XML 16 R11.htm IDEA: XBRL DOCUMENT
v3.20.1

Valuation of debt and equity investments and certain liabilities | 3 Months Ended
--- | ---
Mar. 31, 2020
Fair Value Disclosures [Abstract] |
Valuation of debt and equity investments and certain liabilities | Valuation of debt and equity investments and certain liabilities Investments measured at fair value Available-for-sale debt investments and trading securities are stated at fair value, which is generally based on market prices or broker quotes. See Fair-value considerations below. Unrealized gains and losses from available-for-sale debt securities are recorded as an increase or decrease, net of taxes, in AOCI on our Consolidated Balance Sheets and any credit losses on available-for-sale debt securities are recorded as an allowance for credit losses with an offset recognized in OI&E in our Consolidated Statements of Income. We classify certain mutual funds as trading securities. These mutual funds hold a variety of debt and equity investments intended to generate returns that offset changes in certain deferred compensation liabilities. We record changes in the fair value of these mutual funds and the related deferred compensation liabilities in SG&A. Other investments Our other investments include equity-method investments and non-marketable equity investments, which are not measured at fair value. These investments consist of interests in venture capital funds and other non-marketable equity securities. Gains and losses from equity-method investments are recognized in OI&E based on our ownership share of the investee’s financial results. Non-marketable equity securities are measured at cost with adjustments for observable changes in price or impairments. Gains and losses on non-marketable equity investments are recognized in OI&E. Details of our investments are as follows:
| March 31, 2020 |  |  |  |  |  | December 31, 2019 |  |  |  |
| Cash and Cash Equivalents |  | Short-Term Investments |  | Long-Term Investments |  | Cash and Cash Equivalents |  | Short-Term Investments |  | Long-Term Investments
Measured at fair value: |  |  |  |  |  |  |  |  |  |  |
Available-for-sale debt securities: |  |  |  |  |  |  |  |  |  |  |
Money market funds | $ | 1,912 |  |  | $ | — |  |  | $ | — |  |  | $ | 1,213 |  |  | $ | — |  |  | $ | — |
Corporate obligations | 102 |  |  | 899 |  |  | — |  |  | 174 |  |  | 1,216 |  |  | — |
U.S. government agency and Treasury securities | 150 |  |  | 1,325 |  |  | — |  |  | 604 |  |  | 1,734 |  |  | — |
Trading securities: |  |  |  |  |  |  |  |  |  |  |
Mutual funds | — |  |  | — |  |  | 14 |  |  | — |  |  | — |  |  | 272 |
Total | 2,164 |  |  | 2,224 |  |  | 14 |  |  | 1,991 |  |  | 2,950 |  |  | 272 |
Other measurement basis: |  |  |  |  |  |  |  |  |  |  |
Equity-method investments | — |  |  | — |  |  | 16 |  |  | — |  |  | — |  |  | 24 |
Non-marketable equity investments | — |  |  | — |  |  | 4 |  |  | — |  |  | — |  |  | 4 |
Cash on hand | 354 |  |  | — |  |  | — |  |  | 446 |  |  | — |  |  | — |
Total | $ | 2,518 |  |  | $ | 2,224 |  |  | $ | 34 |  |  | $ | 2,437 |  |  | $ | 2,950 |  |  | $ | 300 |
As of March 31, 2020 and December 31, 2019, unrealized gains and losses associated with our available-for-sale investments were not material. We did not recognize any credit losses related to available-for-sale investments for the first three months of 2020 and 2019. Proceeds from sales, redemptions and maturities of short-term available-for-sale investments were $1.39 billion and $1.58 billion for the first quarters of 2020 and 2019, respectively. Gross realized gains and losses from these sales were not material. The following table presents the aggregate maturities of our available-for-sale debt investments as of March 31, 2020:
| Fair Value
One year or less | $ | 4,368 |
One to two years | 20 |
During the first quarter of 2020, we entered into total return swaps to economically hedge the variability of certain deferred compensation obligations to employees. As a result, we received proceeds of $253 million from the sale of investments in mutual funds that were previously being utilized to offset this exposure. Fair-value considerations We measure and report certain financial assets and liabilities at fair value on a recurring basis. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The three-level hierarchy described below indicates the extent and level of judgment used to estimate fair-value measurements. •Level 1 – Uses unadjusted quoted prices that are available in active markets for identical assets or liabilities as of the reporting date. •Level 2 – Uses inputs other than Level 1 that are either directly or indirectly observable as of the reporting date through correlation with market data, including quoted prices for similar assets and liabilities in active markets and quoted prices in markets that are not active. Level 2 also includes assets and liabilities that are valued using models or other pricing methodologies that do not require significant judgment since the input assumptions used in the models, such as interest rates and volatility factors, are corroborated by readily observable data. We utilize a third-party data service to provide Level 2 valuations. We verify these valuations for reasonableness relative to unadjusted quotes obtained from brokers or dealers based on observable prices for similar assets in active markets. •Level 3 – Uses inputs that are unobservable, supported by little or no market activity and reflect the use of significant management judgment. These values are generally determined using pricing models that utilize management estimates of market participant assumptions. As of March 31, 2020 and December 31, 2019, we had no Level 3 assets or liabilities. The following are our assets and liabilities that were accounted for at fair value on a recurring basis. These tables do not include cash on hand, assets held by our postretirement plans, or assets and liabilities that are measured at historical cost or any basis other than fair value.
| March 31, 2020 |  |  |  |  |  | December 31, 2019 |  |  |  |
| Level 1 |  | Level 2 |  | Total |  | Level 1 |  | Level 2 |  | Total
Assets: |  |  |  |  |  |  |  |  |  |  |
Money market funds | $ | 1,912 |  |  | $ | — |  |  | $ | 1,912 |  |  | $ | 1,213 |  |  | $ | — |  |  | $ | 1,213 |
Corporate obligations | — |  |  | 1,001 |  |  | 1,001 |  |  | — |  |  | 1,390 |  |  | 1,390 |
U.S. government agency and Treasury securities | 1,475 |  |  | — |  |  | 1,475 |  |  | 2,338 |  |  | — |  |  | 2,338 |
Mutual funds | 14 |  |  | — |  |  | 14 |  |  | 272 |  |  | — |  |  | 272 |
Total assets | $ | 3,401 |  |  | $ | 1,001 |  |  | $ | 4,402 |  |  | $ | 3,823 |  |  | $ | 1,390 |  |  | $ | 5,213 |
Liabilities: |  |  |  |  |  |  |  |  |  |  |
Deferred compensation | $ | 251 |  |  | $ | — |  |  | $ | 251 |  |  | $ | 298 |  |  | $ | — |  |  | $ | 298 |
Total liabilities | $ | 251 |  |  | $ | — |  |  | $ | 251 |  |  | $ | 298 |  |  | $ | — |  |  | $ | 298 |

X
- References No definition available. + Details
Name: | us-gaap_FairValueDisclosuresAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure of the fair value measurement of assets and liabilities, which includes financial instruments measured at fair value that are classified in shareholders' equity, which may be measured on a recurring or nonrecurring basis. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -URI http://asc.fasb.org/topic&trid=2155941 + Details
Name: | us-gaap_FairValueMeasurementInputsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration