Quarterly report pursuant to Section 13 or 15(d)

CASH AND INVESTMENTS

v3.21.2
CASH AND INVESTMENTS
 9 Months Ended
Sep. 30, 2021
Marketable Securities [Abstract]  
CASH AND INVESTMENTS CASH AND INVESTMENTS
The following is a summary of marketable securities classified as trading and available-for-sale as of September 30, 2021 and December 31, 2020 (in millions):
Cost Unrealized
Gains		 Unrealized
Losses		 Estimated
Fair Value
September 30, 2021:
Current trading marketable securities:
Equity securities $ 2  $ —  $ —  $ 2 
Total trading marketable securities 2  —  —  2 
Current available-for-sale securities:
U.S. government and agency debt securities 222  1  —  223 
Mortgage and asset-backed debt securities —  —  —  — 
Corporate debt securities 113  2  —  115 
U.S. state and local municipal debt securities 5  —  —  5 
Non-U.S. government debt securities 3  —  —  3 
Total available-for-sale marketable securities 343  3  —  346 
Total current marketable securities $ 345  $ 3  $ —  $ 348 
  Cost Unrealized
Gains		 Unrealized
Losses		 Estimated
Fair Value
December 31, 2020:
Current trading marketable securities:
Equity securities $ 2  $ —  $ —  $ 2 
Total trading marketable securities 2  —  —  2 
Current available-for-sale securities:
U.S. government and agency debt securities 181  3  —  184 
Mortgage and asset-backed debt securities 30  1  —  31 
Corporate debt securities 174  4  —  178 
U.S. state and local municipal debt securities —  —  —  — 
Non-U.S. government debt securities 11  —  —  11 
Total available-for-sale marketable securities 396  8  —  404 
Total current marketable securities $ 398  $ 8  $ —  $ 406 
Investment Impairments
We have concluded that no material impairment losses existed as of September 30, 2021. 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.
Maturity Information
The amortized cost and estimated fair value of marketable securities as of September 30, 2021 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.
Cost Estimated
Fair Value
Due in one year or less $ 35  $ 35 
Due after one year through three years 306  309 
Due after three years through five years 2  2 
Due after five years —  — 
343  346 
Equity securities 2  2 
$ 345  $ 348 
Non-Current Investments and Restricted Cash
We held a $23 million investment in a variable life insurance policy to fund benefits for the UPS Excess Coordinating Benefit Plan as of both September 30, 2021 and December 31, 2020. The change in investment fair value is recognized in Investment income and other in the statements of consolidated income. Additionally, we held escrowed cash related to the acquisition and disposition of certain assets of $1 million and $2 million as of September 30, 2021 and December 31, 2020, 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):
September 30,
2021		 December 31, 2020 September 30,
2020
Cash and cash equivalents $ 10,212  $ 5,910  $ 8,839 
Restricted cash —  —  1 
Total cash, cash equivalents and restricted cash $ 10,212  $ 5,910  $ 8,840 
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 September 30, 2021 and December 31, 2020, 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 
September 30, 2021:
Marketable Securities:
U.S. government and agency debt securities $ 217  $ 6  $ —  $ 223 
Mortgage and asset-backed debt securities —  —  —  — 
Corporate debt securities —  115  —  115 
U.S. state and local municipal debt securities —  5  —  5 
Equity securities —  2  —  2 
Non-U.S. government debt securities —  3  —  3 
Total marketable securities 217  131  —  348 
Other non-current investments 23  —  —  23 
Total $ 240  $ 131  $ —  $ 371 
December 31, 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 
U.S. state and local municipal debt securities —  —  —  — 
Equity securities —  2  —  2 
Non-U.S. government debt securities —  11  —  11 
Total marketable securities 184  222  —  406 
Other non-current investments 23  —  —  23 
Total $ 207  $ 222  $ —  $ 429 
There were no transfers of investments between Level 1 and Level 2 during the nine months ended September 30, 2021 or 2020.