United Parcel Service, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

CASH AND INVESTMENTS (Tables)

CASH AND INVESTMENTS (Tables)

3 Months Ended

Mar. 31, 2013

The following is a summary of marketable securities classified as available-for-sale as of March 31, 2013 and December 31, 2012 (in millions):



	Cost		Unrealized Gains		Unrealized Losses			Estimated Fair Value
March 31, 2013
Current marketable securities:
U.S. government and agency debt securities	$	240	$	1	$	—		$	241
Mortgage and asset-backed debt securities	141		2		—			143
Corporate debt securities	417		4		—			421
U.S. state and local municipal debt securities	15		—		—			15
Other debt and equity securities	56		1		(1		)	56
Total marketable securities	$	869	$	8	$	(1	)	$	876

	Cost		Unrealized Gains		Unrealized Losses			Estimated Fair Value
December 31, 2012
Current marketable securities:
U.S. government and agency debt securities	$	236	$	2	$	—		$	238
Mortgage and asset-backed debt securities	171		3		—			174
Corporate debt securities	158		5		—			163
U.S. state and local municipal debt securities	15		—		—			15
Other debt and equity securities	7		—		—			7
Total marketable securities	$	587	$	10	$	—		$	597

Investments Classified by Contractual Maturity Date

The amortized cost and estimated fair value of marketable securities at March 31, 2013, 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	$	340	$	341
Due after one year through three years	247		248
Due after three years through five years	59		59
Due after five years	221		226
	867		874
Equity securities	2		2
	$	869	$	876

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, 2013 and December 31, 2012, 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, 2013
Marketable Securities:
U.S. government and agency debt securities	$	240	$	1	$	—	$	241
Mortgage and asset-backed debt securities	—		143		—		143
Corporate debt securities	—		421		—		421
U.S. state and local municipal debt securities	—		15		—		15
Other debt and equity securities	—		56		—		56
Total marketable securities	240		636		—		876
Other investments	19		—		150		169
Total	$	259	$	636	$	150	$	1,045



	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance
December 31, 2012
Marketable Securities:
U.S. government and agency debt securities	$	237	$	1	$	—	$	238
Mortgage and asset-backed debt securities	—		174		—		174
Corporate debt securities	—		163		—		163
U.S. state and local municipal debt securities	—		15		—		15
Other debt and equity securities	—		7		—		7
Total marketable securities	237		360		—		597
Other investments	19		—		163		182
Total	$	256	$	360	$	163	$	779

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



	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)	—		(13		)	(13		)
Included in accumulated other comprehensive income (pre-tax)	—		—			—
Purchases	—		—			—
Sales	—		—			—
Balance on March 31, 2013	$	—	$	150		$	150

	Marketable Securities		Other Investments			Total
Balance on January 1, 2012	$	—	$	217		$	217
Transfers into (out of) Level 3	—		—			—
Net realized and unrealized gains (losses):
Included in earnings (in investment income)	—		(13		)	(13		)
Included in accumulated other comprehensive income (pre-tax)	—		—			—
Purchases	—		—			—
Sales	—		—			—
Balance on March 31, 2012	$	—	$	204		$	204

The following table presents the changes in the above Level 3 instruments measured on a recurring basis for the three months ended March 31, 2013 and 2012 (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)	—		(13		)	(13		)
Included in accumulated other comprehensive income (pre-tax)	—		—			—
Purchases	—		—			—
Sales	—		—			—
Balance on March 31, 2013	$	—	$	150		$	150

	Marketable Securities		Other Investments			Total
Balance on January 1, 2012	$	—	$	217		$	217
Transfers into (out of) Level 3	—		—			—
Net realized and unrealized gains (losses):
Included in earnings (in investment income)	—		(13		)	(13		)
Included in accumulated other comprehensive income (pre-tax)	—		—			—
Purchases	—		—			—
Sales	—		—			—
Balance on March 31, 2012	$	—	$	204		$	204

- 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.

+ References

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+ Details

- Definition

Tabular disclosure of assets, including [financial] instruments measured at fair value that are classified in stockholders' equity, if any, by class that are measured at fair value on a recurring basis. The disclosures contemplated herein include the fair value measurements at the reporting date by the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3).

+ References + Details

- 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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