Accounts Receivable Sales Program

9 Months Ended

Sep. 30, 2011

Accounts Receivable Sales Program [Abstract]

Accounts Receivable Sales Program

5. Accounts Receivable Sales Program

     We 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 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				Nine Months Ended
	September 30,				September 30,
	2011		2010		2011		2010
			(In millions)
Accounts receivable sold to the third-party financial institution(1)	$	140	$	120	$	413	$	408
Cash received for accounts receivable sold under the program		79		80		239		255
Deferred purchase price related to accounts receivable sold		61		40		174		153
Cash received related to the deferred purchase price		64		43		169		141

⁽¹⁾ During the quarters and nine months ended September 30, 2011 and 2010, losses recognized on the sale of accounts receivable were immaterial.

	September 30,		December 31,
	2011		2010
	(In millions)
Accounts receivable sold and held by third-party financial institution	$	43	$	42
Uncollected deferred purchase price related to accounts receivable sold(1)		18		13

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

     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 and nine months ended September 30, 2011 and 2010.