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)

3 Months Ended

Mar. 31, 2015

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



	Cost		Unrealized Gains		Unrealized Losses			Estimated Fair Value
March 31, 2015
Current marketable securities:
U.S. government and agency debt securities	$	315	$	1	$	—		$	316
Mortgage and asset-backed debt securities	88		1		—			89
Corporate debt securities	1,016		2		—			1,018
Other debt, equity and investment securities	511		3		(2		)	512
Total marketable securities	$	1,930	$	7	$	(2	)	$	1,935

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 March 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	$	1,267	$	1,267
Due after one year through three years	422		423
Due after three years through five years	15		16
Due after five years	103		105
	1,807		1,811
Equity and other investment securities	123		124
	$	1,930	$	1,935

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 March 31, 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
March 31, 2015
Marketable Securities:
U.S. government and agency debt securities	$	316	$	—	$	—	$	316
Mortgage and asset-backed debt securities	—		89		—		89
Corporate debt securities	—		1,018		—		1,018
Other debt, equity and investment securities	—		512		—		512
Total marketable securities	316		1,619		—		1,935
Other non-current investments	19		—		56		75
Total	$	335	$	1,619	$	56	$	2,010



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 Non-Current 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)	—		(11		)	(11		)
Included in accumulated other comprehensive income (pre-tax)	—		—			—
Purchases	—		—			—
Sales	—		—			—
Balance on March 31, 2014	$	—	$	99		$	99

- 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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- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

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