):
2023 cybersecurity incident expenses (2)
— 2.4 2.4 — — —
Former President/COO severance expense — — — — 1.0 1.0
Total asset impairment and
other charges, net
$ — $ 2.4 $ 2.4 $ — $ 1.0 $ 1.0

~~(1)~~In December 2023, the FASB issued ASU 2023-09, ~~Asset impairment and other charges, net~~Income Taxes (Topic 740) - Improvements to Income Tax Disclosures. This ASU amends ASC 740 to enhance the nature of disclosures for income taxes. Specifically, the ~~quarters ended March 31, 2023 and April 1, 2022 were unrelated~~ASU requires public business entities to ~~any~~disclose additional information in categories defined within the ASU within the reconciliation of ~~our business segments. As such, they are classified as "other."~~

~~(2)~~ ~~$2.4 million charge for~~ the ~~quarter ended March 31, 2023 associated with a cybersecurity incident that resulted in costs primarily related~~effective tax rate to the ~~engagement~~statutory rate for federal, state and foreign income taxes. Additionally, the ASU requires disclosure of ~~specialized legal counsel~~taxes paid, net of refunds received, disaggregated by federal, state and ~~other incident response advisors. The Company~~foreign taxes. ASU 2023-09 is effective for years beginning after December 15, 2024 with early adoption permitted. We have evaluated the impact of the adoption of this ASU and concluded it has ~~cyber incident insurance, with a $1.0 million deductible,~~no impact on our financial condition, results of operations and ~~has submitted these charges to its insurer for reimbursement.~~cash flows.

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FRESH DEL MONTE PRODUCE INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Unaudited)

3. Asset Impairment and Other Charges, Net

The following represents a summary of asset impairment and other charges, net recorded during the quarters ended March 29, 2024 and March 31, 2023 (U.S. dollars in millions):


	Quarter ended						Quarter ended
	March 29, 2024						March 31, 2023
	Long-lived and other asset impairment		Exit activity and other charges		Total		Long-lived and other asset impairment		Exit activity and other charges		Total
Banana segment:
California Air Resource Board reserve (1)	$	—	$	0.5	$	0.5	$	—	$	—	$	—







Other:
Legal settlement (2)	—		1.8		1.8		—		—		—

2023 cybersecurity incident expenses (3)	—		—		—		—		2.4		2.4

Total asset impairment and other charges, net	$	—	$	2.3	$	2.3	$	—	$	2.4	$	2.4

(1) During the three months ended March 29, 2024, we recorded a $0.5 million reserve relating to a potential liability arising from our third-party logistics operation. Refer to Note 9, “Commitments and Contingencies.”

(2) Subsequent to March 29, 2024, we entered into a settlement agreement with respect to a litigation matter by a former employee. This matter was in the discovery phase until the first quarter of 2024, when the court set the expected trial date and the parties began to discuss settlement. Accordingly, we accrued $1.8 million, net of insurance reimbursements, associated with the settlement as of March 29, 2024.

(3) During the three months ended March 31, 2023, we incurred cybersecurity expenses of $2.4 million, primarily related to the engagement of specialized legal counsel and other incident response advisors.

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 ~~$152.1~~$174.1 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.~~authorities.

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 granted our injunction with respect to the 2016 audit year, however denied our injunction with respect to the 2012-2015 audit years. We timely appealed the denial of the injunction, and on August 10, 2022 the appellate court overturned the denial and granted our injunction for the 2012-2015 audit years. Pursuant to local law, we registered real estate collateral with an approximate fair market value of ~~$7.0~~$7.3 million in connection with the grant of the 2016 audit year injunction. This real estate collateral has a net book value of $3.8 million as of the quarter ended March ~~31, 2023.~~29, 2024. In addition, in connection with the grant of the 2012-2015 audit year injunction, we registered real estate collateral with an approximate fair market value of ~~$28.0~~$30.3 million, and a net book value of $4.6 million as of the quarter ended March ~~31, 2023.~~29, 2024. 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.

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FRESH DEL MONTE PRODUCE INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Unaudited)

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

Additionally, the European Union (EU) Member States formally adopted the EU’s Pillar Two Directive, which generally provides for a minimum effective tax rate of 15%, as established by the Organization for Economic Co-operation and Development (OECD) Pillar Two Framework. Pursuant to the implementation dates prescribed in the Directive, it is expected the rules will be effective for the Company for the 2025 fiscal year.A significant number of other countries are expected to also implement similar legislation with varying effective dates in the future. We are continuing to evaluate the potential impact on future periods of the Pillar Two Framework, pending legislative adoption by additional individual countries, however, we may not be able to completely mitigate the impact of the legislation which could have an adverse material effect on our financial condition, results of operations and cash flows.

Income tax provision was $5.3 million for the quarter ended March 29, 2024 compared with $9.5 million for the ~~first~~ quarter ~~of 2023 when compared with $5.8 million for the first quarter of 2022.~~ended March 31, 2023. The ~~increase~~decrease in the income tax provision was primarily due to ~~increased~~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 March ~~31, 2023~~29, 2024 were ~~$420.9~~$435.0 million, net of an allowance of ~~$24.4~~$23.2 million. Our allowance for trade receivables consists of two components: a ~~$9.6~~$8.0 million allowance for credit losses and a ~~$14.8~~$15.2 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 March 29, 2024 and March 31, 2023 (U.S. dollars in millions):


	Quarter ended
Trade receivables		March 29, 2024		March 31, 2023
Allowance for credit losses:
Balance, beginning of period		$	7.4	$	9.3
Provision for uncollectible amounts		0.7		0.5
Deductions to allowance related to write-offs		—		(0.2)

Foreign exchange effects		(0.1)		—

Balance, end of period		$	8.0	$	9.6

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FRESH DEL MONTE PRODUCE INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Unaudited)

~~5. Allowance for Credit Losses (continued)~~

~~The table below presents a rollforward of our trade receivable allowance for credit losses for the quarters ended March 31, 2023 and April 1, 2022 (U.S. dollars in millions):~~

Quarter ended
Trade receivables March 31,
2023 April 1,
2022
Allowance for credit losses:
Balance, beginning of period $ 9.3 $ 10.2
Provision for uncollectible amounts 0.5 (0.3)
Deductions to allowance related to write-offs (0.2) (0.3)
Balance, end of period $ 9.6 $ 9.6

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):


	March 29, 2024				December 29, 2023
	Current		Past-Due		Current		Past-Due
Gross advances to growers and suppliers	$	20.8	$	11.5	$	25.1	$	10.8

The allowance for advances to growers and suppliers for the quarters ended March 29, 2024 and March 31, 2023 were as follows (U.S. dollars in millions):


	Quarter ended
		March 29, 2024		March 31, 2023
Allowance for advances to growers and suppliers:
Balance, beginning of period		$	7.5	$	4.9
Provision for uncollectible amounts		1.1		2.8

Balance, end of period		$	8.6	$	7.7

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FRESH DEL MONTE PRODUCE INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Unaudited)

~~5. Allowance for Credit Losses (continued)~~

~~The following table details the advances to growers and suppliers based on their credit risk profile (U.S. dollars in millions):~~

March 31, 2023 December 30, 2022
Current Past-Due Current Past-Due
Gross advances to growers and suppliers $ 32.5 $ 9.6 $ 44.6 $ 5.6

~~The allowance for advances to growers and suppliers for the quarters ended March 31, 2023 and April 1, 2022 were as follows (U.S. dollars in millions):~~

Quarter ended
March 31,
2023 April 1,
2022
Allowance for advances to growers and suppliers:
Balance, beginning of period $ 4.9 $ 1.8
Provision for uncollectible amounts 2.8 —
Balance, end of period $ 7.7 $ 1.8

6. Share-Based Compensation

We maintain various compensation plans for officers, other employees, and non-employee members of our Board of Directors. On June 2, 2022, our shareholders approved and ratified the 2022 Omnibus Share Incentive Plan (the “2022 Plan”). The 2022 Plan allows us to grant equity-based compensation awards including restricted stock units (“RSUs”), performance stock units (“PSUs”), stock options, and restricted stock awards. The 2022 Plan replaces and supersedes the 2014 Omnibus Share Incentive Plan (the “Prior Plan”). No awards can be granted under the Prior Plan upon adoption of the 2022 Plan. Under the 2022 Plan, the Board of Directors is authorized to award up to (i) 2,800,000 ordinary shares plus (ii) any ordinary shares remaining available for future awards under the Prior Plan at the time of adoption (of which there were approximately ~~220,000)~~241,263) plus (iii) any ordinary shares with respect to awards and Prior Plan awards that are forfeited, canceled, expire unexercised, or are settled in cash following adoption of the 2022 Plan.

~~Stock-based~~Share-based compensation expense related to RSUs and PSUs is included in selling, general and administrative expenses in the accompanying Consolidated Statements of Operations and iswas comprised in the relevant period as follows (U.S. dollars in millions):

Quarter ended
March 31,
2023 April 1,
2022
RSUs/PSUs $ 2.3 $ 1.7


	Quarter ended
		March 29, 2024		March 31, 2023

RSUs/PSUs		$	0.6	$	2.3

Restricted Stock Units and Performance Stock Units

The following table lists the RSUs and PSUs awarded under the 2022 Plan during the ~~quarter~~quarters ended March 29, 2024 and March 31, ~~2023. There~~2023:



Date of Award	Type of award	Units awarded	Price per share
For the quarter ended March 29, 2024
March 1, 2024	PSU	285,460	$	24.37


For the quarter ended March 31, 2023
March 2, 2023 (1)	PSU	91,997	$	32.13
March 2, 2023	RSU	215,627	$	32.13

(1) The 2023 PSUs were ~~no RSUs or PSUs awarded~~forfeited during the quarter ended ~~April 1, 2022.~~

Date of Award Type of award Units awarded Price per share
For the quarter ended March 31, 2023
March 2, 2023 PSU 91,997 $ 32.13
March 2, 2023 RSU 215,627 32.13

~~Table~~March 29, 2024 as a result of ~~Contents~~not meeting the performance metric.

~~FRESH DEL MONTE PRODUCE INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Unaudited)~~

~~6. Share-Based Compensation (continued)~~

Under the 2022 Plan and Prior 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, or as it relates to the 2024 and 2023 PSU awards granted to our Chairman and Chief Executive Officer, 0% to 125% of the award units granted. Provided such criteria are met, the PSUs granted during 2024, 2023 and prior to 2022 vest in three equal annual installments on each of the next three anniversary dates. PSUs granted during 2022 vest in three equal installments in 1) June and July 2023, 2) March 2024, and 3) March 2025. All PSU vesting is contingent on the recipient's continued employment with us.

Expense for RSUs is recognized on a ~~straight line~~straight-line basis over the requisite service period for the entire award. RSUs granted in 2023 and 2021 vest annually in three equal installments over a three-year service period while RSUs granted prior to 2021 vested 20% on the grant date, with 20% vesting on each of the next four anniversaries. RSUs granted in 2022 vest in three equal installments in June 2023, March 2024 and March 2025. RSUs granted to our Board of Directors generally vest after a one-year period.

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FRESH DEL MONTE PRODUCE INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Unaudited)

The fair market value for RSUs and PSUs is based on the closing price of our stock on the grant date. We recognize expenses 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.

Each of our outstanding 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.

