XML 30 R9.htm IDEA: XBRL DOCUMENT v3.20.4
INVESTMENTS AND RESTRICTED CASH
 12 Months Ended
Dec. 31, 2020
Investments and Cash [Abstract]  
INVESTMENTS AND RESTRICTED CASH INVESTMENTS AND RESTRICTED CASH
The following is a summary of marketable securities classified as trading and available-for-sale as of December 31, 2020 and 2019 (in millions):
CostUnrealized
Gains		Unrealized
Losses		Estimated
Fair Value
2020
Current trading marketable securities:
Corporate debt securities$— $— $— $— 
Equity securities2 — — 2 
Total trading marketable securities2 — — 2 
Current available-for-sale marketable securities:
U.S. government and agency debt securities181 3 — 184 
Mortgage and asset-backed debt securities30 1 — 31 
Corporate debt securities174 4 — 178 
Non-U.S. government debt securities11 — — 11 
Total available-for-sale marketable securities396 8 — 404 
Total current marketable securities$398 $8 $— $406 
CostUnrealized
Gains		Unrealized
Losses		Estimated
Fair Value
2019
Current trading marketable securities:
Corporate debt securities$112 $— $— $112 
Equity securities2 — — 2 
Total trading marketable securities114 — — 114 
Current available-for-sale marketable securities:
U.S. government and agency debt securities191 2 — 193 
Mortgage and asset-backed debt securities46 1 — 47 
Corporate debt securities130 3 — 133 
Non-U.S. government debt securities16 — — 16 
Total available-for-sale marketable securities383 6 — 389 
Total current marketable securities$497 $6 $— $503 
Total current marketable securities that were pledged as collateral for our self-insurance requirements had an estimated fair value of $404 and $389 million as of December 31, 2020 and 2019, respectively.
The gross realized gains on sales of available-for-sale marketable securities totaled $5 and $8 million in 2020 and 2019, respectively. There were no gross realized gains on sales of available-for-sale marketable securities in 2018. The gross realized losses on sales of available-for-sale marketable securities totaled $0, $2 and $4 million in 2020, 2019 and 2018, respectively.
There were no material impairment losses recognized on marketable securities during 2020, 2019 or 2018.
Investment Impairments
We have concluded that no material impairment losses existed as of December 31, 2020. In making this determination, we considered the financial condition and prospects of each issuer, the magnitude of the losses compared with the 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, 2020 (in millions):
Less Than 12 Months12 Months or MoreTotal
Fair ValueUnrealized LossesFair ValueUnrealized LossesFair ValueUnrealized Losses
U.S. government and agency debt securities$31 $— $— $— $31 $— 
Mortgage and asset-backed debt securities— — 1 — 1 — 
Corporate debt securities16 — — — 16 — 
Non-U.S. government debt securities— — — — — — 
Total marketable securities$47 $— $1 $— $48 $— 
The unrealized losses for the U.S. government and agency debt securities, mortgage and asset-backed debt securities, and corporate debt securities are primarily due to changes in market interest rates. We have both the intent and ability to hold these securities for the time necessary to recover the cost basis.
Maturity Information
The amortized cost and estimated fair value of marketable securities as of December 31, 2020, 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 with or without prepayment penalties.
 
CostEstimated
Fair Value
Due in one year or less$27 $27 
Due after one year through three years323 327 
Due after three years through five years10 10 
Due after five years36 40 
396 404 
Equity securities2 2 
$398 $406 

Non-Current Investments and Restricted Cash
We previously held various marketable securities and cash equivalents as collateral under an escrow agreement to guarantee our self-insurance obligations which were reflected in "Cash, Cash Equivalents and Restricted Cash" in the statements of consolidated cash flows. In 2019 we fully liquidated our investment balance associated with this agreement and pledged the required collateral with a surety bond. For additional information on surety bonds written as of December 31, 2020, see note 9.
We held a $23 and $21 million investment in a variable life insurance policy to fund benefits for the UPS Excess Coordinating Benefit Plan as of December 31, 2020 and 2019, respectively. The change in investment fair value is recognized in "Investment income (expense) and other" in the statements of consolidated income. Additionally, we held escrowed cash related to the acquisition and disposition of certain assets of $2 and $3 million as of December 31, 2020 and 2019, respectively. These amounts are classified as “Investments and Restricted Cash” in the consolidated balance sheets.
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):
December 31, 2020December 31, 2019December 31, 2018
Cash and cash equivalents$5,910 $5,238 $4,225 
Restricted cash— — 142 
Total cash, cash equivalents and restricted cash$5,910 $5,238 $4,367 
Fair Value Measurements
Marketable securities valued utilizing Level 1 inputs include active exchange-traded equity securities and equity index funds, and most U.S. government debt securities, as these securities all have quoted prices in active markets. Marketable securities valued utilizing Level 2 inputs include asset-backed securities, corporate bonds and municipal bonds. These securities are valued using market corroborated pricing, matrix pricing or other models that utilize observable inputs such as yield curves.
The following table presents information about our investments measured at fair value on a recurring basis as of December 31, 2020 and 2019, 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)		Total
2020
Marketable Securities:
U.S. government and agency debt securities$184 $— $— $184 
Mortgage and asset-backed debt securities— 31 — 31 
Corporate debt securities— 178 — 178 
Equity securities— 2 — 2 
Non-U.S. government debt securities— 11 — 11 
Total marketable securities184 222 — 406 
Other non-current investments23 — — 23 
Total$207 $222 $— $429 
 Quoted Prices in
Active Markets 
for Identical
Assets
(Level 1)		Significant Other
Observable Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)		Total
2019
Marketable Securities:
U.S. government and agency debt securities$193 $— $— $193 
Mortgage and asset-backed debt securities— 47 — 47 
Corporate debt securities— 245 — 245 
Equity securities— 2 — 2 
Non-U.S. government debt securities— 16 — 16 
Total marketable securities193 310 — 503 
Other non-current investments21 — 1 22 
Total$214 $310 $1 $525 
There were no transfers of investments between Level 1 and Level 2 during 2020 or 2019.