UPS 2010 Annual Report Download - page 122
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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, 2010 and 2009 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, 2010
2010:
Assets
Foreign Exchange Contracts ............... $— $ 36 $— $ 36
Interest Rate Contracts .................... — 182 — 182
Total .............................. $— $218 $— $218
Liabilities
Foreign Exchange Contracts ............... $— $111 $— $111
Interest Rate Contracts .................... — 30 — 30
Total .............................. $— $141 $— $141
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
NOTE 15. RESTRUCTURING COSTS AND BUSINESS DISPOSITIONS
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. Additionally, we have sold or shut-down certain non-core business units in 2010, and
recorded gains or losses upon the sale, as well as costs associated with each transaction.
Supply Chain & Freight—Germany
In February 2010, we completed the sale of a specialized transportation and express freight business in
Germany within our Supply Chain & Freight segment. As part of the sale transaction, we incurred certain costs
110