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Cash and Cash Equivalents and Investments in Marketable Securities
 12 Months Ended
Mar. 31, 2024
Marketable Securities [Abstract]  
Cash and Cash Equivalents and Investments in Marketable Securities

Note 2 – Cash and Cash Equivalents and Investments in Marketable Securities

Cash and cash equivalents

Cash and cash equivalents represent highly liquid investments with maturities of three months or less from the date of acquisition and may include money market instruments, commercial paper, certificates of deposit, U.S. government and agency obligations, or similar instruments.

Restricted cash and cash equivalents

Restricted cash and cash equivalents include customer collections on securitized receivables to be distributed to investors as payments on the related secured notes and loans payable, which are primarily related to securitization trusts. Restricted cash equivalents may also contain proceeds from certain debt issuances for which the use of the cash is restricted.

Investments in marketable securities

Investments in marketable securities consist of debt securities and equity investments.

We classify all of our debt securities as available-for-sale (“AFS”). Except when the fair value option is elected, AFS debt securities are recorded at fair value with unrealized gains or losses included in accumulated other comprehensive income (“AOCI”), net of applicable taxes. Interest income is recognized on an accrual basis and determined using the effective interest method. Realized gains and losses from sales of AFS debt securities are determined using the specific identification method or first in first out method. Dividend income, interest income, and realized gains and losses from the sales of AFS debt securities are included in Investment and other income (loss), net in our Consolidated Statements of Income.

We elected the fair value option for certain debt securities held within one of our investment portfolios for operational ease given the size and composition of this portfolio. All debt securities within this specific portfolio are recorded at fair value with changes in fair value included in Investment and other income (loss), net in our Consolidated Statements of Income. AFS debt securities for which the fair value option is elected are not subject to credit loss impairment evaluation. As of March 31, 2024 and 2023, we held AFS debt securities for which the fair value option was elected of $778 million and $770 million, respectively. The difference between the aggregate fair value and the aggregate unpaid principal balance of AFS debt securities for which the fair value option was elected was an unrealized loss of $70 million and $57 million as of March 31, 2024 and 2023, respectively.

All equity investments are recorded at fair value with changes in fair value included in Investment and other income (loss), net in our Consolidated Statements of Income. Realized gains and losses from sales of equity investments are determined using the first in first out method and are included in Investment and other income (loss), net in our Consolidated Statements of Income.

Note 2 – Cash and Cash Equivalents and Investments in Marketable Securities (Continued)

Investments in marketable securities consisted of the following:

 

 

 

March 31, 2024

 

 

 

Amortized

 

 

Unrealized

 

 

Unrealized

 

 

Fair

 

 

 

cost

 

 

gains

 

 

losses

 

 

value

 

Available-for-sale debt securities:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. government and agency obligations

 

$

783

 

 

$

1

 

 

$

(87

)

 

$

697

 

Foreign government and agency obligations

 

 

13

 

 

 

-

 

 

 

(1

)

 

 

12

 

Municipal debt securities

 

 

8

 

 

 

-

 

 

 

(1

)

 

 

7

 

Corporate debt securities

 

 

477

 

 

 

2

 

 

 

(49

)

 

 

430

 

Mortgage-backed securities:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. government agency

 

 

123

 

 

 

-

 

 

 

(5

)

 

 

118

 

Non-agency residential

 

 

12

 

 

 

-

 

 

 

(1

)

 

 

11

 

Non-agency commercial

 

 

64

 

 

 

-

 

 

 

(9

)

 

 

55

 

Asset-backed securities

 

 

142

 

 

 

1

 

 

 

(5

)

 

 

138

 

Total available-for-sale debt securities

 

$

1,622

 

 

$

4

 

 

$

(158

)

 

$

1,468

 

Equity investments

 

 

 

 

 

 

 

 

 

 

 

3,037

 

Total investments in marketable securities

 

 

 

 

 

 

 

 

 

 

$

4,505

 

 

 

 

March 31, 2023

 

 

 

