Financial Instruments

3 Months Ended

Mar. 31, 2020

Investments, Debt and Equity Securities [Abstract]

FINANCIAL INSTRUMENTS

Cash, Cash Equivalents, Restricted Cash, and Marketable Securities

As of December 31, 2019 and March 31, 2020, our cash, cash equivalents, restricted cash, and marketable securities primarily consisted of cash, AAA-rated money market funds, U.S. and foreign government and agency securities, and other investment grade securities. Cash equivalents and marketable securities are recorded at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value:

Level 1—Valuations based on quoted prices for identical assets and liabilities in active markets.

Level 2—Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.

Level 3—Valuations based on unobservable inputs reflecting our own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment.

We measure the fair value of money market funds and certain marketable equity securities based on quoted prices in active markets for identical assets or liabilities. Other marketable securities were valued either based on recent trades of securities in inactive markets or based on quoted market prices of similar instruments and other significant inputs derived from or corroborated by observable market data. We did not hold significant amounts of cash, cash equivalents, restricted cash, or marketable securities categorized as Level 3 assets as of December 31, 2019 and March 31, 2020.

The following table summarizes, by major security type, our cash, cash equivalents, restricted cash, and marketable securities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy (in millions):



	December 31, 2019			March 31, 2020
	Total Estimated Fair Value			Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Total Estimated Fair Value
Cash	$	9,776		$	8,363	$	—	$	—		$	8,363
Level 1 securities:
Money market funds	18,850			16,260		—		—			16,260
Equity securities (1)	202										174
Level 2 securities:
Foreign government and agency securities	4,794			3,467		—		(1		)	3,466
U.S. government and agency securities	7,080			4,295		51		(1		)	4,345
Corporate debt securities	11,881			13,957		41		(205		)	13,793
Asset-backed securities	2,360			2,868		3		(51		)	2,820
Other fixed income securities	394			375		2		(1		)	376
Equity securities (1)	5										2
	$	55,342		$	49,585	$	97	$	(259	)	$	49,599
Less: Restricted cash, cash equivalents, and marketable securities (2)	(321		)								(307		)
Total cash, cash equivalents, and marketable securities	$	55,021									$	49,292

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(1)	The related unrealized gain (loss) recorded in “Other income (expense), net” was $68 million and $(31) million in Q1 2019 and Q1 2020.

(2)

We are required to pledge or otherwise restrict a portion of our cash, cash equivalents, and marketable securities as collateral for real estate leases, amounts due to third-party sellers in certain jurisdictions, debt, and standby and trade letters of credit. We classify cash, cash equivalents, and marketable securities with use restrictions of less than twelve months as “Accounts receivable, net and other” and of twelve months or longer as non-current “Other assets” on our consolidated balance sheets. See “Note 4 — Commitments and Contingencies.”

The following table summarizes the remaining contractual maturities of our cash equivalents and marketable fixed income securities as of March 31, 2020 (in millions):



	Amortized Cost		Estimated Fair Value
Due within one year	$	26,936	$	26,935
Due after one year through five years	11,645		11,498
Due after five years through ten years	533		527
Due after ten years	2,108		2,100
Total	$	41,222	$	41,060

Actual maturities may differ from the contractual maturities because borrowers may have certain prepayment conditions.

Equity Warrants and Non-Marketable Equity Investments

We hold equity warrants giving us the right to acquire stock of other companies. As of December 31, 2019 and March 31, 2020, these warrants had a fair value of $669 million and $528 million, and are recorded within “Other assets” on our consolidated balance sheets. These assets are primarily classified as Level 2 assets.

As of December 31, 2019 and March 31, 2020, equity investments not accounted for under the equity-method and without readily determinable fair values, had a carrying value of $1.5 billion, and are recorded within “Other assets” on our consolidated balance sheets with adjustments recognized in “Other income (expense), net” on our consolidated statements of operations.

Consolidated Statements of Cash Flows Reconciliation

The following table provides a reconciliation of the amount of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets to the total of the same such amounts shown in the consolidated statements of cash flows (in millions):



	December 31, 2019		March 31, 2020
Cash and cash equivalents	$	36,092	$	27,201
Restricted cash included in accounts receivable, net and other	276		282
Restricted cash included in other assets	42		22
Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows	$	36,410	$	27,505