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 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 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. Realized gains and losses from sales of AFS debt securities are determined using the specific identification method or first in first out method and are included in Investment and other income, net in our Consolidated Statements of Income.

In fiscal 2021, we adopted ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, on a modified retrospective basis. Under the new guidance, an allowance for credit losses is established when it is determined that a credit loss has occurred. Prior to the adoption of this standard, when a decline in fair value of a debt security was determined to be other-than-temporary, an impairment charge for the credit component was recorded in Investment and other income, net and a new cost basis in the investment was established. As of March 31, 2022, management determined that credit losses did not exist for securities in an unrealized loss position. 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, which indicated that contractual cash flows are expected to occur.

In fiscal 2022, we have elected the fair value option for certain debt securities held within one of our affiliate 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, 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. As of March 31, 2022, we held AFS debt securities for which the fair value option was elected of $674 million. The difference between the aggregate fair value and the aggregate unpaid principal balance of long-term AFS debt securities for which the fair value option was elected was not significant.

All equity investments are recorded at fair value with changes in fair value included in Investment and other income, 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, net in our Consolidated Statements of Income.

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

	March 31, 2022
	Amortized		Unrealized		Unrealized			Fair
	cost		gains		losses			value
Available-for-sale debt securities:
U.S. government and agency obligations	$	538	$	-	$	(29	)	$	509
Foreign government and agency obligations		26		-		(3	)		23
Municipal debt securities		9		1		-			10
Corporate debt securities		598		4		(34	)		568
Mortgage-backed securities:
U.S. government agency		20		-		-			20
Non-agency residential		11		-		(1	)		10
Non-agency commercial		88		1		(3	)		86
Asset-backed securities		82		-		(4	)		78
Total available-for-sale debt securities	$	1,372	$	6	$	(74	)	$	1,304
Equity investments									3,649
Total investments in marketable securities								$	4,953

	March 31, 2021
	Amortized		Unrealized		Unrealized			Fair
	cost		gains		losses			value
Available-for-sale debt securities:
U.S. government and agency obligations	$	217	$	4	$	(10	)	$	211
Municipal debt securities		8		2		-			10
Commercial paper		196		-		-			196
Corporate debt securities		177		12		(2	)		187
Mortgage-backed securities:
U.S. government agency		31		1		-			32
Non-agency residential		1		-		-			1
Non-agency commercial		47		2		(2	)		47
Asset-backed securities		49		3		-			52
Total available-for-sale debt securities	$	726	$	24	$	(14	)	$	736
Equity investments									4,084
Total investments in marketable securities								$	4,820

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.

Non-cash investing activities related to in-kind redemptions and subsequent purchases amounted to $1.1 billion in fiscal 2022. We had no non-cash investing activities related to in-kind redemptions in fiscal 2021.

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

Available-for-sale debt securities in a continuous loss position for greater than twelve months were not significant as of March 31, 2022 and 2021.

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


	Years ended March 31,
	2022			2021		2020
Available-for-sale debt securities:
Unrealized losses on securities for which the fair value option was elected	$	(41	)
Realized (losses) gains on sales	$	(4	)	$	20	$	9
Other-than-temporary impairment						$	(8	)

Equity investments:
Unrealized (losses) gains	$	(158	)	$	114	$	41
Realized gains on sales	$	22		$	15	$	5

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, 2022
	Amortized cost		Fair value
Available-for-sale debt securities:
Due within 1 year	$	53	$	53
Due after 1 year through 5 years		378		367
Due after 5 years through 10 years		381		360
Due after 10 years		359		330
Mortgage-backed and asset-backed securities ¹		201		194
Total	$	1,372	$	1,304