{"id":2058,"date":"2010-11-09T08:51:56","date_gmt":"2010-11-09T13:51:56","guid":{"rendered":"http:\/\/www.credittrends.com\/blog\/?p=2058"},"modified":"2010-11-11T11:03:14","modified_gmt":"2010-11-11T16:03:14","slug":"pensions-what-the-ups-2-billon-bond-sale-represents","status":"publish","type":"post","link":"https:\/\/www.credittrends.com\/blog\/2010\/11\/09\/pensions-what-the-ups-2-billon-bond-sale-represents\/","title":{"rendered":"Pensions-What UPS’s $2 billon Bond Sale Represents"},"content":{"rendered":"

UPS sold $2 billion in long-term bonds to fund its pensions yesterday, raising its total debt\/equity to over 100%.<\/p>\n

Although UPS is a solid and consistent generator of both free and operating cash flows, we saw that during the credit crisis of a short couple of years ago, even UPS\u2019s fixed income securities could be impaired.<\/p>\n


\nEven though the after-tax rate on the $2 billion is low, as $1.5 billion was sold at a 3.125% coupon and $500 million\u00a0was sold at 4.875%, and UPS has a cash tax rate of\u00a0 about 29% versus a 31.9% reported rate, it does result in lost financial flexibility for the firm. This may not appear \u00a0important during the current period of strong financial markets, but could very well change if economic conditions deteriorate or the need for capital arises. At a minimum, such cost will be higher regardless of the period in the economic and business cycle.<\/p>\n

Despite the almost 12% rally in stocks thus far this year, pension underfunding has slightly deteriorated due to the lowering of the discount rate-that rate from which liabilities are brought to present value.<\/p>\n

In fact, I estimate the median firm having a defined benefit plan now 22% underfunded.<\/p>\n

Below is a list of plans with at least $1billion in reported<\/strong> underfunding. Bear in mind the plans at these firms utilize actuarial methods which are not borne in today\u2019s interest rate climate, therefore their underfunded status is greater than what is being reported to shareholders, as yesterday\u2019s action by UPS illustrates. For example, though UPS raised $2billion, I estimate, their plans are still about $600 million\u00a0underfunded.<\/p>\n

Please also bear in mind actions of the sort\u00a0undertaken\u00a0by UPS indicate the following:<\/p>\n

    \n
  1. Past cash flows-operating and free were overstated<\/li>\n
  2. New leverage ratio results in higher cost of capital which changes borrowing costs and any equity that needs to be raised<\/li>\n
  3. Prospective cash flows impacted by after-tax interest expense<\/li>\n
  4. Implicitly recognizes additional future cash flows impacted due to still underfunded status<\/li>\n<\/ol>\n

