Finance Receivables

9 Months Ended

Sep. 30, 2011

Finance Receivables [Abstract]

Finance Receivables

Note 2 – Finance Receivables

Finance receivables were as follows:

	September 30, 2011					December 31, 2010					September 30, 2010
(In thousands)	Grower Receivables			Seller Financing		Grower Receivables			Seller Financing		Grower Receivables			Seller Financing
Gross receivable	$	54,648		$	36,155	$	80,432		$	39,821	$	72,146		$	41,321
Reserve		(37,923	)		0		(4,552	)		0		(4,480	)		0
Net receivable	$	16,725		$	36,155	$	75,880		$	39,821	$	67,666		$	41,321
Current portion, net	$	16,725		$	5,091	$	55,506		$	5,096	$	57,140		$	5,460
Long-term portion, net		0			31,064		20,374			34,725		10,526			35,861
Net receivable	$	16,725		$	36,155	$	75,880		$	39,821	$	67,666		$	41,321

Activity in the finance receivable reserve is as follows:

(In thousands)	Grower Receivables
Reserve at December 31, 2010	$	4,552
Charged to costs and expenses		246
Recoveries		0
Write-offs		0
Foreign exchange and other		(2	)
Reserve at March 31, 2011	$	4,796
Charged to costs and expenses		33,106
Recoveries		0
Write-offs		0
Foreign exchange and other		(2	)
Reserve at June 30, 2011	$	37,900
Charged to costs and expenses		20
Recoveries		0
Write-offs		0
Foreign exchange and other		3
Reserve at September 30, 2011	$	37,923

Seasonal advances may be made to certain qualified growers of other produce, which are normally collected as the other produce is harvested and sold. The company generally requires 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, the company may exercise the collateral provisions or renegotiate the terms, including terms of interest, to collect the remaining balance. The company also carries payables to growers related to revenue collected from the sale of the other produce that is subsequently remitted to the grower, less outstanding grower advances and a margin retained by the company based upon the terms of the contract. Grower payables of $11 million, $21 million and $14 million at September 30, 2011, December 31, 2010 and September 30, 2010, respectively, are included in "Accounts payable" in the Condensed Consolidated Balance Sheets.

Of the total gross balance of grower advances, $34 million (including $32 million classified as long-term), $50 million (including $20 million classified as long-term) and $41 million (including $10 million classified as long-term) relates to a Chilean grower of grapes and other produce as of September 30, 2011, December 31, 2010 and September 30, 2010, respectively. In the second quarter of 2011, the company recorded a reserve of $32 million for advances made to this Chilean grower based upon additional information received during the quarter on the grower's credit quality, lower than expected collections through the 2010-2011 Chilean grape season and a decision to change the company's grape sourcing model. In the third quarter of 2011, the Chilean grower was declared bankrupt; the company continues to aggressively negotiate recovery with the bankruptcy trustee and other creditors of the grower.

The company 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 receivable in equal installments through 2019. The company also provided seller financing in the 2004 sale of its former Colombian subsidiary in the form of a note receivable in equal installments through 2012. The terms of the seller financing were based on the earnings power of the businesses sold. Payments are current on both seller financing notes receivable.

The company includes finance receivables in the Condensed Consolidated Balance Sheets net of the reserve, with current portions included in "Other receivables, net" and long-term portions included in "Investments and other assets, net." Reserves are established when the company determines it is probable that the counterparty will not repay the finance receivable timely based on the company's knowledge of the counterparty's financial condition and the company's historical loss experience. Reserves are measured for each individual finance receivable using quantitative and qualitative factors, including consideration of the value of any collateral securing the seller financing or grower advance. Interest receivable on an overdue or renegotiated finance receivable is placed into nonaccrual status when collectibility becomes uncertain. Collectibility is assessed at the end of each reporting period and write-offs are recorded only when collection efforts have been abandoned. Recoveries of other receivables previously reserved are credited to income.