7. Inventories, net

Inventories consisted of the following (U.S. dollars in millions):


		March 31, 2023		December 30, 2022
	March 29, 2024					March 29, 2024	December 29, 2023
Finished goods	Finished goods	$	251.7	$	205.8
Raw materials and packaging supplies	Raw materials and packaging supplies	178.0		233.2
Growing crops	Growing crops	217.2		230.0
Total inventories, net	Total inventories, net	$	646.9	$	669.0

8. Debt and Finance Lease Obligations

The following is a summary of long-term debt and finance lease obligations (U.S. dollars in millions):

March 31,
2023 December 30,
2022
Senior unsecured revolving credit facility (see Credit Facility below) $ 472.7 $ 539.8
Finance lease obligations 8.3 8.6
Total debt and finance lease obligations 481.0 548.4
Less: Current maturities (1.4) (1.3)
Long-term debt and finance lease obligations $ 479.6 $ 547.1

~~Table of Contents~~

~~FRESH DEL MONTE PRODUCE INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Unaudited)~~

~~8. Debt and Finance Lease Obligations (continued)~~


	March 29, 2024		December 29, 2023
Senior unsecured revolving credit facility (see Credit Facility below)	$	400.0	$	400.0

Finance lease obligations	7.2		7.5
Total debt and finance lease obligations	407.2		407.5
Less: Current maturities	(1.4)		(1.4)
Long-term debt and finance lease obligations	$	405.8	$	406.1

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~~provided for a five-year, $0.9 billion syndicated senior unsecured revolving credit facility ~~(the “Revolving Credit Facility”)~~ maturing on October 1, 2024. ~~Certain of our direct and indirect subsidiaries have guaranteed the obligations under the~~The Second A&R Credit ~~Agreement. We intend~~Agreement was subsequently amended on December 30, 2022, to ~~use funds borrowed under~~replace the ~~Revolving Credit Facility from time to time for general corporate purposes, working capital, capital expenditures and other permitted investment opportunities.~~Eurocurrency Rate with the Term Secured Overnight Financing Rate ("Term SOFR" effective January 3, 2023.

On ~~December 30, 2022,~~February 21, 2024, we ~~and certain of our subsidiaries executed~~entered into Amendment No. 12 to the Second ~~A&R~~Amended and Restated Credit Agreement (the ~~“Amendment”~~"2024 Amended Credit Facility") with ~~the financial institutions and other lenders named therein, including~~ Bank of America, N.A. as administrative agent and BofA Securities, Inc. as sole lead arranger and sole ~~bookrunner. Pursuant to the Amendment, the reference interest rate on the Revolving~~bookrunner and certain other lenders. The 2024 Amended Credit Facility was amended to replace the Eurocurrency Rate with the Term Secured Overnight Financing Rate (“Term SOFR”) effective January 3, 2023. As amended, Term Loans made under the Revolving Credit Facility can be Base Rate Loans, Term SOFR Loans or Alternative Currency Term Rate Loans. All other material terms of the Second A&R Credit Agreement, as amended, remain unchanged.

~~Effective January 3, 2023, amounts~~provides for a five-year, $0.75 billion syndicated senior unsecured revolving credit facility maturing on February 21, 2029. Amounts borrowed under the ~~Revolving Credit Facility~~revolving credit facility accrue interest at ~~our election, at either (i)~~a rate equal to the Term SOFR ~~Rate (as defined in the Second A&R Credit Agreement)~~rate 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~~1.625% based on our Consolidated Leverage Ratio (as defined in the ~~Second A&R~~2024 Amended Credit ~~Agreement)~~Facility). The ~~Second A&R~~2024 Amended Credit ~~Agreement interest~~Facility also permits, under certain conditions, $200 million of Permitted Receivables Financing (as defined in the 2024 Amended Credit Facility). In addition, we pay a fee on unused commitments at a rate ~~grid provides for five pricing levels for interest rate margins.~~equal to 0.150% to 0.250% based on our Consolidated Leverage Ratio.

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FRESH DEL MONTE PRODUCE INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Unaudited)

The ~~Second A&R~~2024 Amended Credit ~~Agreement~~Facility 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~~2.75 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~~2024 Amended Credit ~~Agreement~~Facility including compliance, on a pro forma basis, with ~~the~~certain financial covenants and ~~ratios set forth therein.~~ratios. 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.

The 2024 Amended Credit Facility contains similar financial covenants to those included within the Second A&R Credit ~~Agreement requires us to comply with certain financial and other covenants.~~Agreement. Specifically, it requires us to maintain 1) a 1) Consolidated Leverage Ratio of not more than ~~3.50~~3.75 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,~~investments, the amount of dividends that can be paid in the future, the ~~amount~~amounts and types of liens and indebtedness, material asset sales, and mergers. Under the ~~Second A&R~~2024 Amended Credit ~~Agreement,~~Facility, 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 (1) the greater of (A) 50% of the Consolidated Net Income (as defined in the ~~Second A&R~~2024 Amended Credit ~~Agreement)~~Facility) for the immediately preceding fiscal year or (B) $25 million (the "Base Dividend Basket") plus (2) commencing in the fiscal year ending December 26, 2025 any portion of the Base Dividend Basket not used in the immediately preceding fiscal year, or (ii) the greatest amount which would not cause the Consolidated Leverage Ratio (determined on a pro forma ~~basis)~~basis as of the date of declaration or payment) to exceed ~~3.25~~3.50 to 1.00. It also provides an allowance for stock repurchases to be an amount not exceeding the greater of (i) ~~$150 million~~(A) $50,000,000 (the "Base Redemption Basket") plus (B) commencing in the ~~aggregate~~fiscal year ending December 26, 2025, any portion of the Base Redemption Basket not used in the immediately preceding fiscal year or (ii) the greatest amount ~~that, after giving pro forma effect thereto and any related borrowings, will~~which would not cause the Consolidated Leverage Ratio (determined on a pro forma basis as of the date of such repurchase) to exceed ~~3.25~~3.50 to 1.00. As of March ~~31, 2023,~~29, 2024, we were in compliance with all of the covenants contained in the ~~Second A&R~~2024 Amended Credit ~~Agreement.~~Facility.

In connection with the 2024 Amended Credit Facility, we paid lender and third-party fees of $2.1 million associated with the amendment. We concluded that the amendment resulted in a modification of debt and as such, determined that debt issuance costs incurred in connection with the 2024 Amended Credit Facility would be deferred and amortized over the term of the new arrangement. Debt issuance costs of ~~$0.5~~$2.1 million and ~~$0.6~~$0.1 million are included in other noncurrent assets on our Consolidated Balance Sheets as of March ~~31, 2023~~29, 2024 and December ~~30, 2022,~~29, 2023, respectively.

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

~~Table of Contents~~

~~FRESH DEL MONTE PRODUCE INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Unaudited)~~

~~8. Debt and Finance Lease Obligations (continued)~~

The following is a summary of the material terms of the ~~Revolving~~2024 Amended Credit Facility and other working capital facilities at March ~~31, 2023~~29, 2024 (U.S. dollars in millions):

Term

Maturity
date

Interest rate

Borrowing
limit

Available
borrowings

Bank of America credit facility

5 years

October 1, 2024

6.03%

900.0

427.3

Bank of America credit facility

Rabobank letter of credit facility

364 days

June 14, 2023

Varies

25.0

16.2

Other working capital facilities

Varies

27.7

18.0

952.7

461.5

Other working capital facilities

The margin for Term SOFR advances as of March ~~31, 2023~~29, 2024 was ~~1.25%~~1.375%.

~~The Revolving~~ We intend to use funds borrowed under the 2024 Amended Credit Facility ~~permits borrowings under the revolving commitment with an interest rate determined based on our leverage ratio~~from time to time for general corporate purposes, which may include working capital needs, capital expenditures, funding of possible acquisitions, share repurchases, and ~~spread over SOFR. In addition, we pay a fee on unused commitments.~~satisfaction of other obligations.

As of March ~~31, 2023,~~29, 2024, we applied ~~$28.0~~$32.8 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 borrowings from our ~~Revolving Credit Facility.~~revolving credit facility. Refer to Note 13, “Derivative Financial Instruments.”

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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 coordinated with the EPA to evaluate the clean-up work required in accordance with the Consent Decree. On July 25, 2022, an Explanation of Significant Differences (ESD) for the Kunia Well Site was filed by the EPA, which formally transitioned the remedy for the Kunia Well Site to a Monitored Natural Attenuation (MNA), thereby reducing our potential liability. In connection with the above decision, we recorded a $9.9 million reduction in our liability during the year ended December 30, 2022 to reflect the decrease in estimated costs associated with the clean-up.

The revised estimate associated with the clean-up costs, and on which our accrual is based, is ~~$2.8~~$2.7 million. As of March ~~31, 2023, $2.5~~29, 2024, $2.4 million was included in other noncurrent liabilities, and $0.3 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 $0.3 million in ~~2023,~~2024, $0.6 million in ~~2024,~~2025, $0.5 million in ~~2025,~~2026, $0.4 million in ~~2026,~~2027, and ~~$0.1~~$0.4 million in ~~2027.~~2028.

California Air Resource Board

On December 21, 2022, the California Air Resource Board ("CARB") issued a Notice of Violation ("NOV") to the Company regarding violations of certain California anti-air pollution regulations by three non-shore capable vessels that were subject to a time charter by us from an unrelated non-U.S. third party. We are cooperating with and assisted CARB in its audits for the alleged violations during 2021. While a formal proceeding by CARB has not been filed, we are discussing a settlement with CARB directly. During the three months ended March 29, 2024, we accrued expenses of $0.5 million as a contingent reserve which are included in asset impairments and other charges, net in the Consolidated Statements of Operations. This amount is in addition to a $0.4 million contingent reserve accrued as of December 29, 2023 related to this matter.

Legal Settlement

Subsequent to March 29, 2024, we entered into a settlement agreement with respect to a litigation matter by a former employee regarding a legacy claim stemming from the 1970s. This matter was in the discovery phase until the first quarter of 2024, when the court set the expected trial date and the parties began to discuss settlement. Accordingly, we have accrued $1.8 million, net of insurance reimbursements, associated with the settlement, which is included in assets impairment and other charges, net in the Consolidated Statements of Operations for the three months ended March 29, 2024.

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.~~

1314

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FRESH DEL MONTE PRODUCE INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Unaudited)

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

March 31,
2023

April 1,
2022

Quarter ended

March 29,
2024

March 31,
2023

Numerator:

Net income attributable to Fresh Del Monte

Produce Inc.

Net income attributable to Fresh Del Monte

Produce Inc.

Net income attributable to Fresh Del Monte

Produce Inc.

Net income attributable to Fresh Del Monte

Produce Inc.

39.0

25.8

Denominator:

Weighted average number of ordinary shares -

Basic

Weighted average number of ordinary shares -

Basic

Weighted average number of ordinary shares -

Basic

Weighted average number of ordinary shares -

Basic

47,892,934

47,665,122

Effect of dilutive securities - share-based

awards

Effect of dilutive securities - share-based

awards

260,606

191,164

Weighted average number of ordinary shares -

Diluted

Weighted average number of ordinary shares -

Diluted

48,153,540

47,856,286

Antidilutive awards (1)

69,790

69,900

Antidilutive awards (1)

Net income per ordinary share attributable to Fresh Del Monte Produce Inc.:

Basic

0.81

0.54

Diluted

0.81

0.54

(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.

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
		March 31, 2023		April 1, 2022
							Quarter ended
						March 29, 2024		March 29, 2024	March 31, 2023
Service cost	Service cost	$	1.4	$	1.5
Interest cost	Interest cost	1.8		1.3
Expected return on assets	Expected return on assets	(0.8)		(0.7)
Amortization of net actuarial loss	Amortization of net actuarial loss	0.2		0.2
Net periodic benefit costs	Net periodic benefit costs	$	2.6	$	2.3

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 $0.7 million for the quarter ended March 29, 2024 and $0.5 million for the quarter ended March 31, ~~2023 and $0.8 million for the quarter ended April 1, 2022.~~

~~Table of Contents~~

~~FRESH DEL MONTE PRODUCE INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Unaudited)~~

~~11. Retirement and Other Employee Benefits (continued)~~2023.

