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)

9 Months Ended

Sep. 30, 2015

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



	Cost		Unrealized Gains		Unrealized Losses			Estimated Fair Value
September 30, 2015:
Current trading marketable securities:
Corporate debt securities	$	1,049	$	—	$	—		$	1,049
Other investment securities	410		36		—			446
Total trading marketable securities	$	1,459	$	36	$	—		$	1,495

Current available-for-sale marketable securities:
U.S. government and agency debt securities	$	327	$	2	$	—		$	329
Mortgage and asset-backed debt securities	77		—		—			77
Corporate debt securities	339		1		(1		)	339
Other investment securities	8		—		—			8
Total available-for-sale marketable securities	$	751	$	3	$	(1	)	$	753

Total current marketable securities	$	2,210	$	39	$	(1	)	$	2,248

	Cost		Unrealized Gains		Unrealized Losses			Estimated Fair Value
December 31, 2014:
Current trading marketable securities:
Corporate debt securities	$	388	$	—	$	—		$	388
Other investment securities	42		—		—			42
Total trading marketable securities	$	430	$	—	$	—		$	430

Current available-for-sale 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	146		—		—			146
Other investment securities	6		—		—			6
Total available-for-sale marketable securities	$	562	$	2	$	(2	)	$	562

Total current marketable securities	$	992	$	2	$	(2	)	$	992

Investments Classified by Contractual Maturity Date

The amortized cost and estimated fair value of marketable securities at September 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	$	1,423	$	1,423
Due after one year through three years	420		421
Due after three years through five years	14		15
Due after five years	71		71
	1,928		1,930
Equity and other investment securities	282		318
	$	2,210	$	2,248

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 September 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
September 30, 2015:
Marketable Securities:
U.S. government and agency debt securities	$	329	$	—	$	—	$	329
Mortgage and asset-backed debt securities	—		77		—		77
Corporate debt securities	—		1,388		—		1,388
Other debt, equity and investment securities	—		454		—		454
Total marketable securities	329		1,919		—		2,248
Other non-current investments	19		—		40		59
Total	$	348	$	1,919	$	40	$	2,307



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

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



	Marketable Securities		Other Non-Current Investments			Total
Balance on July 1, 2015	$	—	$	48		$	48
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 September 30, 2015	$	—	$	40		$	40




	Marketable Securities		Other Non-Current Investments			Total
Balance on July 1, 2014	$	—	$	95		$	95
Transfers into (out of) Level 3	—		—			—
Net realized and unrealized gains (losses):
Included in earnings (in investment income)	—		(11		)	(11		)
Included in accumulated other comprehensive income (pre-tax)	—		—			—
Purchases	—		—			—
Sales	—		—			—
Balance on September 30, 2014	$	—	$	84		$	84




	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)	—		(24		)	(24		)
Included in accumulated other comprehensive income (pre-tax)	—		—			—
Purchases	—		—			—
Sales	—		—			—
Balance on September 30, 2015	$	—	$	40		$	40

	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)	—		(26		)	(26		)
Included in accumulated other comprehensive income (pre-tax)	—		—			—
Purchases	—		—			—
Sales	—		—			—
Balance on September 30, 2014	$	—	$	84		$	84