INVESTMENTS AND RESTRICTED CASH
|12 Months Ended|
Dec. 31, 2021
|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, 2021 and 2020 (in millions):
Total current marketable securities that were pledged as collateral for our self-insurance requirements had an estimated fair value of $336 and $404 million as of December 31, 2021 and 2020, respectively.
The gross realized gains on sales of available-for-sale marketable securities totaled $7, $5 and $8 million in 2021, 2020 and 2019, respectively. The gross realized losses on sales of available-for-sale marketable securities totaled $2, $0 and $2 million in 2021, 2020 and 2019, respectively.
There were no material impairment losses recognized on marketable securities during 2021, 2020 or 2019.
We have concluded that no material impairment losses existed as of December 31, 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.
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, 2021 (in millions):
The unrealized losses for the U.S. government and agency 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.
The amortized cost and estimated fair value of marketable securities as of December 31, 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.
Non-Current Investments and Restricted Cash
We hold an investment in a variable life insurance policy to fund benefits for the UPS Excess Coordinating Benefit Plan. The investment had a fair market value of $23 million as of both December 31, 2021 and 2020. Changes in investment fair value are recognized in Investment income (expense) and other in the statements of consolidated income. Additionally, we held cash in escrow related to the acquisition and disposition of certain assets of $3 and $2 million as of December 31, 2021 and 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):
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, 2021 and 2020, and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value (in millions):
There were no material transfers of investments between Level 1 and Level 2 during 2021 or 2020.
Disclosure of cash, cash equivalents and investments
No definition available.
No definition available.