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, curtailment and settlement expenses, and amortization of net actuarial losses) are recorded in the Consolidated Statements of Operations in other expense, net.

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FRESH DEL MONTE PRODUCE INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Unaudited)

12. Business Segment Data

•Banana

•Other products and services - includes our third-party freight and logistic services business and our Jordanian poultry and meats business.

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






		Quarter ended
		March 31, 2023				April 1, 2022
Segments:	Segments:	Net Sales		Gross Profit		Net Sales		Gross Profit
Segments:
Segments:
Fresh and value-added products
Fresh and value-added products
Fresh and value-added products	Fresh and value-added products	$	643.4	$	47.1	$	672.7	$	44.4
Banana	Banana	425.1		43.2		406.0		37.7
Banana
Banana
Other products and services	Other products and services	60.0		6.7		58.2		7.7
Other products and services
Other products and services
Totals
Totals
Totals	Totals	$	1,128.5	$	97.0	$	1,136.9	$	89.8

The following table indicates our net sales by geographic region (U.S. dollars in millions):


		Quarter ended
				Quarter ended
				Quarter ended
				Quarter ended
Net sales by geographic region:	Net sales by geographic region:	March 31, 2023		April 1, 2022		Net sales by geographic region:	March 29, 2024	March 31, 2023
North America	North America	$	667.2	$	690.0
Europe	Europe	216.6		199.4
Asia	Asia	112.0		114.3
Middle East	Middle East	101.8		103.1
Other	Other	30.9		30.1
Totals	Totals	$	1,128.5	$	1,136.9

1516

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FRESH DEL MONTE PRODUCE INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Unaudited)

~~12. Business Segment Data (continued)~~

The following table indicates our net sales by product (U.S. dollars in millions) and, in each case, the percentage of the total represented thereby:


		Quarter ended
		March 31, 2023					April 1, 2022
												Quarter ended
						March 29, 2024							March 29, 2024								March 31, 2023
Fresh and value-added products:	Fresh and value-added products:
Fresh-cut fruit
Fresh-cut fruit
Fresh-cut fruit	Fresh-cut fruit	$	124.7	11	%		$	122.0	11	%				$	119.8			11		11	%		$	124.7			11		11	%
Fresh-cut vegetables	Fresh-cut vegetables	81.9		7	%		83.7		7	%	Fresh-cut vegetables					81.4			7		7	%			81.9			7		7	%
Pineapples	Pineapples	149.8		14	%		131.5		11	%	Pineapples					163.6			15		15	%			149.8			14		14	%
Avocados	Avocados	64.7		6	%		89.8		8	%	Avocados					79.5			7		7	%			64.7			6		6	%
Non-tropical fruit	Non-tropical fruit	61.3		5	%		63.4		6	%	Non-tropical fruit					60.5			6		6	%			61.3			5		5	%
Prepared foods	Prepared foods	66.6		6	%		74.0		6	%	Prepared foods					69.5			6		6	%			66.6			6		6	%
Melons	Melons	45.6		4	%		43.7		4	%	Melons					53.2			5		5	%			45.6			4		4	%
Tomatoes	Tomatoes	5.4		—	%		6.5		1	%	Tomatoes					3.7			—		—	%			5.4			—		—	%
Vegetables	Vegetables	26.5		2	%		36.0		3	%	Vegetables					25.6			2		2	%			26.5			2		2	%
Other fruit and vegetables	Other fruit and vegetables	16.9		1	%		22.1		2	%	Other fruit and vegetables					20.0			2		2	%			16.9			1		1	%
Total fresh and value-added products	Total fresh and value-added products	643.4		56	%		672.7		59	%	Total fresh and value-added products					676.8			61		61	%			643.4			56		56	%
Banana	Banana	425.1		38	%		406.0		36	%	Banana					379.5			34		34	%			425.1			38		38	%
Other products and services	Other products and services	60.0		6	%		58.2		5	%	Other products and services					51.6			5		5	%			60.0			6		6	%
Totals	Totals	$	1,128.5	100	%		$	1,136.9	100	%	Totals					$	1,107.9		100		100	%			$	1,128.5		100		100	%

13. Derivative Financial Instruments

Our derivative financial instruments reduce our exposure to fluctuations in foreign exchange rates and variable interest rates. We designate our derivative financial instruments as cash flow hedges.

Counterparties expose us to credit loss in the event of non-performance of hedges. We monitor our exposure to counterparty non-performance risk both at inception of the hedge and at least quarterly thereafter.

Fluctuations in the value of the derivative instruments are generally offset by changes in the cash flows of the underlying exposures being hedged. A cash flow hedge requires that the change in the fair value of a derivative instrument be recognized 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 and is presented in the same income statement line item as the earnings effect of the hedged item.

Certain of our derivative instruments contain provisions that require the current credit relationship between us and our counterparty to be maintained throughout the term of the derivative instruments. If that credit relationship changes, certain provisions could be triggered, and the counterparty could request immediate collateralization of derivative instruments in a net liability position above a certain threshold. The aggregate fair value of all derivative instruments with a credit-risk-related contingent feature that ~~are~~were in a liability position on March ~~31, 2023 is $3.8~~29, 2024 was $0.1 million. As of March ~~31, 2023,~~29, 2024, no triggering event has occurred and thus we are not required to post collateral.

Derivative instruments are disclosed on a gross basis. There are various rights of setoff associated with our derivative instruments that are subject to an enforceable master netting arrangement or similar agreements. Although various rights of setoff and master netting arrangements or similar agreements may exist with the individual counterparties, individually, these financial rights are not material.

~~Table of Contents~~

~~FRESH DEL MONTE PRODUCE INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Unaudited)~~

~~13. Derivative Financial Instruments (continued)~~

Cash flows from derivative instruments that are designated as cash flow hedges are classified in the same category as the cash flows from the underlying hedged items. In the event that hedge accounting is discontinued, cash flows related to changes in fair value subsequent to the date of discontinuance are classified within investing activities.

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FRESH DEL MONTE PRODUCE INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Unaudited)

Foreign Currency Hedges

WeOur results of operations and financial condition are exposed to fluctuations in currency exchange rates against the U.S. dollar, ~~on our results of operations and financial condition,~~ and we mitigate that exposure by entering into foreign currency forward ~~contracts.~~contracts or foreign currency collars. A foreign currency collar consists of a written call option and a purchased put option to sell the foreign currency at a range of predetermined exchange rates. A foreign currency collar guarantees that the exchange rate of the currency will not fluctuate beyond the range of the options’ strike prices. Certain of our subsidiaries periodically enter into foreign currency forward contracts or foreign currency collars in order to hedge portions of forecasted sales or cost of sales denominated in foreign currencies, which generally mature within one year. At March ~~31, 2023,~~29, 2024, our foreign currency forward and collar contracts hedge a portion of our ~~2023~~2024 foreign currency exposure.

The foreign currency forward contracts and foreign currency collars qualifying as cash flow hedges were designated as single-purpose cash flow hedges of forecasted cash flows.

We had the following outstanding foreign currency ~~forward~~ contracts as of March ~~31, 2023~~29, 2024 (in millions):

Foreign currency contracts qualifying as cash flow hedges:

Notional amount

Euro

EUR

~~93.8~~50.8

British pound

GBP

~~18.4~~4.4

~~Japanese yen~~

~~JPY~~

~~1,820.2~~

~~Chilean peso~~

~~CLP~~

~~14,547.9~~

Kenyan shilling

KES

~~2,949.6~~2,098.4

~~Korean won~~

~~KRW~~

~~13,150.0~~

Interest Rate Contracts

Gains or losses on interest rate swaps are recorded in other comprehensive income and are subsequently reclassified into earnings as the interest expense on debt is recognized in earnings. At March ~~31, 2023,~~29, 2024, the notional value of interest rate contracts outstanding was $400.0 million, with $200.0 million maturing in June 2024 and the remaining $200.0 million maturing in 2028. Refer to Note 8, “Debt and Finance Lease Obligations.”

The following table reflects the fair values of derivative instruments, which are designated as level 2 in the fair value hierarchy, as of March 29, 2024 and December 29, 2023 (U.S. dollars in millions):


	Derivatives designated as hedging instruments (1)
	Foreign exchange contracts				Interest rate swaps			Total
Balance Sheet location:	March 29, 2024		December 29, 2023			March 29, 2024		December 29, 2023		March 29, 2024		December 29, 2023
Asset derivatives:
Prepaid expenses and other current assets	$	1.3	$	0.1		$	0.9	$	2.1	$	2.2	$	2.2
Other noncurrent assets	—		—			9.0		5.8		9.0		5.8
Total asset derivatives	$	1.3	$	0.1		$	9.9	$	7.9	$	11.2	$	8.0

Liability derivatives:
Accounts payable and accrued expenses	$	0.1	$	0.4		$	—	$	—	$	0.1	$	0.4

Total liability derivatives	$	0.1	$	0.4		$	—	$	—	$	0.1	$	0.4

(1) See Note 14, “Fair Value Measurements,” for fair value disclosures.

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FRESH DEL MONTE PRODUCE INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Unaudited)

~~13. Derivative Financial Instruments (continued)~~

The following table reflects the fair values of derivative instruments, which are designated as level 2 in the fair value hierarchy, as of March 31, 2023 and December 30, 2022 (U.S. dollars in millions):

Derivatives designated as hedging instruments (1)
Foreign exchange contracts Interest rate swaps Total
Balance Sheet location: March 31,
2023 December 30,
2022 March 31,
2023 December 30,
2022 March 31,
2023 December 30,
2022
Asset derivatives:
Prepaid expenses and other current assets $ 0.8 $ — $ — $ — $ 0.8

$ —
Other noncurrent assets — — 9.3 15.8 9.3 15.8
Total asset derivatives $ 0.8 $ — $ 9.3 $ 15.8 $ 10.1 $ 15.8
Liability derivatives:
Accounts payable and accrued expenses $ 3.8 $ 6.5 $ — $ — $ 3.8

$ 6.5
Other noncurrent liabilities — 0.2 — — —

0.2
Total liability derivatives $ 3.8 $ 6.7 $ — $ — $ 3.8 $ 6.7

~~(1)~~ ~~See Note 14, “Fair Value Measurements,” for fair value disclosures.~~

We expect that $~~4.5~~5.2 million of the net fair value of our cash flow hedges recognized as a net gain in accumulated other comprehensive loss will be transferred to earnings during the next 12 months, and the remaining net gain of ~~$2.2~~$4.9 million over the following 5 years, along with the earnings effect of the related forecasted transactions.

The following table reflects the effect of derivative instruments on the Consolidated Statements of Comprehensive Income for the quarters ended March 29, 2024 and March 31, 2023 ~~and April 1, 2022~~ (U.S. dollars in millions):

Net amount of gain (loss) recognized in other
comprehensive income (loss) on derivatives

Net amount of gain (loss) recognized in other comprehensive income on derivatives

Quarter ended

Derivative instruments

March 31,
2023

April 1,
2022

Derivative instruments

March 29,
2024

March 31,
2023

Foreign exchange contracts

4.9

17.6

Interest rate swaps, net of tax

(4.9)

20.2

Total

—

37.8

Refer to Note 15, “Accumulated Other Comprehensive Loss,” for the effect of derivative instruments on the Consolidated Statements of Operations related to amounts reclassified from accumulated other comprehensive loss for the quarters ended March 29, 2024 and March 31, ~~2023 and April 1, 2022.~~2023.

14. Fair Value Measurements

Fair Value of Derivative Instruments

Our derivative assets or liabilities include foreign exchange and interest rate derivatives that are measured at fair value using observable market inputs such as forward rates, interest rates, and our own credit risk as well as an evaluation of our counterparties' credit risks. We use an income approach to value our outstanding foreign currency and interest rate hedges, which consists of a discounted cash flow model that takes into account the present value of future cash flows under the terms of the contract using current market information as of the measurement date such as foreign currency spot rates, forward rates and interest rates. Additionally, we include an element of default risk based on observable inputs into the fair value calculation. Based on these inputs, the derivative assets or liabilities are classified within Level 2 of the valuation hierarchy.

