Accounts Receivable Sales Program

3 Months Ended

Mar. 31, 2012

Accounts Receivable Sales Program [Abstract]

Accounts Receivable Sales Program

4. Accounts Receivable Sales Program

We currently participate in an accounts receivable sales program where we sell receivables in their entirety to a third party financial institution (through a wholly-owned special purpose entity). The sale of these accounts receivable (which are short-term assets that generally settle within 60 days) qualify for sale accounting. The existing program is scheduled to terminate on May 29, 2012 however, we are evaluating options to extend the program. The third party financial institution involved in our accounts receivable sales program acquires interests in various financial assets and issues commercial paper to fund those acquisitions. We do not consolidate the third party financial institution because we do not have the power to control, direct, or exert significant influence over its overall activities since our receivables do not comprise a significant portion of its operations.

In connection with our accounts receivable sales, we receive a portion of the sales proceeds up front and receive an additional amount upon the collection of the underlying receivables (which we refer to as a deferred purchase price). Our ability to recover the deferred purchase price is based solely on the collection of the underlying receivables. The tables below contain information related to our accounts receivable sales program.

	Quarter Ended March 31,
	2012		2011
	(In millions)
Accounts receivable sold to the third party financial institution (1)	$	278	$	204
Cash received for accounts receivable sold under the program		135		118
Deferred purchase price related to accounts receivable sold		143		86
Cash received related to the deferred purchase price		161		84

⁽¹⁾  During the quarters ended March 31, 2012 and 2011, losses recognized on the sale of accounts receivable were immaterial.

		000000000000		000000000000
	March 31, 2012		December 31, 2011
	(In millions)
Accounts receivable sold and held by third party financial institution	$	90	$	108
Uncollected deferred purchase price related to accounts receivable sold (1)		45		63

⁽¹⁾  Initially recorded at an amount which approximates its fair value using observable inputs other than quoted prices in active markets (Level 2 fair value measurement).

The deferred purchase price related to the accounts receivable sold is reflected as other accounts receivable on our balance sheet. Because the cash received up front and the deferred purchase price relate to the sale or ultimate collection of the underlying receivables, and are not subject to significant other risks given their short term nature, we reflect all cash flows under the accounts receivable sales program as operating cash flows on our statement of cash flows. Under the accounts receivable sales program, we service the underlying receivables for a fee. The fair value of this servicing agreement, as well as the fees earned, were not material to our financial statements for the quarters ended March 31, 2012 and 2011.