Chiquita Brands Reports Second Quarter 2010 Results

By Chiquita Brands International Inc., PRNE
Wednesday, July 28, 2010

Comparable income of US$64 million or US$1.40 per diluted share; U.S. GAAP US$95 million or US$2.06 per diluted share

CINCINNATI, July 29, 2010 - Chiquita Brands International, Inc. (NYSE: CQB) today released financial
and operating results for the second quarter 2010. All figures in this press
release are for continuing operations, unless otherwise noted.

For the second quarter 2010, on a comparable basis, the company reported
income from continuing operations of US$64 million, or US$1.40 per diluted
share, versus income of US$95 million, or US$2.08 per diluted share, in 2009.
On a GAAP basis, the company reported income from continuing operations of
US$95 million, or US$2.06 per diluted share, which includes a gain of US$32
million
on the sale of 51 percent of Just Fruit in a Bottle, versus income of
US$89 million, or US$1.95 per diluted share, in 2009. Net sales were US$916
million
, 4 percent lower than the prior year period. The comparable basis
amounts exclude certain items described below under "Items affecting
comparability."

"As we expected, we regained profitability in Europe during the second
quarter following the unusual weakness of the first quarter," said Fernando
Aguirre
, chairman and chief executive officer. "Revitalizing Europe is our
most important priority and we made solid progress executing a business
improvement plan that includes improving pricing, capturing significant cost
improvements and increasing distribution, as we leverage the strengths of our
branded business. Meanwhile, we are reaping the rewards of having a
diversified portfolio as our North American salad and banana businesses in
the second quarter delivered the same profit level as last year, excluding
our increased consumer marketing investment."

Aguirre added, "We believe our diversification and profitable growth
strategy will result in strong profitability for the full year. However, as
we previously noted, a sustained, significant reduction in European exchange
rates was not factored into our prior expectations. We are now adjusting our
full-year comparable income estimate to US$80 to US$90 million, assuming
these rates remain at lower levels than earlier this year. Even at the lower
income estimate, 2010 will be one of our most profitable years in the last
decade, despite the weak economic environment."

2010 SECOND QUARTER SUMMARY

(The following table shows adjustments made to "Income (loss) from
continuing operations" and EPS from continuing operations between comparable
and GAAP results. See "Items affecting comparability" below for descriptions
of items excluded on a comparable basis, including descriptions of how these
items affect the results of reportable segments.)

    (All amounts in U.S. dollars unless otherwise noted.)

    (in millions, except per share amounts)  Income (loss)  Income (loss) per
                                                            diluted share (1)
                                             2010    2009     2010    2009
                                             ----    ----     ----    ----

    Comparable results (Non-GAAP)             $64     $95    $1.40   $2.08
      European headquarters relocation          -      (4)       -   (0.09)
      Incremental non-cash interest expense
       on Convertible Notes                    (2)     (2)  (0.04)   (0.04)
      Gain on sale of Just Fruit in a Bottle   32       -     0.71       -
    Reported results (GAAP)                   $95     $89    $2.06   $1.95
                                              ===     ===    =====   =====

    Columns may not total due to rounding.

    (1)  Shares used for diluted EPS calculation are on an as-reported basis.

Net Sales and Comparable Results: Quarterly sales decreased 4 percent
year-over-year to $916 million due to lower volume of retail value-added
salads in North America and lower banana pricing in the company's core
European markets. The company had comparable income of $64 million for the
second quarter 2010 compared to $95 million in the year-ago period as a
result of increased banana sourcing and fuel costs, lower banana pricing in
the core European markets and increased consumer marketing investments in
North America.

Cash, Debt and Liquidity: At June 30, 2010, cash and equivalents were
$139 million and debt had decreased to $639 million. The company received $18
million
in April from the sale of the company's investment in Coast Citrus
Distributors and an additional $18 million in May from the sale of a 51
percent interest in its Just Fruit in a Bottle business to Danone.

Banana Segment: Net sales for the segment decreased 2 percent to $547
million
, principally as a result of lower pricing and volume in core European
markets. Comparable operating income declined to $64 million, compared to $96
million
in 2009, due to increased sourcing and fuel costs and in core
European markets, lower average local pricing versus the record levels
experienced during the prior year. In Europe, volume comparisons improved as
the quarter progressed as demand returned to more normal levels. The company
recognized a $12 million receivable and corresponding cost reduction in the
second quarter 2010 related to the implementation of the EU tariff rate
reduction, which became effective on June 9, 2010 and is retroactive to
December 15, 2009. In North America, the company sustained similar profit
margins as in 2009, before increased consumer marketing investments, on
stronger prices and volume.

