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UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
70
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
Of the total estimated fair value in marketable securities listed above, $430 million as of December 31, 2014 was
classified as "trading", with unrealized gains and losses recognized in investment income within the statements of consolidated
income (no amounts were classified as "trading" as of December 31, 2013). The remaining estimated fair value of marketable
securities was classified as "available-for-sale", with related unrealized gains and losses, net of tax, recognized in AOCI.
The gross realized gains on sales of marketable securities totaled $1, $11 and $15 million in 2014, 2013, and 2012,
respectively. The gross realized losses totaled $0, $6 and $6 million in 2014, 2013, and 2012, respectively. There were no
impairment losses recognized on marketable securities during 2014, 2013 or 2012.
Investment Other-Than-Temporary Impairments
We have concluded that no other-than-temporary impairment losses existed as of December 31, 2014. In making this
determination, we considered the financial condition and prospects of the issuer, the magnitude of the losses compared with the
investments’ cost, the probability that we will be unable to collect all amounts due according to the contractual terms of the
security, the credit rating of the security and our ability and intent to hold these investments until the anticipated recovery in
market value occurs.
Unrealized Losses
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)
The unrealized losses for the U.S. government and agency debt securities and mortgage and asset-backed debt securities
are primarily due to changes in market interest rates. We have both the intent and ability to hold the securities contained in the
previous table for a time necessary to recover the cost basis.