UPS 2009 Annual Report Download - page 117

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UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Fair Value Measurements
Our foreign currency, interest rate, and energy derivatives are largely comprised of over-the-counter
derivatives, which are primarily valued using pricing models that rely on market observable inputs such as yield
curves, currency exchange rates, and commodity forward prices, and therefore are classified as Level 2. The fair
values of our derivative assets and liabilities as of December 31, 2009 and 2008 by hedge type are as follows (in
millions):
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
Significant
Other
Observable
Inputs (Level 2)
Significant
Unobservable
Inputs
(Level 3)
Balance as of
December 31, 2009
2009:
Assets
Foreign Exchange Contracts .............. $— $ 63 $— $ 63
Interest Rate Contracts .................. — 74 — 74
Total ............................ $— $137 $— $137
Liabilities
Foreign Exchange Contracts .............. $— $ 51 $— $ 51
Interest Rate Contracts .................. — 15 — 15
Total ............................ $— $ 66 $— $ 66
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
Significant
Other
Observable
Inputs (Level 2)
Significant
Unobservable
Inputs (Level 3)
Balance as of
December 31, 2008
2008:
Assets
Foreign Exchange Contracts ............ $— $241 $— $241
Interest Rate Contracts ................. — 1 — 1
Total ........................... $— $242 $— $242
Liabilities
Foreign Exchange Contracts ............ $— $ 9 $— $ 9
Interest Rate Contracts ................. — 380 — 380
Total ........................... $— $389 $— $389
NOTE 15. RESTRUCTURING COSTS AND RELATED EXPENSES
We have incurred restructuring costs associated with the termination of employees, facility consolidations
and other costs directly related to restructuring initiatives. These initiatives have resulted from the integration of
acquired companies, as well as restructuring activities associated with cost containment and operational
efficiency programs.
Supply Chain & Freight—France
In the third quarter of 2007, we initiated a restructuring plan for our forwarding and logistics operations in
France to reduce our cost structure and focus on profitable revenue growth. The employment reduction program
was ratified by the trade union representatives in France in July 2007. Affected employees received severance
105