United Parcel Service, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

FINANCE RECEIVABLES (Tables)

FINANCE RECEIVABLES (Tables)

12 Months Ended

Dec. 31, 2011

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

Rollforward of Allowance for Credit Losses on Finance Receivables

The following is a rollforward of the allowance for credit losses on finance receivables (in millions):


	2011			2010
Balance at January 1	$	20		$	31
Provisions charged to operations		4			10
Charge-offs, net of recoveries		(8	)		(21	)

Balance at December 31	$	16		$	20

Allocation of the Finance Receivables Portfolio by Risk Rating Category

The following is an allocation of the finance receivables portfolio by risk rating category as of December 31, 2011 (in millions):


	Commercial Lending		Other Financing Receivables		Total
U.S. Government guaranteed	$	62	$	—	$	62
Acceptable risk		119		151		270
Sub-standard risk		7		3		10
Classified		9		—		9

	$	197	$	154	$	351

Aging Analysis of Past Due Finance Receivables

The following is an aging analysis of our finance receivables as of December 31, 2011 (in millions):


	30-59 Days Past Due		60-90 Days Past Due		Greater than 90 Days Past Due		Current		Total Finance Receivables
Commercial term loans:
U.S. Government guaranteed	$	1	$	—	$	30	$	31	$	62
Other unguaranteed		—		5		15		115		135
Other financing receivables		—		—		1		153		154

Total finance receivables	$	1	$	5	$	46	$	299	$	351

Analysis of Impaired Finance Receivables

The following is an analysis of impaired finance receivables as of December 31, 2011 (in millions):


	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
Impaired loans with related allowance	$	9	$	36	$	7	$	14	$	—
Impaired loans with no related allowance		7		80		—		12		—
Impaired loans with U.S. government guarantee		35		35		—		51		—

Total impaired loans	$	51	$	151	$	7	$	77	$	—

The Carrying Value of Finance Receivables by Contractual Maturity

The carrying value of finance receivables at December 31, 2011, by contractual maturity, is shown below (in millions). Actual maturities may differ from contractual maturities because some borrowers have the right to prepay these receivables without prepayment penalties.


	Carrying Value
Due in one year or less	$	130
Due after one year through three years		33
Due after three years through five years		28
Due after five years		160

	$	351