United Parcel Service, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

CASH AND INVESTMENTS (Tables)

CASH AND INVESTMENTS (Tables)

12 Months Ended

Dec. 31, 2015

Schedule of Unrealized Loss on Investments [Table Text Block]

The following table presents the age of gross unrealized losses and fair value by investment category for all securities in a loss position as of December 31, 2015 (in millions):



	Less Than 12 Months					12 Months or More					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
U.S. government and agency debt securities	$	168	$	(1	)	$	—	$	—		$	168	$	(1	)
Mortgage and asset-backed debt securities	—		—			28		(1		)	28		(1		)
Corporate debt securities	—		—			50		(1		)	50		(1		)
U.S. state and local municipal debt securities	—		—			—		—			—		—
Equity securities	—		—			—		—			—		—
Non-U.S. government debt securities	—		—			—		—			—		—
Carbon credit investments	189		(5		)	—		—			189		(5		)
Other investment securities	—		—			—		—			—		—
Total marketable securities	$	357	$	(6	)	$	78	$	(2	)	$	435	$	(8	)

Summary of Marketable Securities

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



	Cost		Unrealized Gains		Unrealized Losses			Estimated Fair Value
2015
Current trading marketable securities:
Corporate debt securities	$	715	$	—	$	—		$	715
Non-U.S. government debt securities	363		—		—			363
Carbon credit investments	347		9		(5		)	351
Total trading marketable securities	1,425		9		(5		)	1,429

Current available-for-sale marketable securities:
U.S. government and agency debt securities	$	341	$	—	$	(1	)	$	340
Mortgage and asset-backed debt securities	74		1		(1		)	74
Corporate debt securities	147		—		(1		)	146
U.S. state and local municipal debt securities	2		—		—			2
Equity securities	2		—		—			2
Non-U.S. government debt securities	3		—		—			3
Total available-for-sale marketable securities	569		1		(3		)	567

Total current marketable securities	$	1,994	$	10	$	(8	)	$	1,996

	Cost		Unrealized Gains		Unrealized Losses			Estimated Fair Value
2014
Current trading marketable securities:
Corporate debt securities	$	388	$	—	$	—		$	388
Non-U.S. government debt securities	42		—		—			42
Carbon credit investments	—		—		—			—
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
U.S. state and local municipal debt securities	2		—		—			2
Equity securities	3		—		—			3
Non-U.S. government debt securities	1		—		—			1
Total available-for-sale marketable securities	562		2		(2		)	562

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

Amortized Cost and Estimated Fair Value of Marketable Securities by Contractual Maturity

The amortized cost and estimated fair value of marketable securities at December 31, 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	$	1,131	$	1,131
Due after one year through three years	425		423
Due after three years through five years	14		15
Due after five years	75		74
	1,645		1,643
Equity and other investment securities	349		353
	$	1,994	$	1,996

Investments Measured at Fair Value on a Recurring Basis

The following table presents information about our investments measured at fair value on a recurring basis as of December 31, 2015 and 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)		Total
2015
Marketable securities:
U.S. government and agency debt securities	$	340	$	—	$	—	$	340
Mortgage and asset-backed debt securities	—		74		—		74
Corporate debt securities	—		861		—		861
U.S. state and local municipal debt securities	—		2		—		2
Equity securities	—		2		—		2
Non-U.S. government debt securities	—		366		—		366
Carbon credit investments	351		—		—		351
Total marketable securities	691		1,305		—		1,996
Other non-current investments	19		—		32		51
Total	$	710	$	1,305	$	32	$	2,047

	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
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
U.S. state and local municipal debt securities	—		2		—		2
Equity securities	—		2		—		2
Non-U.S. government debt securities	—		44		—		44
Total marketable securities	321		671		—		992
Other investments	19		—		64		83
Total	$	340	$	671	$	64	$	1,075

Changes in Level 3 Instruments Measured on a Recurring Basis

The following table presents the changes in the above Level 3 instruments measured on a recurring basis for the years ended December 31, 2015 and 2014 (in millions).



	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)	—		(46		)	(46		)
Included in accumulated other comprehensive income (pre-tax)	—		—			—
Purchases	—		—			—
Settlements	—		—			—
Balance on December 31, 2014	$	—	$	64		$	64
Transfers into (out of) Level 3	—		—			—
Net realized and unrealized gains (losses):
Included in earnings (in investment income)	—		(32		)	(32		)
Included in accumulated other comprehensive income (pre-tax)	—		—			—
Purchases	—		—			—
Settlements	—		—			—
Balance on December 31, 2015	$	—	$	32		$	32