~~Table of Contents~~

~~FRESH DEL MONTE PRODUCE INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Unaudited)~~

~~14. Fair Value Measurements (continued)~~

The following table provides a summary of the fair values of our derivative financial instruments measured on a recurring basis (U.S. dollars in millions):


		Fair value measurements
		Fair value measurements
		Fair value measurements
		Fair value measurements					Foreign currency forward contracts, net asset (liability)						Interest rate contracts, net asset
		Foreign currency forward contracts, net liability				Interest rate contracts, net asset
		March 31, 2023		December 30, 2022				March 31, 2023		December 30, 2022
	March 29, 2024											March 29, 2024		December 29, 2023	March 29, 2024	December 29, 2023
Quoted prices in active markets for identical assets (Level 1)	Quoted prices in active markets for identical assets (Level 1)	$	—	$	—			$	—	$	—
Significant observable inputs (Level 2)	Significant observable inputs (Level 2)	(3.0)		(6.7)				9.3		15.8
Significant unobservable inputs (Level 3)	Significant unobservable inputs (Level 3)	—		—				—		—

In estimating our fair value disclosures for financial instruments, we use the following methods and assumptions:

Cash and cash equivalents: The carrying amount reported in the Consolidated Balance Sheets for these items approximates fair value due to their liquid nature and are classified as Level 1.

Trade accounts receivable and other accounts receivable, net: The carrying value reported in the Consolidated Balance Sheets for these items is net of allowances, which includes a degree of counterparty non-performance risk and are classified as Level 2.

Table of Contents

FRESH DEL MONTE PRODUCE INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Unaudited)

Accounts payable and other current liabilities: The carrying value reported in the Consolidated Balance Sheets for these items approximates their fair value, which is the likely amount for which the liability with short settlement periods would be transferred to a market participant with a similar credit standing as ours and are classified as Level 2.

Long-term debt: The carrying value of our long-term debt reported in the Consolidated Balance Sheets approximates their fair value since they bear interest at variable rates which contain an element of default risk. The fair value of our long-term debt is estimated using Level 2 inputs based on quoted prices for those or similar instruments. Refer to Note 8, “Debt and Finance Lease Obligations.”

Fair Value of Non-Financial Assets

The fair value of the banana reporting unit's goodwill and the prepared food reporting unit's goodwill and remaining trade names and trademarks are highly sensitive to differences between estimated and actual cash flows and changes in the related discount rate used to evaluate the fair value of these assets. We disclosed the sensitivity related to the banana reporting unit's goodwill and the prepared food reporting unit's goodwill and remaining trade names and trademarks in our notes to the consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December ~~30, 2022.~~

~~In addition, certain definite-lived intangible assets related to our fresh and value-added products segment, which had a carrying value~~29, 2023. Our current estimates of ~~$100.1 million as of the quarter ended March 31, 2023, are sensitive to changes in estimated cash flows. To the extent that~~ future ~~developments result in~~ cash flows ~~that~~depend on our ability to demonstrate successful implementation of our strategies to improve sales and profitability from these activities over the upcoming quarters. If we are ~~less than currently estimated levels,~~unable to demonstrate successful implementation of these strategies, it could lead to impairment of some or all of these assets.

~~Included in the $21.9 million of assets~~Assets held for sale, which had a carrying amount of $11.7 million as of March ~~31, 2023 were the following: (i) $16.2~~29, 2024, primarily consisted of $8.9 million is related to ~~our plastics business~~a distribution facility in ~~South~~North America, ~~and primarily included inventory, trade accounts receivable, and property, plant, and equipment, net, (ii) $2.4~~$1.7 million ~~consists of a facility and~~ related ~~assets in Europe, (iii) $2.3 million consists of facilities~~to an office and farm land in ~~South~~Central America and ~~(iv) the remaining $1.0~~$0.8 million ~~consists of farm land~~related to a warehouse in ~~Central America. Included in current liabilities held for sale are $2.1 million of accounts payable and accrued expenses associated with our plastics business in South America.~~

Europe. Assets held for sale are recognized at the lower of cost or fair value less cost to sell. The fair value measurements for our held for sale assets are generally based on Level 3 inputs, which include information obtained from third-party appraisals.

~~Table of Contents~~

~~FRESH DEL MONTE PRODUCE INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Unaudited)~~

~~14. Fair Value Measurements (continued)~~

During the quarter ended March ~~31, 2023, our 60% owned joint venture in Saudi Arabia completed the sale of two distribution centers and related assets which were previously held for sale. We~~29, 2024, we received ~~net~~ proceeds of ~~$66.1~~$17.8 million from the sale of ~~these~~ assets previously held for sale and recorded a gain on disposal of property, plant and equipment, net of ~~$20.5~~$14.7 million. Contemporaneously with the execution of the sale and purchase agreement, we entered into an operating lease agreement in which we leased back approximately 31% of the facilities for a term of five years. The lease agreement allows for an option to renew for additional terms, subject to the written agreement of both parties.

Additionally, during the quarter ended March 31, 2023, we completed the sale of an idle production facility in North America which was previously held for sale. We received net proceeds of $23.0 million from the sale of this asset and recorded a gain on disposal of property, plant and equipment, net of $6.8 million. Contemporaneously with the execution of the sale and purchase agreement, we entered into an operating lease agreement in which we leased back a portion of the facility for a term of 21 months.

~~15. Accumulated Other Comprehensive Loss~~

~~The following table includes the changes in accumulated other comprehensive loss by component (U.S. dollars in millions):~~

Changes in Accumulated Other Comprehensive Loss by Component (1)
Cash Flow Hedges Foreign Currency Translation Adjustment Retirement Benefit Adjustment Total
Quarter ended March 31, 2023
Balance at December 30, 2022 $ 6.0 $ (36.0) $ (11.5) $ (41.5)
Other comprehensive income (loss)
    before reclassifications (0.4) (3) 2.0 (2) (0.5) 1.1
Amounts reclassified from accumulated
    other comprehensive loss 0.4

— 0.1 0.5
Net current period other comprehensive
    income (loss) — 2.0 (0.4) 1.6
Balance at March 31, 2023 $ 6.0 $ (34.0) $ (11.9) $ (39.9)
Quarter ended April 1, 2022
Balance at December 31, 2021 $ (40.9) $ (17.4) $ (8.6) $ (66.9)
Other comprehensive income (loss)
    before reclassifications 33.5 (3) (7.4) (2) (0.3)

25.8
Amounts reclassified from accumulated
    other comprehensive loss 4.3 — 0.2 4.5
Net current period other comprehensive
    income (loss) 37.8 (7.4) (0.1) 30.3
Balance at April 1, 2022 $ (3.1) $ (24.8) $ (8.7) $ (36.6)

~~(1)~~ ~~All amounts are net of tax and noncontrolling interest.~~

~~(2)~~ Includes a gain of $0.8 million and a loss of $2.6 million for the quarter ended March 31, 2023 and quarter ended April 1, 2022, respectively, on intra-entity foreign currency transactions that are of a long-term-investment nature.

~~(3)~~ ~~Includes a tax effect of $1.5 million and $(3.0) million for the quarter ended March 31, 2023 and quarter ended April 1, 2022, respectively.~~

Table of Contents

FRESH DEL MONTE PRODUCE INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Unaudited)

15. Accumulated Other Comprehensive Loss ~~(continued)~~

The following table includes ~~details about amounts reclassified from~~the changes in accumulated other comprehensive loss by component (U.S. dollars in millions):

Amount of (gain) loss reclassified from accumulated other comprehensive loss
Quarter Ended
Details about accumulated other comprehensive loss components March 31, 2023 April 1, 2022 Affected line item in the statement where net income is presented
Cash flow hedges:
Designated as hedging instruments:
Foreign currency cash flow hedges $ (0.1) $ (1.6) Net sales
Foreign currency cash flow hedges 2.2 3.2 Cost of products sold
Interest rate swaps (1.7) 2.7 Interest expense
Total $ 0.4 $ 4.3
Amortization of retirement benefits:
Actuarial losses 0.1 0.2 Other expense, net
Total $ 0.1 $ 0.2


	Changes in Accumulated Other Comprehensive Loss by Component (1)
	Cash Flow Hedges			Foreign Currency Translation Adjustment			Retirement Benefit Adjustment		Total
	Quarter ended March 29, 2024
Balance at December 29, 2023	$	3.8		$	(37.1)		$	(10.0)	$	(43.3)
Other comprehensive income (loss) before reclassifications	6.5		(3)	(4.6)		(2)	(1.0)		0.9
Amounts reclassified from accumulated other comprehensive loss	(0.7)			—			0.4		(0.3)
Net current period other comprehensive income (loss)	5.8			(4.6)			(0.6)		0.6
Balance at March 29, 2024	$	9.6		$	(41.7)		$	(10.6)	$	(42.7)


	Quarter ended March 31, 2023
Balance at December 30, 2022	$	6.0		$	(36.0)		$	(11.5)	$	(41.5)
Other comprehensive income (loss) before reclassifications	(0.4)		(3)	2.0		(2)	(0.5)		1.1
Amounts reclassified from accumulated other comprehensive loss	0.4			—			0.1		0.5
Net current period other comprehensive income (loss)	—			2.0			(0.4)		1.6
Balance at March 31, 2023	$	6.0		$	(34.0)		$	(11.9)	$	(39.9)

~~16. Shareholders’ Equity~~

~~Our shareholders have authorized 50,000,000 preferred shares at $0.01 par value,~~(1) All amounts are net of ~~which none are issued or outstanding at March 31, 2023,~~tax and ~~200,000,000 ordinary shares at $0.01 par value, of which 47,998,746 are issued and outstanding at March 31, 2023.~~noncontrolling interest.

(2)

~~The below is~~ Includes a ~~summary~~loss of $2.8 million and a gain of $0.8 million for the ~~dividends paid per share during the~~quarter ended March 29, 2024 and quarter ended March 31, 2023, respectively, on intra-entity foreign currency transactions that are of a long-term-investment nature.

(3) Includes a tax effect of $0.1 million and $1.5 million for the quarter ended ~~April 1, 2022. These dividends were declared~~March 29, 2024 and ~~paid within the same fiscal quarter.~~

Quarter ended
March 31, 2023 April 1, 2022
Dividend Payment Date Cash Dividend per Ordinary Share Dividend Payment Date Cash Dividend per Ordinary Share
March 31, 2023 0.15 April 1, 2022 0.15

~~We paid $7.2 million in dividends during each of the quarters~~quarter ended March 31, 2023, ~~and April 1, 2022.~~

respectively.

~~On May 2, 2023, our Board of Directors declared a quarterly cash dividend of twenty cents ($0.20) per share, payable on June 9, 2023, to shareholders of record on May 17, 2023.~~

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FRESH DEL MONTE PRODUCE INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Unaudited)

~~17. Subsequent Events~~The following table includes details about amounts reclassified from accumulated other comprehensive loss by component (U.S. dollars in millions):


	Amount of (gain) loss reclassified from accumulated other comprehensive loss
	March 29, 2024		March 31, 2023
Details about accumulated other comprehensive loss components	Quarter ended		Quarter ended		Affected line item in the statement where net income is presented
Cash flow hedges:
Designated as hedging instruments:
Foreign currency cash flow hedges	$	(0.3)	$	(0.1)	Net sales

Foreign currency cash flow hedges	2.1		2.2		Cost of products sold
Interest rate swaps	(2.6)		(1.7)		Interest expense


Total	$	(0.8)	$	0.4
Amortization of retirement benefits:
Actuarial losses	0.2		0.1		Other expense, net
Curtailment and settlement losses	0.3		—		Asset impairment and other charges, net
Total	$	0.5	$	0.1

~~As part~~16. Shareholders’ Equity

Our shareholders have authorized 50,000,000 preferred shares at $0.01 par value, of which none were issued or outstanding at March 29, 2024, and 200,000,000 ordinary shares at $0.01 par value, of which 47,896,132 were issued and outstanding at March 29, 2024.

