Inc. Announces Update on Previously Disclosed Tax Audits
Does Not Accept Current IRS Position
FL., August 18, 2006 -- Alico, Inc. (NASDAQ: ALCO), a leading landholder
agribusiness company, announced that, as expected, it has received a thirty
letter dated August 14, 2006 from the Internal Revenue Service pertaining
ongoing audits of Alico for the tax years 2000 through 2004. The letter proposes
changes to the Company’s tax liabilities for each of these tax years and
requires the Company either to agree with the changes and remit the specified
taxes and penalties, or to submit a rebuttal within 30 days.
previously disclosed, the IRS has proposed several alternative theories as
basis for its argument that Alico should have reported additional taxable
in the years under audit. These theories principally relate to the formation
capitalization of the Company's Agri Insurance subsidiary and its tax exempt
status during the years under audit. Under the theories proposed, the IRS
calculated additional taxes and penalties due ranging from a minimum of $39.4
million dollars to a maximum of $82.3 million dollars. The letter does not
quantify the interest on the taxes.
Company does not accept the IRS position and intends to continue to oppose
vigorously any attempt by the IRS to impose such an assessment in connection
with the Agri Insurance matter.
Inc., a leading landholder and agribusiness company operating in Central
Southwest Florida, owns approximately 136,000 acres of land located in Collier,
Hendry, Lee and Polk counties. Alico is involved in various operations and
activities including the production, purchase, harvesting and marketing of
citrus, cattle ranching, sugarcane and sod production, and various other
agricultural ventures. Alico also leases land for farming, cattle grazing,
recreation and oil exploration. Alico intends to grow its asset values and
earnings through enhancements to its agricultural businesses and proactive
management of its real estate holdings.
Further Information Contact:
of the statements in this press release include statements about future
expectations. Statements that are not historical facts are "forward-looking
statements" for the purpose of the safe harbor provided by Section 21E of
Exchange Act and Section 27A of the Securities Act. These forward-looking
statements, which include references to expectations about future prospects
predictive in nature or depend upon or refer to future events or conditions
which may not be achievable and, are subject to known, as well as, unknown
and uncertainties that may cause actual results to differ materially from
expectations. The Company undertakes no obligation to update publicly any
forward-looking statements, whether as a result of future events, new
information or otherwise.