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, 2018

The following is a summary of marketable securities classified as trading and available-for-sale as of June 30, 2018 and December 31, 2017 (in millions):



	Cost		Unrealized Gains		Unrealized Losses			Estimated Fair Value
June 30, 2018:
Current trading marketable securities:
Corporate debt securities	$	75	$	—	$	—		$	75
Equity securities	2		—		—			2
Total trading marketable securities	77		—		—			77

Current available-for-sale securities:
U.S. government and agency debt securities	306		1		(4		)	303
Mortgage and asset-backed debt securities	86		—		(1		)	85
Corporate debt securities	243		—		(2		)	241
Non-U.S. government debt securities	14		—		—			14
Total available-for-sale marketable securities	649		1		(7		)	643

Total current marketable securities	$	726	$	1	$	(7	)	$	720

	Cost		Unrealized Gains		Unrealized Losses			Estimated Fair Value
December 31, 2017:
Current trading marketable securities:
Corporate debt securities	$	75	$	—	$	—		$	75
Carbon credit investments ⁽¹⁾	77		16		—			93
Total trading marketable securities	152		16		—			168

Current available-for-sale securities:
U.S. government and agency debt securities	286		—		(3		)	283
Mortgage and asset-backed debt securities	86		—		—			86
Corporate debt securities	201		1		(1		)	201
Equity securities	2		—		—			2
Non-U.S. government debt securities	9		—		—			9
Total available-for-sale marketable securities	584		1		(4		)	581

Total current marketable securities	$	736	$	17	$	(4	)	$	749
⁽¹⁾ These investments are hedged with forward contracts that are not designated in hedging relationships. See Note 14 for offsetting statement of consolidated income impact.

Investments Classified by Contractual Maturity Date

The amortized cost and estimated fair value of marketable securities at June 30, 2018, 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	$	193	$	193
Due after one year through three years	434		430
Due after three years through five years	24		23
Due after five years	73		72
	724		718
Equity securities	2		2
	$	726	$	720

Cash and Cash Equivalents and Restricted Cash

A reconciliation of cash and cash equivalents and restricted cash from the consolidated balance sheets to the statements of consolidated cash flows is shown below (in millions):



	June 30, 2018		December 31, 2017		June 30, 2017
Cash and cash equivalents	$	4,214	$	3,320	$	3,544
Restricted cash	277		449		447
Total cash, cash equivalents and restricted cash	$	4,491	$	3,769	$	3,991

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, 2018 and December 31, 2017, 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, 2018:
Marketable Securities:
U.S. government and agency debt securities	$	303	$	—	$	—	$	303
Mortgage and asset-backed debt securities	—		85		—		85
Corporate debt securities	—		316		—		316
Equity securities	—		2		—		2
Non-U.S. government debt securities	—		14		—		14
Total marketable securities	303		417		—		720
Other non-current investments	19		—		2		21
Total	$	322	$	417	$	2	$	741



December 31, 2017:
Marketable Securities:
U.S. government and agency debt securities	$	283	$	—	$	—	$	283
Mortgage and asset-backed debt securities			86		—		86
Corporate debt securities	—		276		—		276
Equity securities	—		2		—		2
Non-U.S. government debt securities	—		9		—		9
Carbon credit investments	93		—		—		93
Total marketable securities	376		373		—		749
Other non-current investments	19		—		6		25
Total	$	395	$	373	$	6	$	774

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

There were no transfers of investments between Level 1 and Level 2 during the three and six months ended June 30, 2018 and 2017.