    I would expect many to most of the firms on this list to step up their pension contributions shortly (prior to the 10-K season). The funds will come from a combination of internally generated cash, borrowing, asset sales, or other creative financing, as with Heinz selling of receivables and swaps.<\/strong><\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
    \u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n<\/tr>\n
    Company Name<\/td>\nTicker Symbol<\/td>\nMarket Value-Traded -Current<\/td>\nPension-Funded Status<\/td>\n<\/tr>\n
    3M CO<\/td>\n\u00a0<\/td>\nMMM<\/td>\n62,221.328<\/td>\n\u00a0<\/td>\n(1,686.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    ABBOTT LABORATORIES<\/td>\nABT<\/td>\n78,536.584<\/td>\n\u00a0<\/td>\n(1,040.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    AEGON NV<\/td>\n\u00a0<\/td>\nAEG<\/td>\n11,579.446<\/td>\n\u00a0<\/td>\n(2,197.096)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    AES CORP<\/td>\n\u00a0<\/td>\nAES<\/td>\n9,488.491<\/td>\n\u00a0<\/td>\n(1,280.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    AK STEEL HOLDING CORP<\/td>\nAKS<\/td>\n1,490.351<\/td>\n\u00a0<\/td>\n(1,124.700)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    AKZO NOBEL NV\u00a0 -ADR<\/td>\nAKZOY<\/td>\n14,351.122<\/td>\n\u00a0<\/td>\n(2,675.784)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    ALCOA INC<\/td>\n\u00a0<\/td>\nAA<\/td>\n13,891.611<\/td>\n\u00a0<\/td>\n(3,093.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    ALLSTATE CORP<\/td>\nALL<\/td>\n16,780.578<\/td>\n\u00a0<\/td>\n(1,106.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    ALTRIA GROUP INC<\/td>\nMO<\/td>\n54,596.674<\/td>\n\u00a0<\/td>\n(1,205.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    AMERICAN ELECTRIC POWER CO<\/td>\nAEP<\/td>\n18,022.037<\/td>\n\u00a0<\/td>\n(1,298.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    AMERICAN INTERNATIONAL GROUP<\/td>\nAIG<\/td>\n6,045.538<\/td>\n\u00a0<\/td>\n(1,888.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    AMR CORP\/DE<\/td>\nAMR<\/td>\n2,779.605<\/td>\n\u00a0<\/td>\n(4,952.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    ANHEUSER-BUSCH INBEV\u00a0 -ADR<\/td>\nBUD<\/td>\n100,493.015<\/td>\n\u00a0<\/td>\n(2,214.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    AON CORP<\/td>\n\u00a0<\/td>\nAON<\/td>\n13,556.208<\/td>\n\u00a0<\/td>\n(1,733.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    ARCELORMITTAL -ADR<\/td>\nMT<\/td>\n55,428.093<\/td>\n\u00a0<\/td>\n(1,957.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    AT&T INC<\/td>\n\u00a0<\/td>\nT<\/td>\n173,960.960<\/td>\n\u00a0<\/td>\n(3,977.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    AVIVA PLC\u00a0 -ADR<\/td>\nAV<\/td>\n19,316.831<\/td>\n\u00a0<\/td>\n(4,753.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    AXA\u00a0 -ADR<\/td>\n\u00a0<\/td>\nAXAHY<\/td>\n43,780.411<\/td>\n\u00a0<\/td>\n(10,638.644)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    BANK OF IRELAND\u00a0 -ADR<\/td>\nIRE<\/td>\n3,789.081<\/td>\n\u00a0<\/td>\n(2,337.549)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    BARCLAYS PLC\/ENGLAND\u00a0 -ADR<\/td>\nBCS<\/td>\n49,410.215<\/td>\n\u00a0<\/td>\n(6,120.826)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    BASF SE\u00a0 -ADR<\/td>\nBASFY<\/td>\n72,915.293<\/td>\n\u00a0<\/td>\n(2,445.039)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    BAXTER INTERNATIONAL INC<\/td>\nBAX<\/td>\n30,077.524<\/td>\n\u00a0<\/td>\n(1,143.