Investments

12 Months Ended

Dec. 31, 2019

The following tables summarize the unrealized gains and losses and estimated fair value of our investments classified as available-for-sale as of December 31, 2019 and 2018 (in millions):



	December 31, 2019
	Gross Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Short-term investments:
Restricted cash	$	21	$	—	$	—	$	21
Corporate debt securities	1,653		1		—		1,654
Government and agency securities	175		—		—		175
	$	1,849	$	1	$	—	$	1,850
Long-term investments:
Corporate debt securities	957		4		—		961
	$	957	$	4	$	—	$	961



	December 31, 2018
	Gross Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Short-term investments:
Restricted cash	$	17	$	—	$	—		$	17
Corporate debt securities	2,615		—		(9		)	2,606
Government and agency securities	90		—		—			90
	$	2,722	$	—	$	(9	)	$	2,713
Long-term investments:
Corporate debt securities	3,682		1		(48		)	3,635
	$	3,682	$	1	$	(48	)	$	3,635

Restricted cash is held primarily in interest bearing accounts for letters of credit primarily related to our global sabbatical program and various lease arrangements. Our fixed-income investments consist of predominantly investment grade corporate debt securities and government and agency securities. The corporate debt and government and agency securities that we invest in are generally deemed to be low risk based on their credit ratings from the major rating agencies.

The longer the duration of these securities, the more susceptible they are to changes in market interest rates and bond yields. As interest rates increase, those securities purchased at a lower yield show a mark-to-market unrealized loss. The unrealized losses are due primarily to changes in credit spreads and interest rates. We regularly review investment securities for other-than-temporary impairment using both qualitative and quantitative criteria. We presently do not intend to sell any of the securities in an unrealized loss position and expect to realize the full value of all these investments upon maturity or sale.

Investment securities in a continuous loss position for less than 12 months had an estimated fair value of $774 million and an immaterial amount of unrealized losses as of December 31, 2019, and an estimated fair value of $2.9 billion and an immaterial amount of unrealized losses as of December 31, 2018. Investment securities in a continuous loss position for greater than 12 months had an estimated fair value of $92 million and an immaterial amount of unrealized losses as of December 31, 2019 and an estimated fair value of $2.7 billion and unrealized losses of $41 million December 31, 2018. As of December 31, 2019, these securities had a weighted average remaining maturity of approximately 2 months. Refer to “Note 17 – Accumulated Other Comprehensive Income” for amounts reclassified to earnings from unrealized gains and losses.

The estimated fair values of our short-term and long-term investments classified as available-for-sale by date of contractual maturity as of December 31, 2019 are as follows (in millions):



	December 31, 2019
One year or less (including restricted cash of $21)	$	1,850
One year through two years	676
Two years through three years	198
Three years through four years	87
Total	$	2,811

Equity Investments

Our equity investments are reported in long-term investments on our consolidated balance sheet. The following table provides a summary of our equity investments as of December 31, 2019 and December 31, 2018 (in millions):



	December 31, 2019		December 31, 2018
Equity investments without readily determinable fair values	$	337	$	137
Equity investments under the equity method of accounting	18		6
Total equity investments	$	355	$	143

In 2019, we invested $160 million in cash in exchange for an equity interest in Paytm Mall and $40 million in other investments. These investments are accounted for as equity investments without readily determinable fair value.

In 2018, we sold our investment in Flipkart and relinquished our existing equity method investment in Giosis as part of the exchange for the acquisition of Giosis’ Japan business. The $313 million gain upon sale of our investment in Flipkart and the $266 million gain upon relinquishment of our equity method investment in Giosis were recorded in interest and other, net on our consolidated statement of income. Refer to “Note 3 – Business Combinations” for further details on the Giosis acquisition.

In 2017, we made a cost method investment of $50 million. In addition, we received a 5.44% ownership interest in Flipkart in exchange for our eBay India business and a $500 million cash investment, resulting in an investment of $725 million accounted for as an equity investment without readily determinable fair value. The gain on disposal of our eBay India business of $167 million was recorded in interest and other, net on our consolidated statement of income. In addition, we recorded a $61 million impairment charge to write-down our cost method investment in Jasper Infotech Private Limited (“Snapdeal”). The investment was measured at fair value due to events and circumstances that we identified as having significant impact on its fair value. The fair value measurement of the impaired investment was measured using significant unobservable inputs. The impairment charge, representing the difference between the net book value and the fair value, was recorded to interest and other, net.

The following table summarizes the total carrying value of equity investments without readily determinable fair values during the twelve months ended December 31, 2019 and December 31, 2018 (in millions):



	Year Ended December 31, 2019		Year Ended December 31, 2018
Carrying value, beginning of period	$	137	$	872
Additions	200		23
Sales	—		(718		)
Downward adjustments for observable price changes and impairment	—		(20		)
Foreign currency translation and other	—		(20		)
Carrying value, end of period	$	337	$	137

For such equity investments without readily determinable fair values still held at December 31, 2019, cumulative downward adjustments for price changes and impairment was $81 million. As of December 31, 2019, there have been no upward adjustments for price changes to our equity investments without readily determinable fair values.