United Parcel Service, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

INVESTMENTS AND RESTRICTED CASH (Tables)

INVESTMENTS AND RESTRICTED CASH (Tables)

6 Months Ended

Jun. 30, 2015

The following is a summary of marketable securities classified as trading and available-for-sale as of June 30, 2015 and December 31, 2014 (in millions):



	Cost		Unrealized Gains		Unrealized Losses			Estimated Fair Value
June 30, 2015:
Current marketable securities:
U.S. government and agency debt securities	$	319	$	1	$	—		$	320
Mortgage and asset-backed debt securities	82		—		—			82
Corporate debt securities	1,835		1		(1		)	1,835
Other debt, equity and investment securities	546		11		(2		)	555
Total marketable securities	$	2,782	$	13	$	(3	)	$	2,792

December 31, 2014:
Current marketable securities:
U.S. government and agency debt securities	$	321	$	1	$	(1	)	$	321
Mortgage and asset-backed debt securities	89		1		(1		)	89
Corporate debt securities	534		—		—			534
Other debt, equity and investment securities	48		—		—			48
Total marketable securities	$	992	$	2	$	(2	)	$	992

Investments Classified by Contractual Maturity Date

The amortized cost and estimated fair value of marketable securities at June 30, 2015, by contractual maturity, are shown below (in millions). Actual maturities may differ from contractual maturities because the issuers of the securities may have the right to prepay obligations without prepayment penalties.



	Cost		Estimated Fair Value
Due in one year or less	$	2,039	$	2,039
Due after one year through three years	428		428
Due after three years through five years	14		15
Due after five years	73		73
	2,554		2,555
Equity and other investment securities	228		237
	$	2,782	$	2,792

Fair Value, Assets Measured on Recurring Basis

The following table presents information about our investments measured at fair value on a recurring basis as of June 30, 2015 and December 31, 2014, and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value (in millions):



	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance
June 30, 2015:
Marketable Securities:
U.S. government and agency debt securities	$	320	$	—	$	—	$	320
Mortgage and asset-backed debt securities	—		82		—		82
Corporate debt securities	—		1,835		—		1,835
Other debt, equity and investment securities	—		555		—		555
Total marketable securities	320		2,472		—		2,792
Other non-current investments	19		—		48		67
Total	$	339	$	2,472	$	48	$	2,859



December 31, 2014:
Marketable Securities:
U.S. government and agency debt securities	$	321	$	—	$	—	$	321
Mortgage and asset-backed debt securities	—		89		—		89
Corporate debt securities	—		534		—		534
Other debt, equity and investment securities	—		48		—		48
Total marketable securities	321		671		—		992
Other non-current investments	19		—		64		83
Total	$	340	$	671	$	64	$	1,075

Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation




	Marketable Securities		Other Investments			Total
Balance on January 1, 2015	$	—	64			64
Transfers into (out of) Level 3	—		—			—
Net realized and unrealized gains (losses):
Included in earnings (in investment income)	—		(16		)	(16		)
Included in accumulated other comprehensive income (pre-tax)	—		—			—
Purchases	—		—			—
Sales	—		—			—
Balance on June 30, 2015	$	—	$	48		$	48

	Marketable Securities		Other Investments			Total
Balance on January 1, 2014	$	—	110			110
Transfers into (out of) Level 3	—		—			—
Net realized and unrealized gains (losses):
Included in earnings (in investment income)	—		(15		)	(15		)
Included in accumulated other comprehensive income (pre-tax)	—		—			—
Purchases	—		—			—
Sales	—		—			—
Balance on June 30, 2014	$	—	$	95		$	95

The following table presents the changes in the above Level 3 instruments measured on a recurring basis for the three months ended June 30, 2015 and 2014 (in millions):



	Marketable Securities		Other Non-Current Investments			Total
Balance on April 1, 2015	$	—	$	56		$	56
Transfers into (out of) Level 3	—		—			—
Net realized and unrealized gains (losses):
Included in earnings (in investment income)	—		(8		)	(8		)
Included in accumulated other comprehensive income (pre-tax)	—		—			—
Purchases	—		—			—
Sales	—		—			—
Balance on June 30, 2015	$	—	$	48		$	48




	Marketable Securities		Other Non-Current Investments			Total
Balance on April 1, 2014	$	—	$	99		$	99
Transfers into (out of) Level 3	—		—			—
Net realized and unrealized gains (losses):
Included in earnings (in investment income)	—		(4		)	(4		)
Included in accumulated other comprehensive income (pre-tax)	—		—			—
Purchases	—		—			—
Sales	—		—			—
Balance on June 30, 2014	$	—	$	95		$	95

- Definition

Tabular disclosure of available-for-sale securities which includes, but is not limited to, changes in the cost basis and fair value, fair value and gross unrealized gain (loss), fair values by type of security, contractual maturity and classification, amortized cost basis, contracts to acquire securities to be accounted for as available-for-sale, debt maturities, transfers to trading, change in net unrealized holding gain (loss) net of tax, continuous unrealized loss position fair value, aggregate losses qualitative disclosures, other than temporary impairment (OTTI) losses or other disclosures related to available for sale securities.

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