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    BERKSHIRE HATHAWAY<\/td>\nBRK.B<\/td>\n205,002.922<\/td>\n\u00a0<\/td>\n(2,210.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    BOEING CO<\/td>\n\u00a0<\/td>\nBA<\/td>\n51,974.144<\/td>\n\u00a0<\/td>\n(6,356.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    BRISTOL-MYERS SQUIBB CO<\/td>\nBMY<\/td>\n45,924.510<\/td>\n\u00a0<\/td>\n(1,283.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    BRITISH AMERN TOB PLC\u00a0 -ADR<\/td>\nBTI<\/td>\n79,142.096<\/td>\n\u00a0<\/td>\n(1,419.463)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    BT GROUP PLC\u00a0 -ADR<\/td>\nBT<\/td>\n20,485.304<\/td>\n\u00a0<\/td>\n(8,611.981)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    CANON INC\u00a0 -ADR<\/td>\nCAJ<\/td>\n63,127.000<\/td>\n\u00a0<\/td>\n(1,216.416)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    CATERPILLAR INC<\/td>\nCAT<\/td>\n52,442.660<\/td>\n\u00a0<\/td>\n(3,780.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    CBS CORP<\/td>\n\u00a0<\/td>\nCBS<\/td>\n12,020.325<\/td>\n\u00a0<\/td>\n(1,414.400)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    CELANESE CORP<\/td>\nCE<\/td>\n5,966.601<\/td>\n\u00a0<\/td>\n(1,013.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    CHEVRON CORP<\/td>\nCVX<\/td>\n171,181.973<\/td>\n\u00a0<\/td>\n(3,840.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    CIGNA CORP<\/td>\nCI<\/td>\n10,339.344<\/td>\n\u00a0<\/td>\n(1,513.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    CITIGROUP INC<\/td>\nC<\/td>\n125,455.382<\/td>\n\u00a0<\/td>\n(1,052.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    COMPUTER SCIENCES CORP<\/td>\nCSC<\/td>\n7,666.759<\/td>\n\u00a0<\/td>\n(1,218.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    CONOCOPHILLIPS<\/td>\nCOP<\/td>\n90,855.986<\/td>\n\u00a0<\/td>\n(2,718.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    CONSOLIDATED EDISON INC<\/td>\nED<\/td>\n14,759.220<\/td>\n\u00a0<\/td>\n(2,531.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    CONTINENTAL AG\u00a0 -ADR<\/td>\nCTTAY<\/td>\n17,826.734<\/td>\n\u00a0<\/td>\n(1,556.455)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    CONTINENTAL AIRLS INC\u00a0 -CL B<\/td>\nCAL<\/td>\n@NC<\/td>\n\u00a0<\/td>\n(1,258.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    DAIMLER AG<\/td>\nDDAIF<\/td>\n151,026.283<\/td>\n\u00a0<\/td>\n(8,463.046)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    DEERE & CO<\/td>\nDE<\/td>\n33,561.473<\/td>\n\u00a0<\/td>\n(1,307.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    DELTA AIR LINES INC<\/td>\nDAL<\/td>\n11,186.885<\/td>\n\u00a0<\/td>\n(9,408.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    DEUTSCHE TELEKOM AG\u00a0 -ADR<\/td>\nDTEGY<\/td>\n63,557.514<\/td>\n\u00a0<\/td>\n(8,907.338)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    DIAGEO PLC\u00a0 -ADR<\/td>\nDEO<\/td>\n47,489.261<\/td>\n\u00a0<\/td>\n(1,801.114)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    DISNEY (WALT) CO<\/td>\nDIS<\/td>\n70,823.839<\/td>\n\u00a0<\/td>\n(2,159.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    DOW CHEMICAL<\/td>\nDOW<\/td>\n38,008.480<\/td>\n\u00a0<\/td>\n(5,325.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    DU PONT (E I) DE NEMOURS<\/td>\nDD<\/td>\n44,147.553<\/td>\n\u00a0<\/td>\n(5,627.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    E.ON AG\u00a0 -ADR<\/td>\nEONGY<\/td>\n64,356.162<\/td>\n\u00a0<\/td>\n(4,116.150)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    EASTMAN KODAK CO<\/td>\nEK<\/td>\n1,304.054<\/td>\n\u00a0<\/td>\n(1,123.