Trade and Finance Receivables

TRADE RECEIVABLES

Our primary markets are in North America and Europe, but we also have sales in the Middle East and other markets. The majority of our sales in the Middle East are in Iran under license from the U.S. government that allows sale of food products to non-sanctioned parties. Sales to Iranian customers are in U.S. dollars and represent $12 million, $17 million and $18 million of "Trade receivables, less allowances" on the Condensed Consolidated Balance Sheet as of June 30, 2014, December 31, 2013 and June 30, 2013, respectively. Even though the sales in Iran are permitted, the international sanctions against Iran affected the ability of certain Iranian customers to pay invoices within terms because it became difficult for them to obtain U.S. dollars, euros or other suitable currencies in sufficient quantity on a regular basis. Over the course of 2012, our receivable balance with these customers increased, and we established payment plans with each of these customers to reduce their balances. Certain customers have so far been able to find acceptable methods of payment to comply with their payment plans. However, some customers have not, and as a result, we recorded a reserve of $9 million in 2012, with an additional $2 million in 2013 as a result of further delinquency and other repayment risk. We source bananas from the Philippines for sale in the Middle East under a committed-volume, long term purchase contract with a former joint venture partner through 2016. To mitigate risk, we have reduced the amount of volume being sent to the Middle East and have developed other Middle Eastern markets. However, Iran remains an important market for our Philippine-sourced bananas.

FINANCE RECEIVABLES

Finance receivables were as follows:



	June 30, 2014					December 31, 2013					June 30, 2013
(In thousands)	Grower Receivables			Seller Financing		Grower Receivables			Seller Financing		Grower Receivables			Seller Financing
Gross receivable	$	34,012		$	25,327	$	35,761		$	27,127	$	37,251		$	28,858
Reserve	(32,777		)	—		(32,877		)	—		(33,904		)	—
Net receivable	$	1,235		$	25,327	$	2,884		$	27,127	$	3,347		$	28,858

Current portion, net	$	1,235		$	4,148	$	2,884		$	3,990	$	3,347		$	3,837
Long-term portion, net	—			21,179		—			23,137		—			25,021
Net receivable	$	1,235		$	25,327	$	2,884		$	27,127	$	3,347		$	28,858

Activity in the reserve for grower receivables is as follows:



(In thousands)	2014			2013
Reserve at beginning of year	$	32,877		$	36,854
Charged to costs and expenses	—			26
Recoveries	—			(51		)
Foreign exchange and other	—			1
Reserve at March 31	$	32,877		$	36,830
Charged to costs and expenses	—			35
Recoveries	(100		)	(51		)
Write-offs	—			(2,910		)
Foreign exchange and other	—			—
Reserve at June 30	$	32,777		$	33,904

Seasonal advances may be made to certain qualified growers of other produce, which are normally collected as the other produce is harvested and sold. We generally require asset liens and pledges of the season's produce as collateral to support these advances. If sales of the season's produce do not result in full repayment of the advance, we may exercise the collateral provisions or renegotiate the terms, including terms of interest, to collect the remaining balance.

The gross grower receivable balance includes $29 million, $29 million and $30 million (all of which were classified as long-term) related to a Chilean grower of grapes and other produce as of June 30, 2014, December 31, 2013 and June 30, 2013, respectively. In 2011, we fully reserved the advances made to this Chilean grower, who was declared bankrupt later that year. We continue to aggressively negotiate recovery.

We provided seller financing in the 2009 sale of the former joint venture that sourced bananas and pineapples from the Philippines for sale in the Middle East and Asia. The financing for the sale of this joint venture is a note that is receivable in equal installments through 2019. As of June 30, 2014, payments are current on this note receivable.