Long-Term Receivables

3 Months Ended

Mar. 24, 2012

Long-Term Receivables [Abstract]

LONG-TERM RECEIVABLES

NOTE 5 — LONG-TERM RECEIVABLES

At March 24, 2012, Dole’s long-term financing receivables consisted of $14.7 million of grower advances, net of allowances, $8.3 million of note receivable related to the sale of discontinued operations, $28 million of notes receivable related to the sale of a German subsidiary and net long-term trade receivables of $3.3 million. These assets have been included in other assets, in the accompanying condensed consolidated balance sheet as of March 24, 2012.

Dole monitors the collectability of these advances through periodic review of financial information received from these growers. At March 24, 2012, these advances had an allowance for credit losses of $14.1 million, and approximately $6 million of the net grower advances were 90 days past due. Dole’s historical losses on its long-term grower advances have been immaterial and Dole expects this to continue. During the quarter ended March 24, 2012, the allowance for grower advances increased by $1.5 million, which related to an increase in the provision that was recorded to cost of products sold.

At March 24, 2012, Dole had an $8.3 million note receivable and a $1 million net interest receivable from the buyer of the fresh-cut flowers business. These receivables are secured by properties that have an estimated fair value in excess of the note, which was due in January 2011. Two of the three Colombian companies that have granted mortgages in such properties to secure their guaranties of such note are currently under reorganization pursuant to Colombian Law 1116. Dole is currently renegotiating with the buyer the terms of the note, including the timing of payment and the interest rate. Dole believes that based on its position in the reorganization, that the note will be collected. During the second quarter of 2012, Dole received a cash payment of $2.9 million from the owner of certain properties formerly owned by the one Colombian company that is not in reorganization. In exchange, Dole released the mortgages on such properties.

During the fourth quarter of 2011, Dole entered into an agreement to sell a German subsidiary. The sale was completed during the first quarter of 2012. Net consideration from the sale totaled approximately $49.6 million. Of this amount, $20.6 million of cash proceeds, net of cash disposed, was collected and the remaining $29 million was recorded as notes receivable, which mature on various dates through March 2022. Of the $29 million notes receivable, $28 million was recorded as long-term notes receivable, of which $22.8 million have annual minimum payment requirements based on the financial performance of the business. The remaining note receivable of $5.2 million is fully secured by property that has an estimated fair value in excess of the note.

Dole has gross long-term trade receivables of $19.1 million due from a customer in Eastern Europe, for which it is likely that payment will not be received during the next year. Dole has $15.8 million of allowances for bad debt related to these receivables. The net receivable of $3.3 million represents management’s best estimate of its net realizable value after consideration of collateral securing the receivable.