Annual report pursuant to Section 13 and 15(d)

MARKETABLE SECURITIES AND NON-CURRENT INVESTMENTS

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MARKETABLE SECURITIES AND NON-CURRENT INVESTMENTS
 12 Months Ended
Dec. 31, 2023
Investments, Debt and Equity Securities [Abstract]  
MARKETABLE SECURITIES AND NON-CURRENT INVESTMENTS MARKETABLE SECURITIES AND NON-CURRENT INVESTMENTS
The following is a summary of marketable securities classified as trading and available-for-sale as of December 31, 2023 and 2022 (in millions):
Cost Unrealized
Gains		 Unrealized
Losses		 Estimated
Fair Value
2023
Current trading marketable securities:
Equity securities $ 4  $ —  $ —  $ 4 
Total trading marketable securities 4  —  —  4 
Current available-for-sale marketable securities:
U.S. government and agency debt securities 963  2  (4) 961 
Mortgage and asset-backed debt securities 3  —  —  3 
Corporate debt securities 1,891  4  (4) 1,891 
U.S. state and local municipal debt securities —  —  —  — 
Non-U.S. government debt securities 7  —  —  7 
Total available-for-sale marketable securities 2,864  6  (8) 2,862 
Total current marketable securities $ 2,868  $ 6  $ (8) $ 2,866 
Cost Unrealized
Gains		 Unrealized
Losses		 Estimated
Fair Value
2022
Current trading marketable securities:
Equity securities $ 2  $ —  $ —  $ 2 
Total trading marketable securities 2  —  —  2 
Current available-for-sale marketable securities:
U.S. government and agency debt securities 355  —  (8) 347 
Mortgage and asset-backed debt securities 9  —  —  9 
Corporate debt securities 1,472  —  (6) 1,466 
U.S. state and local municipal debt securities 4  —  —  4 
Non-U.S. government debt securities 165  —  —  165 
Total available-for-sale marketable securities 2,005  —  (14) 1,991 
Total current marketable securities $ 2,007  $ —  $ (14) $ 1,993 
Total current marketable securities that were pledged as collateral for our self-insurance requirements had estimated fair values of $343 and $333 million as of December 31, 2023 and 2022, respectively.
The gross realized gains on sales of available-for-sale marketable securities totaled $1, $0 and $7 million in 2023, 2022 and 2021, respectively. The gross realized losses on sales of available-for-sale marketable securities totaled $4, $3 and $2 million in 2023, 2022 and 2021, respectively.
There were no material impairment losses recognized on marketable securities during 2023, 2022 or 2021.
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, 2023 (in millions):
Less Than 12 Months 12 Months or More Total
Fair Value
Unrealized Losses
 Fair Value
Unrealized Losses
 Fair Value
Unrealized Losses
U.S. government and agency debt securities $ 508  $ (1) $ 191  $ (3) $ 699  $ (4)
Corporate debt securities 751  (2) 475  (2) 1,226  (4)
Total marketable securities $ 1,259  $ (3) $ 666  $ (5) $ 1,925  $ (8)
Maturity Information
The amortized cost and estimated fair value of marketable securities as of December 31, 2023 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 $ 1,346  $ 1,343 
Due after one year through three years 1,513  1,514 
Due after three years through five years 5  5 
Due after five years —  — 
2,864  2,862 
Equity securities 4  4 
$ 2,868  $ 2,866 
Non-Current Investments
We hold non-current investments that are reported within Other Non-Current Assets in our consolidated balance sheets. Cash paid for these investments, excluding investments obtained through business acquisitions, is included in Other investing activities in our statements of consolidated cash flows.
•Equity method investments: As of December 31, 2023 and 2022, equity securities accounted for under the equity method had a carrying value of $295 and $256 million, respectively. In 2023, we obtained an equity method investment as part of our acquisition of MNX Global Logistics. See note 8 for further discussion of business acquisitions. Cash paid for this investment is included in Acquisitions, net of cash acquired in our statement of consolidated cash flows. In 2022, we invested $252 million in the parent company of CommerceHub, Inc., a software provider connecting retailers and brands with marketplaces, drop ship solutions and delivery providers. We determined there is no amortizable basis difference between the purchase price for our investment and the underlying books and records of the investee.
•Other equity securities: Certain equity securities that do not have readily determinable fair values are reported in accordance with the measurement alternative in Accounting Standards Codification Topic 321 Investments – Equity Securities. As of December 31, 2023 and 2022, we had equity securities of $47 and $31 million, respectively, accounted for under the measurement alternative.
•Other investments: 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 $19 and $18 million as of December 31, 2023 and 2022, respectively.
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, 2023 and 2022, 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
2023
Marketable Securities:
U.S. government and agency debt securities $ 961  $ —  $ —  $ 961 
Mortgage and asset-backed debt securities —  3  —  3 
Corporate debt securities —  1,891  —  1,891 
U.S. state and local municipal debt securities —  —  —  — 
Equity securities —  4  —  4 
Non-U.S. government debt securities —  7  —  7 
Total marketable securities 961  1,905  —  2,866 
Other non-current investments(1)
—  19  —  19 
Total $ 961  $ 1,924  $ —  $ 2,885 
(1)Represents a variable life insurance policy funding benefits for the UPS Excess Coordinating Benefit Plan.
  Quoted Prices in
Active Markets 
for Identical
Assets
(Level 1)		 Significant Other
Observable Inputs
(Level 2)		 Significant
Unobservable
Inputs
(Level 3)		 Total
2022
Marketable Securities:
U.S. government and agency debt securities $ 279  $ 68  $ —  $ 347 
Mortgage and asset-backed debt securities —  9  —  9 
Corporate debt securities —  1,466  —  1,466 
U.S. state and local municipal debt securities —  4  —  4 
Equity securities —  2  —  2 
Non-U.S. government debt securities —  165  —  165 
Total marketable securities 279  1,714  —  1,993 
Other non-current investments(1)
—  18  —  18 
Total $ 279  $ 1,732  $ —  $ 2,011 
(1)Represents a variable life insurance policy funding benefits for the UPS Excess Coordinating Benefit Plan.
There were no transfers of investments into or out of Level 3 during 2023 or 2022.