Salads and Healthy Snacks Segment: Net sales decreased 6 percent to $288
million
, due to lower volumes in retail value-added salads. Comparable
operating income remained flat at $30 million, as the company benefited from
$7 million of lower costs, primarily from improved network efficiencies,
offsetting lower volume as a result of retailer conversions to private label
products at the beginning of the year. In addition, the company invested $4
million
more in consumer marketing than in the-year-ago period.

2010 OUTLOOK

Despite a slow first half, particularly in Europe, the company continues
to expect to deliver strong profitability for the full-year 2010, with a
full-year comparable income target of $80 to $90 million. For the full-year
2010, the company expects revenues to be down slightly. These expectations
assume a sustained reduction in European exchange rates, which since late
June have averaged 13 percent below second half 2009 levels. As previously
noted, the company also expects that the quarterly flow of earnings will
differ from 2009, as second half results are expected to be more favorable in
comparison to the 2009 period, particularly in the fourth quarter.

Industry supplies in Latin America have tightened, helping to restore the
balance of supply and demand in the market. In Europe, the company has made
and expects to continue making progress in implementing its business
improvement plan to improve pricing, execute significant cost improvements
and increase distribution. Included in these expected costs reductions are
significantly lower surplus fruit costs resulting from the restructuring of
purchased fruit contracts and lower European tariff cost, which will mitigate
the expected increase in fuel and purchased fruit costs versus 2009.
Additionally, the Just Fruit in a Bottle joint venture with Danone will
improve reported results in the second half of the year.

In North America, the company expects continued strong performance in
bananas and has executed sustainable cost reductions, such as improved
network and manufacturing efficiencies, in salads. The company expects to
improve its full-year 2010 value-added salad operating margin to
approximately 8 percent, even with the increased investment in consumer
marketing and innovation which is expected to strengthen its long-term
competitive position by extending consumer loyalty and preference for its
branded products. The company is also focused on opportunities to increase
long-term profitable retail salad volumes to offset lower year-on-year retail
salad volumes in 2010.

The company's expectations of comparable results exclude any unforeseen
weather or event risks; further major currency fluctuations; the $32 million
gain on the deconsolidation and sale of 51 percent of Just Fruit in a Bottle;
and $8 million of non-cash interest expense on the Convertible Notes, all of
which will be reported in the company's U.S. GAAP results.

The following chart summarizes the quarterly results and management's
estimates of certain key items for 2010:

    (in millions)                    Q1 2010       Q2 2010          FY 2010
                                      Actual        Actual         Estimate

    Capital Expenditures                  $7            $9           $70-80
    Depreciation & Amortization          $14           $15           $60-63
    Gross Interest Expense (1)           $14           $14           $55-57
    Net Interest Expense (1)             $13           $13           $48-51

    (1)  Interest expense includes the impact of adoption in 2009 of an
    accounting standard that changed the method used to account for the
    company's Convertible Notes, which adds non-cash interest expense
    of $7 million for the full year 2009 and will be $8 million for the
    full year 2010.

Conference Call

Chiquita will hold a conference call for investors to discuss its results
at 4:30 p.m. EDT today. Access to a live audio web cast is available at
www.chiquitabrands.com and a replay will be available until August 12.
Toll-free telephone access will be available by dialing 1-888-359-3610 in the
United States
and +1-719-457-2629 from international locations and providing
the conference code 8410160. To access the telephone replay, dial
1-888-203-1112 from the United States and +1-719-457-0820 from international
locations and enter the confirmation code 8410160.

NON-GAAP MEASUREMENTS

The company reports its financial results in accordance with generally
accepted accounting principles in the United States of America (U.S. GAAP).
In an effort to provide investors with additional information regarding the
company's results and to provide more meaningful year-over-year comparisons
of the company's financial performance, as well as the measures that
management uses to evaluate the company's performance against internal
budgets and targets, the company reports certain non-GAAP measures as defined
by the Securities and Exchange Commission. The differences between the U.S.
GAAP and non-GAAP financial measures are described below in "Items affecting
comparability." Non-GAAP financial measures should be considered in addition
to, and not instead of, U.S. GAAP financial measures, and may differ from
non-GAAP measures that other companies use.