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    EATON CORP<\/td>\nETN<\/td>\n15,647.350<\/td>\n\u00a0<\/td>\n(1,568.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    ENTERGY CORP<\/td>\nETR<\/td>\n13,685.100<\/td>\n\u00a0<\/td>\n(1,230.470)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    EXELON CORP<\/td>\nEXC<\/td>\n27,230.374<\/td>\n\u00a0<\/td>\n(3,643.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    EXXON MOBIL CORP<\/td>\nXOM<\/td>\n353,269.375<\/td>\n\u00a0<\/td>\n(11,647.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    FEDEX CORP<\/td>\nFDX<\/td>\n27,940.209<\/td>\n\u00a0<\/td>\n(1,189.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    FORD MOTOR CO<\/td>\nF<\/td>\n53,939.860<\/td>\n\u00a0<\/td>\n(11,962.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    GENERAL DYNAMICS CORP<\/td>\nGD<\/td>\n26,128.552<\/td>\n\u00a0<\/td>\n(2,454.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    GENERAL ELECTRIC CO<\/td>\nGE<\/td>\n176,512.038<\/td>\n\u00a0<\/td>\n(8,698.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    GLAXOSMITHKLINE PLC\u00a0 -ADR<\/td>\nGSK<\/td>\n104,003.886<\/td>\n\u00a0<\/td>\n(2,821.142)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    GOODYEAR TIRE & RUBBER CO<\/td>\nGT<\/td>\n2,548.157<\/td>\n\u00a0<\/td>\n(2,715.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    HEWLETT-PACKARD CO<\/td>\nHPQ<\/td>\n99,939.430<\/td>\n\u00a0<\/td>\n(4,482.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    HITACHI LTD\u00a0 -ADR<\/td>\nHIT<\/td>\n21,253.396<\/td>\n\u00a0<\/td>\n(9,896.317)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    HONDA MOTOR CO LTD\u00a0 -ADR<\/td>\nHMC<\/td>\n62,965.237<\/td>\n\u00a0<\/td>\n(5,505.867)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    HONEYWELL INTERNATIONAL INC<\/td>\nHON<\/td>\n38,236.277<\/td>\n\u00a0<\/td>\n(4,121.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    HSBC HOLDINGS PLC\u00a0 -ADR<\/td>\nHBC<\/td>\n134,661.925<\/td>\n\u00a0<\/td>\n(6,109.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    IMPERIAL OIL LTD<\/td>\nIMO<\/td>\n32,937.697<\/td>\n\u00a0<\/td>\n(1,245.579)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    INTL BUSINESS MACHINES CORP<\/td>\nIBM<\/td>\n182,366.166<\/td>\n\u00a0<\/td>\n(8,088.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    INTL PAPER CO<\/td>\nIP<\/td>\n11,441.314<\/td>\n\u00a0<\/td>\n(2,760.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    ITT CORP<\/td>\n\u00a0<\/td>\nITT<\/td>\n8,764.686<\/td>\n\u00a0<\/td>\n(1,391.900)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    JOHNSON & JOHNSON<\/td>\nJNJ<\/td>\n178,377.863<\/td>\n\u00a0<\/td>\n(2,526.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    KIMBERLY-CLARK CORP<\/td>\nKMB<\/td>\n25,695.840<\/td>\n\u00a0<\/td>\n(1,247.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    KRAFT FOODS INC<\/td>\nKFT<\/td>\n63,715.045<\/td>\n\u00a0<\/td>\n(1,703.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    LILLY (ELI) & CO<\/td>\nLLY<\/td>\n41,236.392<\/td>\n\u00a0<\/td>\n(1,545.400)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    LOCKHEED MARTIN CORP<\/td>\nLMT<\/td>\n25,914.810<\/td>\n\u00a0<\/td>\n(10,663.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    LOREAL CO\u00a0 -ADR<\/td>\nLRLCY<\/td>\n73,694.828<\/td>\n\u00a0<\/td>\n(1,455.415)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    LYONDELLBASELL INDUSTRIES NV<\/td>\nLYB<\/td>\n16,789.013<\/td>\n\u00a0<\/td>\n(1,140.