Amortized

 

 

Unrealized

 

 

Unrealized

 

 

Fair

 

 

 

cost

 

 

gains

 

 

losses

 

 

value

 

Available-for-sale debt securities:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. government and agency obligations

 

$

796

 

 

$

7

 

 

$

(59

)

 

$

744

 

Foreign government and agency obligations

 

 

14

 

 

 

-

 

 

 

(2

)

 

 

12

 

Municipal debt securities

 

 

8

 

 

 

1

 

 

 

(1

)

 

 

8

 

Corporate debt securities

 

 

487

 

 

 

2

 

 

 

(59

)

 

 

430

 

Mortgage-backed securities:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. government agency

 

 

76

 

 

 

-

 

 

 

(3

)

 

 

73

 

Non-agency residential

 

 

10

 

 

 

-

 

 

 

(1

)

 

 

9

 

Non-agency commercial

 

 

66

 

 

 

-

 

 

 

(8

)

 

 

58

 

Asset-backed securities

 

 

127

 

 

 

-

 

 

 

(7

)

 

 

120

 

Total available-for-sale debt securities

 

$

1,584

 

 

$

10

 

 

$

(140

)

 

$

1,454

 

Equity investments

 

 

 

 

 

 

 

 

 

 

 

3,583

 

Total investments in marketable securities

 

 

 

 

 

 

 

 

 

 

$

5,037

 

A portion of our equity investments are investments in funds that are privately placed and managed by an open-end investment management company (the “Trust”). If we elect to redeem shares, the Trust will normally redeem all shares for cash, but may, in unusual circumstances, redeem amounts exceeding the lesser of $250 thousand or 1 percent of the Trust’s asset value by payment in kind of securities held by the respective fund during any 90-day period.

We also invest in actively traded open-end mutual funds. Redemptions are subject to normal terms and conditions as described in each fund’s prospectus.

We had no non-cash investing activities related to in kind redemption in fiscal 2024 and 2023. Non-cash investing activities related to in kind redemptions and subsequent purchases amounted to $1.1 billion in fiscal 2022.

 

Note 2 – Cash and Cash Equivalents and Investments in Marketable Securities (Continued)

Unrealized Losses on Securities

The following table presents the aggregate fair value and unrealized losses on AFS debt securities in a continuous unrealized loss position:

 

 

 

March 31, 2024

 

 

 

Less than 12 months

 

 

12 months or longer

 

 

Total

 

Available-for-sale debt securities:

 

Fair value

 

 

Unrealized losses

 

 

Fair value

 

 

Unrealized losses

 

 

Fair value

 

 

Unrealized losses

 

U.S. government and agency obligations

 

$

317

 

 

$

(13

)

 

$

336

 

 

$

(74

)

 

$

653

 

 

$

(87

)

Foreign government and agency obligations

 

 

1

 

 

 

-

 

 

 

8

 

 

 

(1

)

 

 

9

 

 

 

(1

)

Municipal debt securities

 

 

-

 

 

 

-

 

 

 

2

 

 

 

(1

)

 

 

2

 

 

 

(1

)

Corporate debt securities

 

 

31

 

 

 

(3

)

 

 

339

 

 

 

(46

)

 

 

370

 

 

 

(49

)

Mortgage-backed securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Government agency

 

 

51

 

 

 

(1

)

 

 

49

 

 

 

(4

)

 

 

100

 

 

 

(5

)

Non-agency residential

 

 

1

 

 

 

-

 

 

 

7

 

 

 

(1

)

 

 

8

 

 

 

(1

)

Non-agency commercial

 

 

1

 

 

 

-

 

 

 

53

 

 

 

(9

)

 

 

54

 

 

 

(9

)

Asset-backed securities

 

 

17

 

 

 

-

 

 

 

58

 

 

 

(5

)

 

 

75

 

 

 

(5

)

Total available-for-sale debt securities

 

$

419

 

 

$

(17

)

 

$

852

 

 

$

(141

)

 

$

1,271

 