ITEMS AFFECTING COMPARABILITY

    Second Quarter 2010 & 2009 Items

    - European Headquarters Relocation: In the fourth quarter of 2008, the
      company committed to relocate its European headquarters in order to
      optimize its long-term tax structure. The relocation resulted in
      one-time costs of approximately $19 million; $12 million was recognized
      in 2009, including $4 million recorded in the second quarter.
      Restructuring related costs are included in reportable figures as a
      component of operating income, but are not allocated to the reportable
      segments.

    - Incremental non-cash interest expense on Convertible Notes: In 2009,
      the company retrospectively adopted a new accounting standard related
      to its convertible debt instruments, which increases the amount of
      reported GAAP interest expense on its $200 million of 4.25% Convertible
      Senior Notes. In determining earnings on a comparable basis the company
      excludes the additional non-cash interest expense that results from the
      application of the standard. Such higher non-cash interest expense was
      $2 million for both quarters ended June 30, 2010 and 2009,
      respectively, was $7 million for the full year 2009, and will be $8
      million for the full year 2010.

    - Gain on Deconsolidation and Sale of Just Fruit in a Bottle: As
      previously disclosed, the company entered into a joint venture with
      Danone S.A. to market fruit beverages based on Chiquita's Just Fruit in
      a Bottle(R) platform in Europe. Upon closing in May 2010, the company
      sold 51 percent of its Just Fruit in a Bottle business to Danone for
      euro 15.0 million ($18 million) and deconsolidated Just Fruit in a
      Bottle, accounting for its remaining 49 percent investment using the
      equity method. The gain on the sale and deconsolidation of Just Fruit
      in a Bottle was $32 million, which includes a $15 million gain related
      to fair value remeasurement of the retained 49 percent investment in
      Just Fruit in a Bottle on the closing date.

About Chiquita Brands International, Inc.

Chiquita Brands International, Inc. (NYSE: CQB) is a leading
international marketer and distributor of high-quality fresh and value-added
food products - from energy-rich bananas and other fruits to nutritious
blends of convenient green salads. The company markets its healthy, fresh
products under the Chiquita(R) and Fresh Express(R) premium brands and other
related trademarks. With annual revenues of $3.5 billion, Chiquita employs
approximately 21,000 people and has operations in nearly 80 countries
worldwide. For more information, please visit our corporate web site at
www.chiquitabrands.com.

Forward-looking Statements

This press release contains certain statements, including in the "2010
Outlook" section, that are "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. These statements are
subject to a number of assumptions, risks and uncertainties, many of which
are beyond the control of Chiquita, including: the customary risks
experienced by global food companies, such as prices for commodity and other
inputs, currency exchange rate fluctuations, industry and competitive
conditions (all of which may be more unpredictable in light of continuing
uncertainty in the global economic environment), government regulations, food
safety issues and product recalls affecting the company or the industry,
labor relations, taxes, political instability and terrorism; unusual weather
events, conditions or crop risks; access to and cost of financing; and the
outcome of pending litigation and governmental investigations involving the
company, as well as the legal fees and other costs incurred in connection
with such items.

Any forward-looking statements made in this press release speak as of the
date made and are not guarantees of future performance. Actual results or
developments may differ materially from the expectations expressed or implied
in the forward-looking statements, and the company undertakes no obligation
to update any such statements. Additional information on factors that could
influence Chiquita's financial results is included in its SEC filings,
including its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and
Current Reports on Form 8-K.

    Exhibit A:
                          CHIQUITA BRANDS INTERNATIONAL, INC.
                     CONSOLIDATED INCOME STATEMENT - SECOND QUARTER
                  (Unaudited - in millions, except per share amounts)

