UPS 2007 Annual Report Download - page 75

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UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
beginning after December 15, 2007, and we will adopt the provisions of EITF 06-11 beginning in the first quarter
of 2008. EITF 06-11 is not expected to have a material impact on our results of operations or financial condition.
In December 2007 the FASB issued Statement No. 141(R) “Business Combinations” (“FAS 141(R)”). FAS
141(R) requires the acquiring entity in a business combination to recognize the full fair value of assets acquired
and liabilities assumed in the transaction (whether a full or partial acquisition); establishes the acquisition-date
fair value as the measurement objective for all assets acquired and liabilities assumed; requires expensing of most
transaction and restructuring costs; and requires the acquirer to disclose to investors and other users all of the
information needed to evaluate and understand the nature and financial effect of the business combination. FAS
141(R) applies prospectively to business combinations for which the acquisition date is on or after January 1,
2009. The impact of FAS No. 141R on our consolidated financial statements will depend upon the nature, terms
and size of the acquisitions we consummate after the effective date.
In December 2007, the FASB issued FAS No. 160, “Noncontrolling Interests in Consolidated Financial
Statements—an amendment of Accounting Research Bulletin No. 51” (“FAS 160”). FAS 160 requires reporting
entities to present noncontrolling (minority) interests as equity (as opposed to as a liability or mezzanine equity)
and provides guidance on the accounting for transactions between an entity and noncontrolling interests. As of
December 31, 2007, we had approximately $13 million in noncontrolling interests classified in other non-current
liabilities. FAS 160 applies prospectively as of January 1, 2009, except for the presentation and disclosure
requirements which will be applied retrospectively for all periods presented.
Changes in Presentation
Certain prior year amounts have been reclassified to conform to the current year presentation.
NOTE 2. MARKETABLE SECURITIES AND SHORT-TERM INVESTMENTS
The following is a summary of marketable securities and short-term investments classified as
available-for-sale at December 31, 2007 and 2006 (in millions):
Cost
Unrealized
Gains
Unrealized
Losses
Estimated
Fair Value
2007
U.S. government and agency securities ......................... $ 59 $ 2 $— $ 61
U.S. mortgage and asset-backed securities ....................... 251 2 2 251
U.S. corporate securities ..................................... 152 2 — 154
U.S. state and local municipal securities ........................ 4 — — 4
Other debt securities ........................................ 2 — — 2
Total debt securities .................................... 468 6 2 472
Common equity securities ................................... 2 — — 2
Preferred equity securities ................................... 103 — — 103
Current marketable securities and short-term investments ........... 573 6 2 577
Non-current common equity securities .......................... 25 8 — 33
Total marketable securities and short-term investments ............ $598 $ 14 $ 2 $610
F-12