The below is a summary of the ~~Mann Packing acquisition in 2018, we acquired a put option exercisable by~~dividends paid per share during the 25% shareholder of one of the acquired subsidiaries. The put option allows the noncontrolling shareholder to sell its 25% noncontrolling interest to us for a multiple of the subsidiary's adjusted earnings. As the put option is outside of our control, the carrying value of the 25% noncontrolling interest is presented as a redeemable noncontrolling interest outside of permanent equity on our Consolidated Balance Sheet. At each reporting period, the redeemable noncontrolling interest is recognized at the higher of (1) the initial carrying amount adjusted for accumulated earningsquarter ended March 29, 2024 and ~~distributions or (2) the contractually-defined redemption value as of the balance sheet date. At~~quarter ended March 31, ~~2023,~~2023. These dividends were declared and paid within the redeemable noncontrolling interest had a carrying amount of $49.4 million. Effective April 1, 2023, the noncontrolling shareholder exercised its put option right and accordingly, we expect to close the purchase of the remaining 25% of this subsidiarysame fiscal quarter.

Quarter ended

March 29, 2024

March 31, 2023

Dividend Payment Date

Cash Dividend per Ordinary Share

Dividend Payment Date

Cash Dividend per Ordinary Share

March 29, 2024

0.25

March 31, 2023

0.15

We paid $11.9 million in dividends during the ~~second~~ quarter ~~of 2023 for approximately $5.2~~ended March 29, 2024 and $7.2 million in dividends during the quarter ended March 31, 2023.

On April 30, 2024, our Board of Directors declared a quarterly cash consideration. The transaction will be treated as an equity transaction, with the differential between the redeemable noncontrolling interest carrying amount and cash purchase price being recognized as an increase in shareholders' equitydividend of twenty-five cents ($0.25) per share, payable on ~~our Consolidated Balance Sheet.~~June 7, 2024, to shareholders of record on May 16, 2024.

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Overview

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, 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~~production operations are located in North, Central and South America, Asia and Africa.

•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 third-party freight and logistic services business and our Jordanian poultry and meats business.

Our vision is to inspire healthy lifestyles through wholesome and convenient products. Our strategy is founded on six goals:

Current Macroeconomic Environment and Inflation Impact

~~Since~~Starting in fiscal year 2021, we ~~have been~~began experiencing inflationary and cost pressures due to volatility and disruption in the global economy which ~~have~~ increased our production and distribution costs due to a multitude of external factors. Specifically, costs of packaging materials, fertilizers, labor, fuel, and ocean and inland freight ~~have~~were significantly ~~increased,~~impacted, and ~~continue~~continued to adversely affect our profitability and operating cash flows during ~~the current fiscal year. We expect inflationary pressures to persist throughout~~ 2023 ~~although at lower levels than experienced in 2022.~~and 2024.

In response to these persisting inflationary and cost pressures, we instituted price increases on the majority of our products. Additionally, certain of our contracts for key products include contractually indexed fuel and freight surcharges that vary depending on commodity pricing. We expect that these inflation-justified price increases and surcharges will continue to help mitigate our increased costs.

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In addition, the invasion of Ukraine by Russia has led to further economic disruption and, while we do not operate in Ukraine and our operations in Russia are de minimis, the conflict has exacerbated inflationary costs, supply chain and logistical pressures that negatively impacted our business. Similarly, recent shipping disruptions in the Red Sea and surrounding waterways have created logistical pressures that have negatively impacted our business, including impacts to the availability of certain shipping routes resulting in increased shipping times. We have taken actions to divert our shipping routes in order to minimize impacts on our business, however we may not be able to mitigate the impact of longer shipping routes if conditions deteriorate.

Based on the stabilization of inflation in certain key markets during the latter part of 2023, we do not anticipate further inflation-justified price increases and surcharges in 2024. We are actively monitoring region-specific macroeconomic factors to mitigate increases in our costs, if necessary.

Optimization Program

During fiscal 2020, we began a comprehensive review of our asset portfolio, which we continuously update, aimed at identifying non-strategic and underutilized assets to dispose of while reducing costs and driving further efficiencies in our ~~operations.~~operations (which we refer to as the "2020 Optimization Program"). As a result of the review, we identified assets across all of our regions, primarily consisting of underutilized facilities and land, which we made a strategic decision to sell. During the ~~quarter ended March 31,~~first three months of 2023, we ~~sold~~completed the sales of various assets including two distribution centers and related assets in Saudi Arabia and an idle production facility in North America. Upon the closing of the sale of these assets in the first quarter of 2023, we completed the 2020 Optimization Program.

Strategic Alternatives for Mann Packing Operation

During the second half of 2023, we conducted a strategic review and assessed our operational priorities of our North America operations, including our subsidiary, Mann Packing. Preliminary findings of this review were finalized in the fourth quarter of 2023. We announced in conjunction with our fourth quarter of 2023 earnings that we were exploring strategic alternatives for the business. This process is ongoing and we intend to make a decision by the third quarter of 2024, however there can be no assurance that this process will result in any specific strategic outcome.

Income Taxes

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RESULTS OF OPERATIONS

Consolidated Financial Results

The following summarizes the more significant factors impacting our operating results for the 13-week periods ended March 29, 2024 (also referred to as the “first quarter ~~ended~~of 2024”) and March 31, 2023 (also referred to as the “first quarter of 2023”) ~~and April 1, 2022 (also referred to as the “first quarter of 2022”)~~.

Quarter ended

March 31,
2023

April 1,
2022

Quarter ended

March 29,
2024

Net sales

1,128.5

1,136.9

Gross profit

97.0

89.8

Gross profit

Selling, general and administrative expenses

47.6

45.2

Operating income

74.5

39.8

Operating income

Net sales - Net sales for the first quarter of ~~2023 decreased $8.4~~2024 was $1,107.9 million, ~~or 1%, when~~ compared with $1,128.5 million in the ~~prior-year period.~~first quarter of 2023. The decrease in net sales was ~~impacted~~a result of lower banana net sales, driven by lower ~~per unit selling prices of avocados,~~volume and pricing, and lower net sales ~~volumes~~in the other products and services segment. The decrease was partially offset by an increase in net sales in the fresh and value-added ~~products~~product segment, driven by higher overall sales volume and ~~negative fluctuations~~pricing in ~~exchange rates, primarily in Europe and Asia. Partially offsetting~~ the ~~decrease in net sales were higher per unit selling prices across most other product categories and higher banana sales volume.~~segment.

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Gross profit - Gross profit for the first quarter of ~~2023 increased to $97.0~~2024 was $82.3 million, compared with ~~$89.8~~$97.0 million in the ~~prior-year period driven~~first quarter of 2023. Gross profit was impacted by ~~higher per unit selling prices across most product categories combined with~~ lower ~~distribution costs. Partially offsetting the increase in gross profit were~~overall net sales, higher production and procurement costs, ~~across most product categories~~ and ~~higher~~the negative impact of fluctuations in exchange rates partially offset by lower ocean freight ~~cost.~~ and distribution costs.

Gross profit infor the first quarter of 2024 included $(1.0) million of other product-related credits comprised primarily of $2.2 million of insurance recoveries associated with damages tied to the flooding of a seasonal production facility in Greece during the third quarter of 2023, partially offset by $1.2 million of severance charges from the outsourcing of certain functions of our fresh and value-added operations. In the first quarter of 2023, gross profit included $1.8 million of other product-related charges ~~mostly consisting of~~related inventory write-offs ~~in connection with~~due to the sale of two distribution centers in ~~Saudi Arabia. There were no other product-related charges in~~ the ~~first quarter of 2022.~~Middle East.

Selling, general and administrative expenses - Selling, general and administrative expenses ~~increased by $2.4 million, or 5%, in~~for the first quarter of ~~2023~~2024 increased by $3.1 million, or 7%, when compared with the first quarter of ~~2022. The increase was~~2023, primarily ~~driven by~~due to higher ~~employee compensation,~~ professional ~~services costs,~~fees in North America and ~~advertising~~higher payroll, marketing and promotional ~~expenses.~~activities in Europe and Africa, partially offset by a reduction in amortization of definite lived intangible assets due to the impairment of the carrying value of customer relationships and trade name intangible assets during the fourth quarter of 2023.

Gain ~~(loss)~~ on disposal of property, plant and equipment, net - The gain on disposal of property, plant and equipment, net for the first quarter of 2024 of $14.8 million primarily consisted of the sale of two idle facilities in South America. The gain on disposal of property, plant and equipment, net for the first quarter of 2023 primarily related to a $20.5 million gain on the sale of two distribution centers and related assets in Saudi Arabia and a $6.8 million gain on the sale of an idle production facility in North America. ~~The loss on disposal of property, plant and equipment, net during the first quarter of 2022 primarily related to the disposal of low-yielding banana crops in Central America.~~

Asset impairment and other charges, net - - Asset impairment and other charges, net of $2.3 million in the first quarter of 2024 primarily consisted of the accrual of a settlement agreement with respect to a litigation matter by a former employee, net of insurance reimbursements.

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Asset impairment and other charges, net of $2.4 million induring the ~~current year period~~first quarter of 2023 consisted of expenses incurred in connection with a cybersecurity incident ~~which~~that occurred during early 2023. The incident temporarily impacted certain of our operational and information technology systems. We were able to promptly recover our critical operational data and business systems and accordingly, the incident did not have a material impact on our financial results for the first quarter of ~~2023 and is not expected to have a material impact on future quarters.~~2023. However, we did incur incremental costs primarily related to the engagement of specialized legal counsel and other incident response advisors. ~~We maintain cyber incident insurance with a deductible of $1.0 million and expect to recover a significant portion of the incurred charges above our deductible.~~

Asset impairment and other charges, net of $1.0 million for the first quarter of 2022 primarily related to severance expenses in connection with the departure of our former President and Chief Operating Officer.

Operating income - Operating income ~~increased~~decreased by ~~$34.7~~$30.4 million in the first quarter of ~~2023~~2024 when compared with ~~the prior-year period. The increase in operating income was~~first quarter of 2023, primarily ~~driven by the~~due to lower gross profit and a higher gain on disposal of property, plant and equipment, net in the ~~first quarter of 2023 as compared to a net loss on disposal in the~~ prior-year ~~period, and higher gross profit.~~period.

Interest expense - Interest expense was ~~higher in~~$5.2 million for the first quarter of 2024, compared with $8.0 million for the first quarter of 2023 ~~when compared with the prior-year period~~ due to ~~higher interest rates.~~lower average debt balances.

Other expense, net - Other expense, net ~~increased~~decreased by ~~$5.3~~$1.6 million in the first quarter of ~~2023~~2024, when compared with the first quarter of ~~2022, mainly~~2023, primarily due to ~~higher~~lower foreign ~~currency related~~currency-related losses.

Income tax provision - Income tax provision was $5.3 million for the first quarter of 2024 compared with $9.5 million for the first quarter of ~~2023 compared with $5.8 million for the first quarter of 2022.~~2023. The ~~increase~~decrease in the income tax provision in the first quarter of 2024 was primarily due to ~~increased~~decreased earnings in certain higher tax jurisdictions.

