Variable Interest Entities

3 Months Ended

Apr. 01, 2016

Variable Interest Entities [Abstract]

Variable Interest Entities

Variable Interest Entities

One of our Del Monte Gold^®Extra Sweet pineapple producers meets the definition of a Variable Interest Entity ("VIE") pursuant to the ASC guidance on “Consolidation” and is consolidated. Our variable interest in this entity includes an equity investment and certain debt guarantees. All of this VIE's pineapple production is sold to us. Based on the criteria of this ASC, as amended, we are the primary beneficiary of this VIE’s expected residual returns or losses in excess of our ownership interest. Although we are the primary beneficiary, the VIE’s creditors do not have recourse against us. At April 1, 2016, the VIE had total assets of $36.3 million and total liabilities of $5.3 million. The VIE had long-term debt of $1.2 million, which is collateralized by its property, plant and equipment are further guaranteed by a $1.4 million standby letter of credit issued by us. As of April 1, 2016, the VIE is current on its long-term debt. There are no other restrictions on the assets of the VIE. We have provided funding for capital investments in the VIE in proportion to our voting interest.

On April 28, 2016, we acquired the remaining interest of our VIE for $45.0 million using operating cash flows and available borrowings under the Credit Facility (as defined in Note 9 “Long-Term Debt and Capital Lease Obligations”). This acquisition of the remaining ownership interest will be accounted for as an acquisition of a noncontrolling interest. This acquisition allows us to increase efficiency and facilitates expansion of our production capabilities.