                                   Quarter Ended       Six Months Ended
                                      June 30,             June 30,
                                ----------------      -----------------
                                2010        2009      2010         2009
                                ----        ----      ----         ----
    Net sales                   $916        $952    $1,725       $1,794
                                ----        ----    ------       ------
    Operating expenses:
      Cost of sales              738         746     1,444        1,456
      Selling, general and
       administrative             91          88       171          171
      Depreciation                12          13        24           26
      Amortization                 3           3         5            5
      Equity in earnings of
       investees                  (2)        (10)       (2)         (16)
      Deconsolidation and sale
       of Just Fruit in a
       Bottle                    (32)          -       (32)           -
      European headquarters
       relocation                  -           4         -            9
                                 ---         ---
                                 810         843     1,610        1,651
                                 ---         ---     -----        -----
    Operating income             107         109       114          142
    Interest income                1           1         3            2
    Interest expense             (14)        (16)      (29)         (32)
    Other income (1)               3           -         3            -
                                 ---         ---
    Income from continuing
     operations before taxes      97          94        92          113
    Income tax expense (1, 2)     (3)         (5)       (3)          (1)
                                 ---         ---       ---          ---
    Income from continuing
     operations                   95          89        89          112
    Loss from discontinued
     Operations (3)                -           -        (3)           -
                                 ---         ---       ---          ---
    Net income                   $95         $89       $85         $112
                                 ===         ===       ===         ====
    Basic earnings per share:
       Continuing operations   $2.11       $2.00     $1.97        $2.52
       Discontinued operations     -           -     (0.07)           -
                                 ---         ---     -----          ---
                               $2.11       $2.00     $1.90        $2.52
                               =====       =====     =====        =====
    Diluted earnings per
     share:
       Continuing operations   $2.06       $1.95     $1.95        $2.46
       Discontinued operations     -           -     (0.07)           -
                                 ---         ---     -----          ---
                               $2.06       $1.95     $1.88        $2.46
                               =====       =====     =====        =====
    Shares used to calculate
     basic earnings per share   44.9        44.5      44.9         44.5
    Shares used to calculate
     diluted earnings per
     share                      45.9        45.5      45.4         45.5

    Columns may not total due to rounding.

    (1)  Other income relates to the resolution of a claim related to a
    non-income tax refund. An offsetting $1 million of related expense
    is included in "Income tax expense."

    (2)  "Income tax expense" includes $1 million of benefits in both the
    second quarters of 2010 and 2009, due to the resolution of tax
    contingencies in various jurisdictions.  "Income tax expense"
    includes $2 million and $8 million of benefits for the six months
    ended June 30, 2010 and 2009, respectively.  The benefits in 2010
    relate to a release of a foreign valuation allowance; in 2009, $4
    million of benefits were from the sale of the company's operations
    in the Ivory Coast.  Both years included resolution of tax
    contingencies in various jurisdictions.

    (3)  Loss from discontinued operations relates to potential
    indemnification obligations for tax liabilities of Atlanta AG.
    Exhibit B:

                             CHIQUITA BRANDS INTERNATIONAL, INC.
                            OPERATING STATISTICS - SECOND QUARTER
                    (Unaudited - in millions, except for percentages and
                                       exchange rates)

                                                          Percent
                                            Quarter        Change
                                             Ended        Increase
                                           June 30,      (Decrease)
                                         2010    2009     vs. 2009
                                         ----    ----     --------

    Net sales by segment
      Bananas                            $547    $557       (1.8)%
      Salads and Healthy Snacks           288     305       (5.6)%
      Other Produce                        82      90       (9.4)%
                                          ---     ---       -----
        Total net sales                  $916    $952       (3.7)%
    Comparable segment operating
     income (loss) (1)
      Bananas                             $64     $96      (33.4)%
      Salads and Healthy Snacks            30      30       (0.1)%
      Other Produce                         1       5      (72.2)%
      Corporate                           (21)    (18)       16.6%
                                          ---     ---        ----
         Total operating income           $74    $113      (34.2)%
    Comparable operating margin by
     segment
      Bananas                            11.7%   17.2%      (5.5) pts
      Salads and Healthy Snacks (2)      10.3%    9.7%       0.6 pts
      Other Produce                       1.7%    5.6%      (3.9) pts
    SG&A as a percent of sales            9.9%    9.3%       0.6 pts
    Company banana sales volume (40
     lb. boxes)
      North America                      16.6    16.1        3.1%
      Europe & Middle East
         Core European markets (3)       11.2    11.8       (5.1)%
         Mediterranean & Middle East      4.9     4.8        2.1%
    Banana Pricing
      North America                                          6.3%
      Core European markets (3)
           U.S. Dollar                                     (11.4)%
           Local                                            (6.6)%
      Mediterranean & Middle East                           (4.3)%
    Fresh Express-branded retail
     value-added salads
      Volume (12-count cases)            15.1    17.1      (11.7)%
      Pricing (4)                                            0.7%