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Financial Results by Segment

The following table presents net sales and gross profit by segment (U.S. dollars in millions), and in each case, the percentage of the total represented thereby and gross margin percentage:


		Quarter ended																					Quarter ended
		March 31, 2023										April 1, 2022											March 29, 2024												March 31, 2023
Segment	Segment	Net Sales				Gross Profit				Gross Margin		Net Sales				Gross Profit				Gross Margin		Segment	Net Sales					Gross Profit					Gross Margin				Net Sales					Gross Profit					Gross Margin
Fresh and value-added products	Fresh and value-added products	$	643.4	57	%	$	47.1	49	%	7.3	%	$	672.7	59	%	$	44.4	49	%	6.6	%	Fresh and value-added products	$	676.8	61	61	%		$	55.9	68	68		%		8.3		%	$	643.4	57		57	%	$	47.1		49	49	%	7.3	%
Banana	Banana	425.1		38	%	43.2		45	%	10.2	%	406.0		36	%	37.7		42	%	9.3	%	Banana	379.5		34	34	%		21.8		26	26		%		5.7		%	425.1		38		38	%	43.2			45	45	%	10.2	%
Other products and services	Other products and services	60.0		5	%	6.7		6	%	11.2	%	58.2		5	%	7.7		9	%	13.1	%	Other products and services	51.6		5	5	%		4.6		6	6		%		8.9		%	60.0		5		5	%	6.7			6	6	%	11.2	%
Totals	Totals	$	1,128.5	100	%	$	97.0	100	%	8.6	%	$	1,136.9	100	%	$	89.8	100	%	7.9	%	Totals	$	1,107.9	100	100	%		$	82.3	100	100		%		7.4		%	$	1,128.5	100		100	%	$	97.0		100	100	%	8.6	%

First Quarter of ~~2023~~2024 Compared with First Quarter of ~~2022~~2023

Fresh and value-added products

Net sales for the first quarter of ~~2023 decreased by $29.3~~2024 were $676.8 million, ~~or 4%, when~~ compared with $643.4 million in the prior-year period, primarily as a result of ~~lower~~higher sales volume of pineapples, melons, and prepared foods and higher per unit selling prices of avocados, due to market volatility combined with a decrease in total sales volume for the segment, mostly of fresh-cut vegetables, prepared foods, vegetables, and to a lesser extent, fresh-cut fruit. The lower sales volume for fresh-cut vegetable and vegetable products was primarily due to proactive steps taken to improve profitability. We expect these conditions to continue in the upcoming quarter. The decrease was partially offset by ~~higher per unit selling prices across most other product categories and higher pineapple~~lower net sales ~~volume.~~of fresh-cut fruit due to lower sales volumes.

Gross profit for the first quarter of ~~2023 increased to $47.1~~2024 was $55.9 million, compared with ~~$44.4~~$47.1 million in the prior-year period. ~~Despite lower~~Gross profit variance was primarily driven by overall higher net sales ~~gross profit was positively impacted~~partially offset by higher ~~per unit selling prices for most product categories. The segment continued~~production and procurement costs of pineapple and avocados, including the negative impact of fluctuations in exchange rates primarily due to ~~be negatively impacted by cost pressures of raw materials such as packaging materials~~a stronger Costa Rican colon and ~~fertilizers as well as higher ocean freight costs.~~ Mexican peso.

Gross profit for the first quarter of 2024 included $(1.0) million of other product-related credits comprised primarily of $2.2 million of insurance recoveries associated with damages tied to the flooding of a seasonal production facility in Greece during the third quarter of 2023, partially offset by $1.2 million of severance charges from the outsourcing of certain functions of our fresh and value-added ~~products segment~~operations. In the first quarter of 2023, gross profit included $1.7 million of other product-related charges ~~in the first quarter of 2023, primarily consisting of~~related inventory write-offs ~~in connection with~~due to the sale of two distribution centers in ~~Saudi Arabia. There were no other product-related charges in~~ the ~~first quarter of 2022.~~Middle East. Gross margin increased to ~~7.3%~~8.3% compared with ~~6.6%~~7.3% in the prior-year period.

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Banana

Net sales for the first quarter of ~~2023 increased by $19.1~~2024 were $379.5 million, ~~or 5%, when~~ compared with $425.1 million in the prior-year period, primarily as a result of ~~higher per unit~~lower volume due partially to service level issues in the first two months of the year and lower selling prices ~~in most regions and higher sales volume~~due to competitive market pressures in North America and Europe. ~~Net sales of banana were negatively impacted by fluctuations in exchange rates, primarily in Europe and Asia.~~

Gross profit for the first quarter of ~~2023 increased to $43.2~~2024 was $21.8 million, compared with ~~$37.7~~$43.2 million in the ~~first quarter~~prior-year period as a result of ~~2022. The increase~~the lower net sales, higher per unit production and procurement costs and the negative fluctuation in ~~gross profit was primarily driven by higher net sales,~~exchange rates in Costa Rican colon, partially offset by ~~higher procurement~~lower distribution and ~~production costs, including packaging materials and labor, as well as higher~~ ocean freight cost. ~~As a result of these combined factors, gross~~Gross margin ~~increased~~decreased to ~~10.2%~~5.7% compared with ~~9.3%~~10.2% in the prior-year period.

Other products and services

Net salesfor the first quarter of ~~2023 increased by $1.8~~2024 were $51.6 million, ~~or 3%, when~~ compared with $60.0 million in the prior-year period, ~~mainly~~primarily due to ~~higher~~lower net sales of third-party ocean freight ~~services.~~services as a result of lower rates driven by a competitive market environment and the sale of our plastics subsidiary in the prior-year period.

Gross profit ~~decreased by $1.0~~was $4.6 million for the first quarter of 2024, compared with $6.7 million in the prior-year period, primarily as a result of ~~higher costs.~~lower net sales. Gross margin decreased to 8.9% from 11.2% ~~from 13.1%.~~in the prior-year period.

Liquidity and Capital Resources

Fresh Del Monte Produce Inc. is a holding company whose only significant asset is the outstanding capital stock of our

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subsidiaries that directly or indirectly own all of our assets. We conduct all of our business operations through our subsidiaries. Accordingly, as of March 29, 2024, our ~~only source~~principal sources of liquidity were (i) cash ~~to pay~~generated from operations of our ~~obligations, other than financings, depends primarily on the net earnings~~subsidiaries, (ii) our combined $806 million of credit facilities, including $750 million associated with our recently amended senior unsecured revolving credit facility, with an available capacity of approximately $379 million and (iii) existing cash and cash ~~flow~~equivalents of $42.2 million. The loan commitments under our credit facilities can be used for working capital or other general corporate purposes. On a long-term basis, we will continue to rely on our credit facilities for any long-term funding not provided by cash generated ~~by these~~from operations of our subsidiaries.

Our ~~primary sources of cash flow are net cash provided by operating activities and borrowings under our credit facility. Our primary~~principal uses of ~~net cash flow~~liquidity are paying the costs associated with our operations, paying dividends, and making capital expenditures to increase our productivity and expand our product offerings and geographic reach. We may also, from time to time, prepay outstanding indebtedness on our credit facility, repurchase and retire ordinary shares of our common stock, or make investments in businesses that we believe are complementary to our operations and long-term strategy.

A summary of our cash flows is as follows (U.S. dollars in millions):


		Quarter ended
		March 31, 2023		April 1, 2022
	Quarter ended						Quarter ended
	March 29, 2024					March 29, 2024		March 31, 2023
Summary cash flow information:	Summary cash flow information:
Net cash provided by (used in) operating activities		$	15.5	$	(0.3)
Net cash provided by (used in) investing activities		79.6		(16.6)
Net cash (used in) provided by financing activities		(75.9)		26.7
Net cash provided by operating activities
Net cash provided by operating activities
Net cash provided by operating activities
Net cash provided by investing activities
Net cash used in financing activities
Effect of exchange rate changes on cash	Effect of exchange rate changes on cash	(0.7)		(0.6)
Net increase in cash and cash equivalents	Net increase in cash and cash equivalents	18.5		9.2
Cash and cash equivalents, beginning	Cash and cash equivalents, beginning	17.2		16.1
Cash and cash equivalents, ending	Cash and cash equivalents, ending	$	35.7	$	25.3

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Operating Activities

Net cash provided by operating activities was $18.7 million for the first three months of 2024 compared with $15.5 million for the first ~~quarter~~three months of 2023, ~~compared with net cash used in operating activities of $0.3 million for the first quarter of 2022,~~ an increase of ~~$15.8~~$3.2 million. The increase was primarily attributable to working capital fluctuations, mainly driven by (i) the timing of collections of accounts receivable and (ii) a larger decrease in raw materials and packaging supplies inventory in the current year period due to a strategic increase in levels in the prior year to secure costs and availability. Partially offsetting the increase were lowerhigher levels of accounts payable and accrued expenses ~~primarily~~and lower inventory levels due to optimization efforts around working capital, partially offset by a lower net income during the ~~timing~~first three months of ~~period end payments~~2024 as compared to ~~suppliers.~~the first three months of 2023.

At March ~~31, 2023,~~29, 2024, we had working capital of ~~$642.9~~$634.3 million, compared with ~~$634.4~~$603.7 million at December ~~30, 2022,~~29, 2023, an increase of ~~$8.5~~$30.6 million. The increase in working capital was primarily due to (i) higher levels of accounts receivable ~~and finished goods inventory,~~ mainly driven by seasonal variations, ~~and a~~(ii) higher balance of cash on hand due the timing of asset sales during the first quarter of 2024, and (iii) an increase in assets held for sale. Partially offsetting the increase in working capital was (a) a decrease in growing crop inventory, primarily due to seasonal variations and (b) higher levels of accounts payable and accrued expenses due to the timing of ~~the asset sales during the current quarter. The increase was partially offset by lower levels of assets held for sale and raw materials and packaging supplies inventory.~~payments near period end.

Investing Activities

Net cash provided by investing activities for the first ~~quarter~~three months of ~~2023~~2024 was ~~$79.6~~$3.9 million, compared with net cash ~~used in~~provided by investing activities of ~~$16.6~~$79.6 million for the first ~~quarter~~three months of ~~2022.~~2023. Net cash provided by investing activities for the first ~~quarter~~three months of 2024 primarily consisted of proceeds from the sale of property, plant and equipment of $20.1 million which mainly related to the sale of two facilities in South America and installment payments received from the sale of our plastics business subsidiary in South America during 2023.

Partially offsetting the net cash provided by investing activities for the first three months of 2024 were capital expenditures of $12.7 million which mainly included expenditures related to investments in our operations and production facilities in North America benefiting both our fresh and value-added products and banana segments, including expenditures related to automation and technology initiatives and improvements to our pineapple operations in Kenya. Net cash provided by investing activities for the first three months of 2024 also reflects $3.5 million in investments in unconsolidated companies in the food and nutrition sector that align with our long-term strategy and vision.

Net cash provided by investing activities for the first three months of 2023 primarily consisted of proceeds from the sale of property, plant and equipment of $90.7 million which mainly related to the sales of two distribution centers in Saudi Arabia and an idle production facility in North America. Partially offsetting the net cash provided by investing activities were capital expenditures of $10.0 million which mainly ~~included expenditures~~ related to (i) improvements to our pineapple operations in Central America and Kenya, (ii) investments in our operations and production facilities in North America benefiting both our fresh and value-added products and banana segments, including expenditures related to automation and technology initiatives, and (iii) improvements to our value-added production facilities in Europe and the Middle East.

Net cash used in investing activities for the first quarter of 2022 primarily consisted of capital expenditures of $11.1 million, mainly related to (i) improvements to our operations and production facilities in North America, (ii) improvements to our pineapple operations in Central America and Kenya, and (iii) improvements to and expansion of our banana operations in Central America. Net cash used in investing activities for the first quarter of 2022 also reflected $7.1 million in investments in unconsolidated companies in the food and nutrition sector that align with our long-term strategy and vision.

