Quarterly report pursuant to Section 13 or 15(d)

MARKETABLE SECURITIES AND NON-CURRENT INVESTMENTS

v3.23.3
MARKETABLE SECURITIES AND NON-CURRENT INVESTMENTS
 9 Months Ended
Sep. 30, 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 September 30, 2023 and December 31, 2022 (in millions):
Cost Unrealized
Gains		 Unrealized
Losses		 Estimated
Fair Value
September 30, 2023:
Current trading marketable securities:
Equity securities $ 4  $ —  $ —  $ 4 
Total trading marketable securities 4  —  —  4 
Current available-for-sale securities:
U.S. government and agency debt securities 980  —  (12) 968 
Mortgage and asset-backed debt securities 7  —  —  7 
Corporate debt securities 1,962  —  (17) 1,945 
U.S. state and local municipal debt securities 2  —  —  2 
Non-U.S. government debt securities 41  —  —  41 
Total available-for-sale marketable securities 2,992  —  (29) 2,963 
Total current marketable securities $ 2,996  $ —  $ (29) $ 2,967 
  Cost Unrealized
Gains		 Unrealized
Losses		 Estimated
Fair Value
December 31, 2022:
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 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 
Investment Impairments
We have concluded that no material impairment losses existed as of September 30, 2023. 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, 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 $ 1,469  $ 1,464 
Due after one year through three years 1,515  1,491 
Due after three years through five years 8  8 
Due after five years —  — 
2,992  2,963 
Equity securities 4  4 
$ 2,996  $ 2,967 
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 is included in Other investing activities in our statements of consolidated cash flows.
•Equity method investments: As of September 30, 2023 and December 31, 2022, equity securities accounted for under the equity method had a carrying value of $249 and $256 million, respectively.
•Other equity securities: Certain equity securities that do not have readily determinable fair values are reported in accordance with the measurement alternative in ASC Topic 321 Investments - Equity Securities. As of September 30, 2023 and December 31, 2022, we held equity securities accounted for using the measurement alternative of $33 and $31 million, respectively.
•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 $18 million as of both September 30, 2023 and December 31, 2022.
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, 2023 and December 31, 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 
September 30, 2023:
Marketable Securities:
U.S. government and agency debt securities $ 968  $ —  $ —  $ 968 
Mortgage and asset-backed debt securities —  7  —  7 
Corporate debt securities —  1,945  —  1,945 
U.S. state and local municipal debt securities —  2  —  2 
Equity securities —  4  —  4 
Non-U.S. government debt securities —  41  —  41 
Total marketable securities 968  1,999  —  2,967 
Other non-current investments(1)
—  18  —  18 
Total $ 968  $ 2,017  $ —  $ 2,985 
(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
December 31, 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 the nine months ended September 30, 2023 or 2022.