    Euro average exchange rate, spot
     (dollars per euro)                 $1.28   $1.35       (5.2)%

    Euro average exchange rate,
     hedged (dollars per euro)          $1.33   $1.34       (0.7)%

                                                           Percent
                                       Six Months ended     Change
                                           June 30,        Increase
                                                          (Decrease)
                                       2010       2009     vs. 2009
                                       ----       ----     --------

    Net sales by segment
      Bananas                        $1,023     $1,042       (1.8)%
      Salads and Healthy Snacks         547        586       (6.8)%
      Other Produce                     155        166       (6.5)%
                                        ---        ---       -----
        Total net sales              $1,725     $1,794       (3.8)%
    Comparable segment operating
     income (loss) (1)
      Bananas                           $68       $136      (50.0)%
      Salads and Healthy Snacks          50         43       16.3 %
      Other Produce                       3          7      (54.9)%
      Corporate                         (39)       (38)       2.6 %
                                        ---        ---        ----
         Total operating income         $82       $148      (44.7)%
    Comparable operating margin by
     segment
      Bananas                           6.6%      13.4%      (6.8) pts
      Salads and Healthy Snacks (2)     9.1%       7.3%       1.8 pts
      Other Produce                     2.1%       4.4%      (2.3) pts
    SG&A as a percent of sales          9.9%       9.6%       0.3 pts
    Company banana sales volume (40
     lb. boxes)
      North America                    31.5       31.2        1.0%
      Europe & Middle East
         Core European markets (3)     21.5       23.6       (8.9)%
         Mediterranean & Middle East    9.9        8.1       22.2%
    Banana Pricing
      North America                                           5.2%
      Core European markets (3)
           U.S. Dollar                                       (8.6)%
           Local                                             (8.4)%
      Mediterranean & Middle East                            (8.5)%
    Fresh Express-branded retail
     value-added salads
      Volume (12-count cases)          29.4       33.2      (11.4)%
      Pricing (4)                                             0.5%

    Euro average exchange rate, spot
     (dollars per euro)               $1.34      $1.33        0.8%

    Euro average exchange rate,
     hedged (dollars per euro)        $1.37      $1.35        1.5%

    Columns may not total due to rounding.

    (1)  See detailed description of reconciling items between GAAP and
    comparable basis figures in the text of this press release under the
    heading titled "Items affecting comparability."

    (2)  Excluding $7 million and $8 million of sales of Just Fruit in a
    Bottle in the second quarters of 2010 and 2009, respectively, and
    operating losses of $1 million and $6 million in these periods,
    segment operating margin in the second quarters of 2010 and 2009 was
    10.9 percent and 11.9 percent, respectively. Excluding $13 million
    and $14 million of sales of Just Fruit in a Bottle for YTD, 2010 and
    2009, respectively, and operating losses of $3 million and $9
    million in these periods, operating margin YTD 2010 and 2009 was 9.9
    percent and 9.0 percent, respectively.

    (3)  The company's core European markets include the 27 member states
    of the European Union, Switzerland, Norway and Iceland.

    (4)  Pricing is for Fresh Express-branded products only, and
    includes fuel surcharges.
    Exhibit C:

                                 EUROPEAN CURRENCY
                  YEAR-OVER-YEAR CHANGE - FAVORABLE (UNFAVORABLE)
                                   2010 vs. 2009
                             (Unaudited - in millions)

    Currency Impact (Euro/Dollar)      Q2   YTD
                                      ---   ---
      Revenue                        $(12)  $(0)
      Local Costs                       2    (2)
      Hedging (1)                      10     5
      Balance sheet translation (2)    (2)   (5)
                                      ---   ---

    Net European currency impact      $(3)  $(2)
                                      ===   ===

    Columns may not total due to rounding.

    (1)  Hedging benefits were $8 million in the second quarter of 2010
    and $2 million of costs in second quarter of 2009.
    Hedging benefits for YTD 2010 were $9 million compared to $4 million
    for YTD 2009.

    (2)  Balance sheet translation for the second quarter of 2010 was a
    loss of $2 million compared to a loss of less than
    $1 million in the second quarter of 2009.  Balance sheet translation
    for YTD 2010 was a loss of $7 million compared
    to a loss of $1 million for YTD 2009.

Ed Loyd, Chiquita Brands International, Inc., +1-513-784-8935, eloyd at chiquita.com

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