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Financing Activities

Net cash used in financing activities for the first ~~quarter~~three months of ~~2023~~2024 was ~~$75.9~~$16.0 million, compared with ~~net cash provided by financing activities of $26.7~~$75.9 million for the first ~~quarter~~three months of ~~2022.~~2023. Net cash used in financing activities for the first ~~quarter~~three months of 2024 primarily consisted of dividends paid of $11.9 million and the payment of deferred financing costs of $2.1 million.

Net cash used in financing activities for the first three months of 2023 primarily consisted of net repayments on debt of $67.1 million and dividends paid of $7.2 million.

~~Net cash provided by financing activities for the first quarter of 2022 primarily consisted of net borrowings on debt of $35.0 million, partially offset by dividends paid of $7.2 million.~~

As part of the Mann Packing acquisition in 2018, we acquired a put option exercisable by the 25% shareholder of one of the acquired subsidiaries. The put option allows the noncontrolling shareholder to sell its 25% noncontrolling interest to us for a multiple of the subsidiary's adjusted earnings. Effective April 1, 2023, the noncontrolling shareholder exercised its put option right and accordingly, we expect to close the purchase of the remaining 25% of this subsidiary during the second quarter of 2023 for approximately $5.2 million in cash consideration, which we expect to fund from cash on hand. The transaction will be treated as an equity transaction, with the differential between the redeemable noncontrolling interest carrying amount on our Consolidated Balance Sheet and the cash purchase price being recognized as an increase in shareholders' equity.

Debt Instruments and Debt Service Requirements

On October 1, 2019, we and certain of our subsidiaries entered into a Second Amended and Restated Credit Agreement (the “Second A&R Credit Agreement”) with the financial institutions and other lenders named therein, including Bank of America, N.A. as administrative agent and BofA Securities, Inc. as sole lead arranger and sole bookrunner. The Second A&R Credit Agreement provides for a five-year, $0.9 billion syndicated senior unsecured revolving credit facility ~~(the “Revolving Credit Facility”)~~ maturing on October 1, 2024. ~~Certain of our direct and indirect subsidiaries have guaranteed the obligations under the~~The Second A&R Credit ~~Agreement.~~Agreement was subsequently amended on December 30, 2022, to replace the Eurocurrency Rate with the Term Secured Overnight Financing Rate ("Term SOFR") effective January 3, 2023.

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On February 21, 2024, we entered into Amendment No. 2 to the Second Amended and Restated Credit Agreement (the "2024 Amended Credit Facility") 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 2024 Amended Credit Facility provides for a five-year, $0.75 billion syndicated senior unsecured revolving credit facility maturing on February 21, 2029. Amounts borrowed under the revolving credit facility accrue interest at a rate equal to the Term SOFR rate plus a margin that ranges from 1.0% to 1.625% based on our Consolidated Leverage Ratio (as defined in the 2024 Amended Credit Facility). The 2024 Amended Credit Facility also permits, under certain conditions, $200 million of Permitted Receivables Financing (as defined in the 2024 Amended Credit Facility). In addition, we pay a fee on unused commitments at a rate equal to 0.150% to 0.250% based on our Consolidated Leverage Ratio. We intend to use funds borrowed under the Amended Revolving Credit Facility from time to time for general corporate purposes, working capital, capital expenditures and other permitted investment opportunities.

~~On December 30, 2022, we and certain of our subsidiaries executed Amendment No. 1 to the Second A&R~~The 2024 Amended Credit Agreement (the “Amendment”) with the financial institutions and other lenders named therein, including Bank of America, N.A. as administrative agent and BofA Securities, Inc. as sole lead arranger and sole bookrunner. Pursuant to the Amendment, the reference interest rate on the Revolving Credit Facility was amended to replace the Eurocurrency Rate with the Term Secured Overnight Financing Rate (“Term SOFR”) effective January 3, 2023. As amended, Term Loans made under the Revolving Credit Facility can be Base Rate Loans, Term SOFR Loans or Alternative Currency Term Rate Loans. All other material terms of the Second A&R Credit Agreement, as amended, remain unchanged.

Effective January 3, 2023, amounts borrowed under the Revolving Credit Facility accrue interest, at our election, at either (i) the Term SOFR 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. At March 31, 2023, we had borrowings of $472.7 million outstanding under the Revolving Credit Facility bearing interest at a per annum rate of 6.03%. In addition, we pay an unused commitment fee.

~~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~~2.75 to 1.00. Our ability to request such increases ~~in the Revolving Credit Facility~~ or term loans is subject to ~~its~~our compliance with customary conditions set forth in the ~~Second A&R~~2024 Amended Credit ~~Agreement~~Facility including compliance, on a pro forma basis, with ~~the~~certain financial covenants and ~~ratios set forth therein.~~ratios. 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.

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and indebtedness, material asset sales, and mergers. Under the ~~Second A&R~~2024 Amended Credit ~~Agreement,~~Facility, 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 (1) the greater of (A) 50% of the Consolidated Net Income (as defined in the ~~Second A&R~~2024 Amended Credit ~~Agreement)~~Facility) for the immediately preceding fiscal year or (B) $25 million (the "Base Dividend Basket") plus (2) commencing in the fiscal year ending December 26, 2025 any portion of the Base Dividend Basket not used in the immediately preceding fiscal year, or (ii) the greatest amount which would not cause the Consolidated Leverage Ratio (determined on a pro forma ~~basis)~~basis as of the date of declaration or payment) to exceed ~~3.25~~3.50 to 1.00. It also provides an allowance for stock repurchases to be an amount not exceeding the greater of (i) ~~$150 million~~(A) $50,000,000 (the "Base Redemption Basket") plus (B) commencing in the ~~aggregate~~fiscal year ending December 26, 2025, any portion of the Base Redemption Basket not used in the immediately preceding fiscal year or (ii) the greatest amount ~~that, after giving pro forma effect thereto and any related borrowings, will~~which would not cause the Consolidated Leverage Ratio (determined on a pro forma basis as of the date of such repurchase) to exceed ~~3.25~~3.50 to 1.00. As of March ~~31, 2023,~~29, 2024, we were in compliance with all of the ~~financial and other~~ covenants contained in the ~~Second A&R~~2024 Amended Credit ~~Agreement.~~Facility.

In addition to the indebtedness under our 2024 Amended Credit Facility, our material cash requirements include contractual obligations from other working capital facilities and lease obligations. Refer to Note 8. "Debt and Finance Lease Obligations" of the accompanying unaudited consolidated financial statements for more information regarding these material cash requirements.

As of March ~~31, 2023,~~29, 2024, we had ~~$461.5~~$379.4 million unused borrowing capacity, net of ~~borrowing availability under committed working capital facilities,~~letters of credit and guarantees, primarily under the ~~Revolving~~2024 Amended Credit Facility.

We believe that our cash on hand, borrowing capacity available under our ~~Revolving~~2024 Amended Credit Facility, and cash flows from operations for the next twelve months will be sufficient to meet our cash requirements and service our outstanding debt during the next twelve months. However, we cannot predict whether future developments associated with the current economic environment will materially adversely affect our long-term liquidity position. Our liquidity assumptions, the adequacy of our available funding sources, and our ability to meet our ~~Revolving~~2024 Amended Credit Facility covenants are dependent on many additional factors, including those set forth in “Item 1A. Risk Factors” of our Form 10-K for the year ended December ~~30, 2022.~~29, 2023.

Contractual Obligations

As of March ~~31, 2023,~~29, 2024, there were no material changes in our commitments or contractual obligations as compared to those disclosed in our Annual Report on Form 10-K for the year ended December ~~30, 2022.~~29, 2023.

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Critical Accounting Policies and Estimates

A discussion of our critical accounting policies and estimates can be found in “Management's Discussion and Analysis of Financial Condition and Results of Operations” included in our Form 10-K for the fiscal year ended December ~~30, 2022.~~29, 2023. There were no material changes to these critical accounting policies or estimates during the first quarter of ~~2023.~~2024.

Fair Value Measurements

WeOur results of operations and financial condition are exposed to fluctuations in currency exchange rates against the U.S. dollar, ~~on our results of operations and financial condition,~~ and we mitigate that exposure by entering into foreign currency forward contracts. Certain of our subsidiaries periodically enter into foreign currency forward contracts in order to hedge portions of forecasted sales or cost of sales denominated in foreign currencies which generally expire within one year. During the quarter ended March 29, 2024, we entered into a foreign currency collar contract to hedge portions of our cost of sales denominated in the Kenyan shilling. A foreign currency collar consists of a written call option and a purchased put option to sell the foreign currency at a range of predetermined exchange rates. A foreign currency collar guarantees that the exchange rate of the currency will not fluctuate beyond the range of the options’ strike prices. The fair value of our foreign currency cash flow hedges was a net ~~liability~~asset position of ~~$3.0~~$1.2 million as of March ~~31, 2023~~29, 2024 compared to a net liability position of ~~$6.7~~$0.3 million as of December ~~30, 2022~~29, 2023 due to the relative strengthening or weakening of exchange rates when compared to contracted rates.

WeOur results of operations and financial condition are exposed to fluctuations in variable interest rates, ~~on our results of operations and financial condition,~~ and we mitigate that exposure by entering into interest rate swaps from time to time. During 2018, we entered into interest rate swaps in order to hedge the risk of the fluctuation on future interest payments related to a portion of our variable rate borrowings through 2028. The fair value of our interest rate swap cash flow hedges was an asset position of ~~$9.3~~$9.9 million as of March ~~31, 2023~~29, 2024 compared to an asset position of ~~$15.8~~$7.9 million as of December ~~30, 2022.~~29, 2023. The change in value was due to the relative ~~decrease~~increase in variable interest rates when compared to the rates as of December ~~30, 2022.~~29, 2023. In December 2022 in connection with the ~~Amendment~~amendment of our ~~Revolving Credit Facility,~~revolving credit facility, we amended our interest rate swaps to transition from LIBOR to Term SOFR effective January 3, 2023.

We enter into derivative instruments with counterparties that are highly rated and do not expect a deterioration of our counterparty’s credit ratings; however, the deterioration of our counterparty’s credit ratings would affect the Consolidated Financial Statements in the recognition of the fair value of the hedges that would be transferred to earnings as the contracts settle. We expect that ~~$4.5~~$5.2 million of the net fair value of our cash flow hedges recognized as a net gain in accumulated other comprehensive loss will be transferred to earnings during the next 12 months and the remaining net gain of ~~$2.2~~$4.9 million over a period of approximately 5 years, along with the earnings effect of the related forecasted transactions.

The fair value of the banana reporting unit's goodwill and the prepared food reporting unit's goodwill and remaining trade names and trademarks are highly sensitive to differences between estimated and actual cash flows and changes in the related discount rate used to evaluate the fair value of these assets. We disclosed the sensitivity related to the banana reporting unit's goodwill and the prepared food reporting unit's goodwill and trade names and trademarks in our Annual Report on Form 10-K

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for the year ended December ~~30, 2022.~~29, 2023. During the quarter ended March ~~31, 2023,~~29, 2024, we did not record impairment charges associated with these reporting units or trade names and trademarks, however we continue to monitor their performance.

Potential impairment exists if the fair value of a reporting unit to which goodwill has been allocated is less than the carrying value of the reporting unit. Future changes in the estimates used to conduct our impairment review, including our financial projections and changes in the discount rates used, could cause the analysis to indicate that our goodwill or trade names and trademarks are impaired in subsequent periods and result in a write-off of a portion or all of goodwill or trade names and trademarks.

In addition, certain definite-lived intangible assets related to our fresh and value-added products segment are sensitive to changes in estimated cash flows. To the extent that future developments result in cash flows that are less than currently estimated levels, it could lead to impairment of these assets.

New Accounting Pronouncements

Refer to Note 2. “Recently Issued Accounting Pronouncements” toof the accompanying unaudited consolidated financial statements for a discussion of recent accounting pronouncements.