 

$

(158

)

 

 

 

March 31, 2023

 

 

 

Less than 12 months

 

 

12 months or longer

 

 

Total

 

Available-for-sale debt securities:

 

Fair value

 

 

Unrealized losses

 

 

Fair value

 

 

Unrealized losses

 

 

Fair value

 

 

Unrealized losses

 

U.S. government and agency obligations

 

$

90

 

 

$

(3

)

 

$

304

 

 

$

(56

)

 

$

394

 

 

$

(59

)

Foreign government and agency obligations

 

 

-

 

 

 

-

 

 

 

11

 

 

 

(2

)

 

 

11

 

 

 

(2

)

Municipal debt securities

 

 

-

 

 

 

-

 

 

 

2

 

 

 

(1

)

 

 

2

 

 

 

(1

)

Corporate debt securities

 

 

46

 

 

 

(2

)

 

 

352

 

 

 

(57

)

 

 

398

 

 

 

(59

)

Mortgage-backed securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Government agency

 

 

38

 

 

 

(1

)

 

 

17

 

 

 

(2

)

 

 

55

 

 

 

(3

)

Non-agency residential

 

 

-

 

 

 

-

 

 

 

8

 

 

 

(1

)

 

 

8

 

 

 

(1

)

Non-agency commercial

 

 

-

 

 

 

-

 

 

 

57

 

 

 

(8

)

 

 

57

 

 

 

(8

)

Asset-backed securities

 

 

47

 

 

 

(1

)

 

 

59

 

 

 

(6

)

 

 

106

 

 

 

(7

)

Total available-for-sale debt securities

 

$

221

 

 

$

(7

)

 

$

810

 

 

$

(133

)

 

$

1,031

 

 

$

(140

)

An allowance for credit losses is established when it is determined that a credit loss has occurred. As of March 31, 2024 and 2023, management determined credit losses for securities in an unrealized loss position were not significant. This analysis considered a variety of factors including, but not limited to, performance indicators of the issuer, default rates, industry analyst reports, credit ratings, and other relevant information.

Gains and Losses on Securities

The following table represents gains and losses on our investments in marketable securities presented in our Consolidated Statements of Income:

 

 

 

 

 

 

 

 

 

 

Years ended March 31,

 

 

 

2024

 

 

2023

 

 

2022

 

Available-for-sale debt securities:

 

 

 

 

 

 

 

 

 

Unrealized losses on securities for which the fair value option was elected 1

 

$

(13

)

 

$

(17

)

 

$

(41

)

Realized losses on sales

 

$

(1

)

 

$

(38

)

 

$

(4

)

 

 

 

 

 

 

 

 

 

 

Equity investments:

 

 

 

 

 

 

 

 

 

Unrealized gains (losses)

 

$

296

 

 

$

(297

)

 

$

(158

)

Realized (losses) gains on sales

 

$

(137

)

 

$

(23

)

 

$

22

 
1.
Starting in fiscal 2022, we elected the fair value option for certain debt securities.

Note 2 – Cash and Cash Equivalents and Investments in Marketable Securities (Continued)

Contractual Maturities

The amortized cost and fair value by contractual maturities of available-for-sale debt securities are summarized in the following table. Actual maturities may differ from contractual maturities because certain borrowers have the right to call or prepay certain obligations.

 

 

 

March 31, 2024

 

 

 

Amortized cost

 

 

Fair value

 

Available-for-sale debt securities:

 

 

 

 

 

 

Due within 1 year

 

$

52

 

 

$

51

 

Due after 1 year through 5 years

 

 

309

 

 

 

293

 

Due after 5 years through 10 years

 

 

471

 

 

 

442

 

Due after 10 years

 

 

449

 

 

 

360

 

Mortgage-backed and asset-backed securities 1

 

 

341

 

 

 

322

 

Total

 

$

1,622

 

 

$

1,468

 
1.
Mortgage-backed and asset-backed securities are shown separately from other maturity groupings as these securities have multiple maturity dates.