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    MACY’S INC<\/td>\nM<\/td>\n10,803.573<\/td>\n\u00a0<\/td>\n(1,694.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    MARATHON OIL CORP<\/td>\nMRO<\/td>\n24,008.610<\/td>\n\u00a0<\/td>\n(1,413.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    MERCK & CO<\/td>\nMRK<\/td>\n112,647.184<\/td>\n\u00a0<\/td>\n(2,348.600)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    MOTOROLA INC<\/td>\nMOT<\/td>\n19,032.441<\/td>\n\u00a0<\/td>\n(2,387.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    NAVISTAR INTERNATIONAL CORP<\/td>\nNAV<\/td>\n3,889.779<\/td>\n\u00a0<\/td>\n(1,508.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    NCR CORP<\/td>\n\u00a0<\/td>\nNCR<\/td>\n2,343.424<\/td>\n\u00a0<\/td>\n(1,048.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    NESTLE SA\u00a0 -ADR<\/td>\n3NSRGY<\/td>\n199,906.245<\/td>\n\u00a0<\/td>\n(2,923.344)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    NIPPON TELEGRPH & TELE\u00a0 -ADR<\/td>\nNTT<\/td>\n71,559.539<\/td>\n\u00a0<\/td>\n(15,500.503)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    NISSAN MOTOR CO LTD\u00a0 -ADR<\/td>\nNSANY<\/td>\n40,428.753<\/td>\n\u00a0<\/td>\n(1,772.741)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    NORSK HYDRO ASA\u00a0 -ADR<\/td>\nNHYDY<\/td>\n10,753.180<\/td>\n\u00a0<\/td>\n(1,388.625)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    NORTHROP GRUMMAN CORP<\/td>\nNOC<\/td>\n19,058.123<\/td>\n\u00a0<\/td>\n(2,750.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    NTT DOCOMO INC\u00a0 -ADR<\/td>\nDCM<\/td>\n73,085.512<\/td>\n\u00a0<\/td>\n(1,481.938)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    PANASONIC CORP -ADR<\/td>\nPC<\/td>\n35,544.738<\/td>\n\u00a0<\/td>\n(4,701.284)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    PARKER-HANNIFIN CORP<\/td>\nPH<\/td>\n12,971.403<\/td>\n\u00a0<\/td>\n(1,410.649)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    PEPSICO INC<\/td>\nPEP<\/td>\n103,569.356<\/td>\n\u00a0<\/td>\n(1,334.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    PETROBRAS BRASILEIRO SA -ADR<\/td>\nPBR<\/td>\n228,326.143<\/td>\n\u00a0<\/td>\n(4,788.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    PFIZER INC<\/td>\n\u00a0<\/td>\nPFE<\/td>\n139,705.269<\/td>\n\u00a0<\/td>\n(6,507.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    PG&E CORP<\/td>\n\u00a0<\/td>\nPCG<\/td>\n18,955.380<\/td>\n\u00a0<\/td>\n(1,436.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    PPL CORP<\/td>\n\u00a0<\/td>\nPPL<\/td>\n12,936.976<\/td>\n\u00a0<\/td>\n(1,290.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    PROCTER & GAMBLE CO<\/td>\nPG<\/td>\n181,947.552<\/td>\n\u00a0<\/td>\n(4,683.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    PUBLIC SERVICE ENTRP GRP INC<\/td>\nPEG<\/td>\n16,828.330<\/td>\n\u00a0<\/td>\n(1,103.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    RAYTHEON CO<\/td>\nRTN<\/td>\n17,519.937<\/td>\n\u00a0<\/td>\n(4,602.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    REYNOLDS AMERICAN INC<\/td>\nRAI<\/td>\n19,371.903<\/td>\n\u00a0<\/td>\n(1,216.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    RHODIA\u00a0 -ADR<\/td>\nRHAYY<\/td>\n3,154.943<\/td>\n\u00a0<\/td>\n(2,122.569)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    RICOH CO LTD\u00a0 -ADR<\/td>\n3RICOY<\/td>\n10,588.775<\/td>\n\u00a0<\/td>\n(1,205.278)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    ROCKWELL COLLINS INC<\/td>\nCOL<\/td>\n9,526.260<\/td>\n\u00a0<\/td>\n(1,040.