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Seasonality

Interim results are subject to significant variations and may not be indicative of the results of operations that may be expected for an entire fiscal year. Due to seasonal sales price fluctuations, we have historically realized a greater portion of our net sales and gross profit during the first two ~~calendar~~ quarters of the year. The sales price of any fresh produce item fluctuates throughout the year due to the supply of and demand for that particular item, as well as the pricing and availability of other fresh produce items, many of which are seasonal in nature. ~~See~~Information about the ~~information~~seasonality of our results is included under the caption “Seasonality” provided in Item 1. Business,, of our Annual Report on Form 10-K for the year ended December ~~30, 2022.~~29, 2023.

Forward-Looking Statements

This quarterly report contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements concern expectations, beliefs, projections, plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. Specifically, this quarterly report contains forward-looking statements regarding:

•our expectations regarding future financial and operational performance;

•our intentions regarding the use of borrowed funds;

•our expectation regarding the exploration of strategic alternatives for our Mann Packing business

•our expectations regarding continued inflationary pressures, our ability to mitigate such pressures through pricing, and the impacts to our operating results;

•our expectations regarding market conditions, volatility and ~~volatility,~~seasonality, and their impact on our operating results;

•our beliefs related to the sufficiency of our capital resources, including that our cash on hand, capacity under our ~~Revolving~~2024 Amended Credit Facility and cash flows from operations for the next twelve months will be sufficient to service our outstanding debt during the next twelve months;

•our expectations regarding our derivative instruments, including our counterparties’ credit ratings and the anticipated impacts on our financials;

•our expectations ~~on the impact of the cybersecurity incident on our operating results and the recovery of certain expenses incurred in connection therewith;~~

•~~our expectations~~ and estimates regarding certain legal, tax and accounting matters, including our litigation strategy, plans and beliefs regarding the ultimate outcome of income tax adjustments assessed by foreign taxing authorities;

•~~our belief that certain proposed adjustments by taxing authorities are without merit, our ability to contest the adjustments and our plans to contest such adjustments;~~

•our expectations concerning the fair value of hedges, including the timing and impact to our results;

•our expectations regarding estimated liabilities related to environmental cleanup; and

•our plans and future performance.

These forward-looking statements reflect our current views about future events and are subject to risks, uncertainties and assumptions. We wish to caution readers that certain important factors may have affected and could in the future affect our actual results and could cause actual results to differ significantly from those expressed in any forward-looking statement. These various factors include, but are not limited to, the following:

•

the impact of inflationary pressures on raw materials and other costs;

•the impact of ~~inflation on~~increased costs for many of our ~~operations;~~products, including bananas, pineapples, avocados and other fresh produce;

•the impact of pricing and other actions by competitors, particularly during periods of low consumer confidence and spending levels;

•our ability to successfully ~~execute~~compete in the markets in which we do business;

•the impact on our ~~long-term strategy;~~business of the consolidation of retailers, wholesalers and distributors in the food industry;

•the impact of ~~governmental trade restrictions, including adverse governmental regulation that may impact~~foreign currency fluctuations and currency exchange risks because of our ~~ability to access certain markets;~~international business;

•the ~~ability to meet~~impact on our ~~anticipated cash needs;~~sales and profits if we lose one or more of our largest customers or such customers reduce their purchases from us;

•the availability of sufficient labor during peak growing and harvesting seasons;

•the continued ability of our distributors and suppliers to have access to sufficient liquidity to fund their operations;

•the impact of ~~disruptions or breaches of~~governmental trade restrictions, including adverse governmental regulation that may impact our ~~technology or information system security measures, or of third parties we rely upon;~~ability to access certain markets;

•~~the impact~~our ability to meet our anticipated cash needs in light of ~~product and raw material supply and pricing, as well as prices for petroleum-based products and packaging materials;~~

•~~the impact of pricing and other actions by~~ our ~~competitors, particularly during periods of low consumer confidence and spending levels;~~liquidity;

•trends and other factors affecting our financial condition or results of operations from period to period, including changes in product mix, consumer preferences or consumer demand for branded products such as ours; anticipated price and expense levels;

•the impact of crop disease, such as vascular diseases, one of which is known as Tropical Race 4, or TR4 (also known as Panama Disease);

•our ability to improve our existing quarantine policies and other prevention strategies, as well as find contingency plans, to protect our and our suppliers’ banana crops from vascular diseases;

•~~competitive pressures and our ability to realize the full benefits of the inflation driven price increases implemented;~~

•global or local disruptions or issues that impact our production facilities or complex logistics ~~networks;~~network;

•~~the availability of sufficient labor during peak growing and harvesting seasons;~~

•~~the impact of foreign currency fluctuations, including the effectiveness of~~ our ~~hedging activities;~~

•inability to realize expected benefits on plans for expansion of our business (including through acquisitions);

•our ability to successfully integrate acquisitions and new product lines into our operations;

•the impact of impairment or other charges associated with exit activities, crop or facility damage or otherwise,

•the timing and cost of resolution of pending and future legal and environmental proceedings or investigation;

•the impact of changes in tax accounting or tax laws (or interpretations thereof), the impact of claims or adjustments proposed by the Internal Revenue Service or other ~~foreign~~ taxing authorities, including the EU, in connection with our ~~current or future~~ tax audits and our ability to successfully contest such tax claims and pursue necessary remedies;

•the success of our joint ventures;

•the impact of severe weather conditions and natural disasters, such as flooding and earthquakes, on crop quality and yields and on our ability to grow, procure or export our products;

•the adequacy of our insurance coverage;

•the cost and other implications of changes in regulations applicable to our business, including potential legislative or regulatory initiatives in the United States or elsewhere directed at mitigating the effects of climate change;

•damage to our reputation or brand names or negative publicity about our ~~products;~~products

•~~exposure~~our ability to ~~product liability claims and~~successfully manage the risks associated ~~regulatory and legal actions, product recalls, or other legal proceedings~~with international operations, including risks relating to inflation, tax laws, currency restrictions and exchange rate fluctuations, legal or judicial systems, and political or economic conditions;

•the impact of disruptions or breaches of our ~~business;~~technology or information system security measures, or of third parties we rely upon;

•our ability to continue to comply with covenants and the terms of our credit instruments and our ability to obtain additional financing to fund our capital expenditures; and

•~~our ability~~exposure to ~~successfully manage the risks~~product liability claims and associated ~~with international operations, including risks~~regulatory and legal actions, product recalls, or other legal proceedings relating to ~~political or economic conditions, inflation, tax laws, currency restrictions and exchange rate fluctuations, legal or judicial systems.~~our business.

All forward-looking statements in this report are based on information available to us on the date hereof, and we assume no obligation to update any such forward-looking statements. Our plans and performance may also be affected by the factors described in our most recent Annual Report on Form 10-K along with other reports that we file with the Securities and Exchange Commission.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes in market risk from the information provided in Item 7A. Quantitative and Qualitative Disclosures About Market Risk of our Annual Report on Form 10-K for the year ended December ~~30, 2022.~~29, 2023.

Item 4. Controls and Procedures

We carried out an evaluation, under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of March ~~31, 2023.~~29, 2024. Based upon this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of such date to ensure that information required to be disclosed in the reports we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms. Such officers also confirm that there were no changes to our internal control over financial reporting during the quarter ended March ~~31, 2023~~29, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Tax related matters

Legal Settlement

Subsequent to March 29, 2024, we entered into a settlement agreement with respect to a litigation matter by a former employee regarding a legacy claim stemming from the 1970s. This matter was in the discovery phase until the first quarter of 2024, when the court set the expected trial date and the parties began to discuss settlement. During the quarter ended March 29, 2024, we recognized a $1.8 million charge, net of insurance reimbursements, with respect to this matter.

California Air Resource Board

For more information, see Note 9. "Commitments and Contingencies" to the Consolidated Financial Statements included in Part I, Item 1. Financial Statements.

Item 1A. Risk Factors

“Item 1A. Risk Factors” of our Form 10-K for the year ended December 29, 2023 includes a discussion of our risk factors. The information presented below updates, and should be read in conjunction with, the risk factors and information disclosed in our Form 10-K.

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Our strategy of diversifying our product lines, expanding into new geographic markets and increasing the value-added services that we provide to our customers may not be successful.

We are diversifying our product lines through expansion of our service offerings to include a higher proportion of value-added products and services, such as the preparation of fresh-cut produce, ripening, customized sorting and packing, direct-to-store delivery and in-store merchandising and promotional support. For instance, in January 2024, we announced the offering of our Rubyglow® pineapple, a red-shelled pineapple, which is first being launched in China.

In addition, we have made significant investments in distribution centers, growing operations and prepared foods facilities through capital expenditures, and have expanded our business into new geographic markets. We are also exploring opportunities to monetize our fruit residues, including exploring the use of fruit residue for medical and non-medical applications and biofertilizer. There may not be significant demand for these products and services, we may not be successful in anticipating such demand for these value-added products and services or in establishing the requisite infrastructure to meet customer demand or the provision of these value-added services. If we are unable to successfully develop and integrate the diversified product lines in our fresh-cut and value-added vegetable categories or use of fruit residues or if demand for these products does not meet expectations, we may not realize all the anticipated synergies and benefits of our investments which could have an adverse effect on our growth and our results of operations.

Item 5. Other Information

Rule 10b5-1 Trading Plans

During the quarter ended March 29, 2024, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

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Item 6. Exhibits


4.2**10.1			~~Description~~Amendment No. 2 to Second Amended and Restated Credit Agreement, dated as of ~~Securities~~February 20, 2024, by and among Fresh Del Monte Produce Inc., and certain subsidiaries named therein and the lenders and agents named therein (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the SEC on February 26, 2024).

31.1**			Certification of Chief Executive Officer filed pursuant to 17 CFR 240.13a-14(a).

31.2**			Certification of Chief Financial Officer filed pursuant to 17 CFR 240.13a-14(a).

32*			Certification of Chief Executive Officer and Chief Financial Officer furnished pursuant to 17 CFR 240.13a-14(b) and 18 U.S.C. Section 1350.







101.INS***			Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH***			Inline XBRL Taxonomy Extension Schema Document.

101.CAL***			Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF***			Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB***			Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE***			Inline XBRL Taxonomy Extension Presentation Linkbase Document.

104			Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

_____________________

* Furnished herewith.

** Filed herewith.

*** Attached as Exhibit 101 to this report are the following formatted in Inline XBRL (Extensible Business Reporting Language): (i) Consolidated Balance Sheets as of March ~~31, 2023~~29, 2024 and December ~~30, 2022,~~29, 2023, (ii) Consolidated Statements of Operations for the quarters ended March 29, 2024 and March 31, 2023, ~~and April 1, 2022,~~ (iii) Consolidated Statements of Comprehensive Income for the quarters ended March 29, 2024 and March 31, 2023, ~~and April 1, 2022,~~ (iv) Consolidated Statements of Cash Flows for the quarters ended March 29, 2024 and March 31, 2023, ~~and April 1, 2022,~~ (v) Consolidated Statements of Shareholders' Equity and Redeemable Noncontrolling Interest for the quarters ended March 29, 2024 and March 31, 2023 ~~and April 1, 2022~~ and (vi) Notes to Consolidated Financial Statements.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


		Fresh Del Monte Produce Inc.

Date:	May 3, ~~2023~~2024	By:	/s/ Mohammed Abbas
			Mohammed Abbas
			Executive Vice President & Chief Operating Officer

		By:	/s/ Monica Vicente
			Monica Vicente
			Senior Vice President & Chief Financial Officer

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	March 31, 2023				December 30, 2022
	Current		Past-Due		Current		Past-Due
Gross advances to growers and suppliers	$	32.5	$	9.6	$	44.6	$	5.6