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, 2014

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, 2014 (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	$	147	$	(1	)	$	—	$	—		$	147	$	(1	)
Mortgage and asset-backed debt securities	—		—			21		(1		)	21		(1		)
Corporate debt securities	—		—			—		—			—		—
U.S. state and local municipal debt securities	—		—			—		—			—		—
Other debt and equity securities	—		—			—		—			—		—
Total marketable securities	$	147	$	(1	)	$	21	$	(1	)	$	168	$	(2	)

Summary of Marketable Securities

The following is a summary of marketable securities classified as trading and available-for-sale at December 31, 2014 and 2013 (in millions):



	Cost		Unrealized Gains		Unrealized Losses			Estimated Fair Value
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
U.S. state and local municipal debt securities	2		—		—			2
Other debt and equity securities	46		—		—			46
Total marketable securities	$	992	$	2	$	(2	)	$	992



	Cost		Unrealized Gains		Unrealized Losses			Estimated Fair Value
2013
Current marketable securities:
U.S. government and agency debt securities	$	355	$	—	$	(1	)	$	354
Mortgage and asset-backed debt securities	76		1		(2		)	75
Corporate debt securities	146		1		(1		)	146
U.S. state and local municipal debt securities	2		—		—			2
Other debt and equity securities	3		—		—			3
Total marketable securities	$	582	$	2	$	(4	)	$	580

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, 2014, 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	$	459	$	459
Due after one year through three years	439		439
Due after three years through five years	15		15
Due after five years	77		77
	990		990
Equity securities	2		2
	$	992	$	992

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, 2014 and 2013, 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
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
Other debt and equity securities	—		46		—		46
Total marketable securities	321		671		—		992
Other investments	19		—		64		83
Total	$	340	$	671	$	64	$	1,075

	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
2013
Marketable securities:
U.S. government and agency debt securities	$	353	$	1	$	—	$	354
Mortgage and asset-backed debt securities	—		75		—		75
Corporate debt securities	—		146		—		146
U.S. state and local municipal debt securities	—		2		—		2
Other debt and equity securities	—		3		—		3
Total marketable securities	353		227		—		580
Other investments	19		—		110		129
Total	$	372	$	227	$	110	$	709

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, 2014 and 2013 (in millions).



	Marketable Securities		Other Investments			Total
Balance on January 1, 2013	$	—	$	163		$	163
Transfers into (out of) Level 3	—		—			—
Net realized and unrealized gains (losses):
Included in earnings (in investment income)	—		(53		)	(53		)
Included in accumulated other comprehensive income (pre-tax)	—		—			—
Purchases	—		—			—
Settlements	—		—			—
Balance on December 31, 2013	$	—	$	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

- 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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- Definition

Tabular disclosure of marketable securities. This may consist of investments in certain debt and equity securities, short-term investments and other assets.

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