UPS 2011 Annual Report Download - page 88
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UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table presents the changes in the above Level 3 instruments measured on a recurring basis for
the years ended December 31, 2011 and 2010 (in millions).
Marketable
Securities
Other
Investments Total
Balance on January 1, 2010 ......................................... $216 $301 $ 517
Transfers into (out of) Level 3 ....................................... — — —
Net realized and unrealized gains (losses):
Included in earnings (in investment income) ........................ (27) (34) (61)
Included in accumulated other comprehensive income (pre-tax) ......... 59 — 59
Purchases ....................................................... — — —
Settlements ...................................................... (110) — (110)
Balance on December 31, 2010 ...................................... $138 $267 $ 405
Transfers into (out of) Level 3 ....................................... — — —
Net realized and unrealized gains (losses):
Included in earnings (in investment income) ........................ — (50) (50)
Included in accumulated other comprehensive income (pre-tax) ......... — — —
Purchases ....................................................... — — —
Settlements ...................................................... (138) — (138)
Balance on December 31, 2011 ...................................... $— $217 $ 217
NOTE 3. FINANCE RECEIVABLES
The following is a summary of finance receivables at December 31, 2011 and 2010 (in millions):
2011 2010
Commercial term loans .................................................. $197 $266
Other financing receivables ............................................... 154 245
Gross finance receivables ................................................ 351 511
Less: Allowance for credit losses .......................................... (16) (20)
Balance at December 31 ................................................. $335 $491
Our finance receivables portfolio consists of two product groups: commercial term loans and other financing
receivables. Other financing receivables consist of investments in finance leases, asset-based lending, cargo
finance and receivable factoring. The current portion of finance receivables is included in “Other current assets”
and the non-current portion of finance receivables is included in “Other non-current assets” on our consolidated
balance sheets. Outstanding receivable balances at December 31, 2011 and 2010 are net of unearned income of
$12 and $15 million, respectively.
When we “factor” (i.e., purchase) a customer invoice from a client, we record the customer receivable as an
asset and also establish a liability for the funds due to the client, which is recorded in accounts payable on the
consolidated balance sheets. As of December 31, 2011 and 2010, the amounts due to clients under our factoring
programs were $79 and $71 million, respectively.
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