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    SANOFI-AVENTIS\u00a0 -ADR<\/td>\nSNY<\/td>\n95,198.429<\/td>\n\u00a0<\/td>\n(5,734.233)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    SEARS HOLDINGS CORP<\/td>\nSHLD<\/td>\n8,227.224<\/td>\n\u00a0<\/td>\n(1,847.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    SIEMENS AG\u00a0 -ADR<\/td>\nSI<\/td>\n108,451.902<\/td>\n\u00a0<\/td>\n(5,873.945)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    SMURFIT-STONE CONTAINER CORP<\/td>\nSSCC<\/td>\n2,216.191<\/td>\n\u00a0<\/td>\n(1,129.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    SONY CORP\u00a0 -ADR<\/td>\nSNE<\/td>\n33,362.234<\/td>\n\u00a0<\/td>\n(3,115.289)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    SOUTHERN CO<\/td>\nSO<\/td>\n31,940.645<\/td>\n\u00a0<\/td>\n(1,131.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    STATOIL ASA\u00a0 -ADR<\/td>\nSTO<\/td>\n68,460.251<\/td>\n\u00a0<\/td>\n(3,186.238)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    TEXTRON INC<\/td>\nTXT<\/td>\n6,100.053<\/td>\n\u00a0<\/td>\n(1,443.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    TOKIO MARINE HOLDINGS -ADR<\/td>\nTKOMY<\/td>\n23,221.780<\/td>\n\u00a0<\/td>\n(1,639.914)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    TOSHIBA CORP -ADR<\/td>\nTOSYY<\/td>\n21,551.031<\/td>\n\u00a0<\/td>\n(7,774.484)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    TOYOTA MOTOR CORP\u00a0 -ADR<\/td>\nTM<\/td>\n125,386.413<\/td>\n\u00a0<\/td>\n(5,864.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    UBS AG<\/td>\n\u00a0<\/td>\nUBS<\/td>\n63,867.445<\/td>\n\u00a0<\/td>\n(1,611.315)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    UNISYS CORP<\/td>\nUIS<\/td>\n1,022.148<\/td>\n\u00a0<\/td>\n(1,505.100)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    UNITED PARCEL SERVICE INC<\/td>\nUPS<\/td>\n50,294.639<\/td>\n\u00a0<\/td>\n(2,506.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    UNITED STATES STEEL CORP<\/td>\nX<\/td>\n6,797.298<\/td>\n\u00a0<\/td>\n(1,708.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    UNITED TECHNOLOGIES CORP<\/td>\nUTX<\/td>\n70,400.548<\/td>\n\u00a0<\/td>\n(2,894.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    VERIZON COMMUNICATIONS INC<\/td>\nVZ<\/td>\n94,753.765<\/td>\n\u00a0<\/td>\n(3,226.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    VOLVO AB SWE\u00a0 -ADR<\/td>\nVOLVY<\/td>\n21,377.818<\/td>\n\u00a0<\/td>\n(2,161.270)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    WELLS FARGO & CO<\/td>\nWFC<\/td>\n143,709.845<\/td>\n\u00a0<\/td>\n(1,607.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    WHIRLPOOL CORP<\/td>\nWHR<\/td>\n6,066.396<\/td>\n\u00a0<\/td>\n(1,568.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n
    XEROX CORP<\/td>\nXRX<\/td>\n16,549.260<\/td>\n\u00a0<\/td>\n(1,633.000)<\/td>\n\u00a0<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

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    UPS sold $2 billion in long-term bonds to fund its pensions yesterday, raising its total debt\/equity to over 100%. Although UPS is a solid and consistent generator of both free and operating cash flows, we saw that during the credit crisis of a short couple of years ago, even UPS\u2019s fixed income securities could be […]<\/p>\n

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