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UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table presents information about our assets and liabilities measured at fair value on a
recurring basis as of December 31, 2008, 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 as of
December 31,
2008
Assets
Marketable securities ...................... $133 $437 $216 $ 786
Derivative contracts ....................... — 242 — 242
Other investments ......................... — — 331 331
Total ............................... $133 $679 $547 $1,359
Liabilities
Derivative contracts ....................... $— $389 $— $ 389
Total ............................... $— $389 $— $ 389
The following table presents the changes in Level 3 instruments measured on a recurring basis for the year
ended December 31, 2008 (in millions).
Marketable
Securities
Other
Investments Total
Balance on January 1, 2008 .......................................... $ 10 $363 $373
Transfers into (out of) Level 3 ........................................ 347 — 347
Net realized and unrealized gains (losses):
Included in earnings (in investment income) ......................... (20) (32) (52)
Included in accumulated other comprehensive income (pre-tax) .......... (71) — (71)
Purchases, issuances, and settlements .................................. (50) — (50)
Balance on December 31, 2008 ....................................... $216 $331 $547
NOTE 17. RESTRUCTURING COSTS AND RELATED EXPENSES
In connection with recent acquisitions and integration initiatives, we have incurred restructuring costs
associated with the termination of employees, facility consolidations and other costs directly related to the
restructuring initiatives implemented. These costs have resulted from the integration of our Menlo Worldwide
Forwarding and Lynx acquisitions as well as restructuring activities associated with our Supply Chain Solutions
operations. For specific restructuring costs recognized in conjunction with the cost from acquisitions, we have
accounted for these costs in accordance with EITF 95-3, “Recognition of Liabilities Assumed in Connection with
a Purchase Business Combination.” All other restructuring costs have been accounted for in accordance with
SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal Activities” and SFAS No. 144,
“Accounting for the Impairment or Disposal of Long-Lived Assets.”
Lynx Express Ltd.
In conjunction with our integration of the Lynx business, in 2006 we implemented a series of initiatives to
reduce operating costs and maximize the efficiencies of the UPS network in the United Kingdom. These
initiatives included closing existing hubs and constructing a consolidated sorting facility as well as establishing a
95