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v3.19.1

Investments | 3 Months Ended
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Mar. 31, 2019
Investments, Debt and Equity Securities [Abstract] |
Investments | Investments Available-for-sale investments The amortized cost, gross unrealized gains, gross unrealized losses and fair values of interest-bearing securities, which are considered available-for-sale, by type of security were as follows (in millions):
Types of securities as of March 31, 2019 |  | Amortized cost |  | Gross unrealized gains |  | Gross unrealized losses |  | Fair values
U.S. Treasury notes |  | $ | 2,709 |  |  | $ | — |  |  | $ | (27 | ) |  | $ | 2,682 |
U.S. Treasury bills |  | 3,475 |  |  | — |  |  | — |  |  | 3,475 |
Other government-related debt securities: |  |  |  |  |  |  |  |
U.S. |  | 112 |  |  | — |  |  | (1 | ) |  | 111 |
Foreign and other |  | 964 |  |  | 4 |  |  | (10 | ) |  | 958 |
Corporate debt securities: |  |  |  |  |  |  |  |
Financial |  | 2,771 |  |  | 1 |  |  | (22 | ) |  | 2,750 |
Industrial |  | 2,481 |  |  | 4 |  |  | (27 | ) |  | 2,458 |
Other |  | 572 |  |  | 1 |  |  | (7 | ) |  | 566 |
Residential-mortgage-backed securities |  | 1,404 |  |  | — |  |  | (22 | ) |  | 1,382 |
Other mortgage- and asset-backed securities |  | 478 |  |  | — |  |  | (11 | ) |  | 467 |
Money market mutual funds |  | 4,375 |  |  | — |  |  | — |  |  | 4,375 |
Other short-term interest-bearing securities |  | 6,428 |  |  | — |  |  | — |  |  | 6,428 |
Total interest-bearing securities |  | $ | 25,769 |  |  | $ | 10 |  |  | $ | (127 | ) |  | $ | 25,652 |
Types of securities as of December 31, 2018 |  | Amortized cost |  | Gross unrealized gains |  | Gross unrealized losses |  | Fair values
U.S. Treasury notes |  | $ | 2,710 |  |  | $ | — |  |  | $ | (47 | ) |  | $ | 2,663 |
U.S. Treasury bills |  | 8,191 |  |  | — |  |  | — |  |  | 8,191 |
Other government-related debt securities: |  |  |  |  |  |  |  |
U.S. |  | 112 |  |  | — |  |  | (2 | ) |  | 110 |
Foreign and other |  | 972 |  |  | 1 |  |  | (41 | ) |  | 932 |
Corporate debt securities: |  |  |  |  |  |  |  |
Financial |  | 2,778 |  |  | — |  |  | (81 | ) |  | 2,697 |
Industrial |  | 2,603 |  |  | — |  |  | (99 | ) |  | 2,504 |
Other |  | 583 |  |  | — |  |  | (21 | ) |  | 562 |
Residential-mortgage-backed securities |  | 1,458 |  |  | — |  |  | (36 | ) |  | 1,422 |
Other mortgage- and asset-backed securities |  | 483 |  |  | — |  |  | (14 | ) |  | 469 |
Money market mutual funds |  | 5,659 |  |  | — |  |  | — |  |  | 5,659 |
Other short-term interest-bearing securities |  | 3,515 |  |  | — |  |  | — |  |  | 3,515 |
Total interest-bearing securities |  | $ | 29,064 |  |  | $ | 1 |  |  | $ | (341 | ) |  | $ | 28,724 |
The fair values of interest-bearing securities by location in the Condensed Consolidated Balance Sheets were as follows (in millions):
Condensed Consolidated Balance Sheets locations |  | March 31, 2019 |  | December 31, 2018
Cash and cash equivalents |  | $ | 6,709 |  |  | $ | 6,365 |
Marketable securities |  | 18,943 |  |  | 22,359 |
Total interest-bearing securities |  | $ | 25,652 |  |  | $ | 28,724 |
Cash and cash equivalents in the above table excludes bank account cash of $649 million and $580 million as of March 31, 2019 and December 31, 2018, respectively. The fair values of interest-bearing securities by contractual maturity, except for mortgage- and asset-backed securities that do not have a single maturity date, were as follows (in millions):
Contractual maturities |  | March 31, 2019 |  | December 31, 2018
Maturing in one year or less |  | $ | 14,357 |  |  | $ | 17,424 |
Maturing after one year through three years |  | 4,600 |  |  | 3,356 |
Maturing after three years through five years |  | 3,987 |  |  | 5,168 |
Maturing after five years through ten years |  | 859 |  |  | 885 |
Mortgage- and asset-backed securities |  | 1,849 |  |  | 1,891 |
Total interest-bearing securities |  | $ | 25,652 |  |  | $ | 28,724 |
For the three months ended March 31, 2019 and 2018, realized gains on interest-bearing securities were $1 million and $17 million, respectively, and realized losses on interest-bearing securities were $5 million and $151 million, respectively. Realized gains and losses on interest-bearing securities are recorded in Interest and other income, net, in the Condensed Consolidated Statements of Income. The cost of securities sold is based on the specific-identification method. The fair values and gross unrealized losses of interest-bearing securities in an unrealized loss position aggregated by type and length of time that the securities have been in a continuous loss position were as follows (in millions):
|  | Less than 12 months |  | 12 months or more
Types of securities as of March 31, 2019 |  | Fair values |  | Unrealized losses |  | Fair values |  | Unrealized losses
U.S. Treasury notes |  | $ | 1,190 |  |  | $ | (11 | ) |  | $ | 1,452 |  |  | $ | (16 | )
Other government-related debt securities: |  |  |  |  |  |  |  |
U.S. |  | — |  |  | — |  |  | 111 |  |  | (1 | )
Foreign and other |  | 410 |  |  | (6 | ) |  | 307 |  |  | (4 | )
Corporate debt securities: |  |  |  |  |  |  |  |
Financial |  | 1,783 |  |  | (14 | ) |  | 822 |  |  | (8 | )
Industrial |  | 1,516 |  |  | (20 | ) |  | 634 |  |  | (7 | )
Other |  | 454 |  |  | (6 | ) |  | 36 |  |  | (1 | )
Residential-mortgage-backed securities |  | 558 |  |  | (9 | ) |  | 809 |  |  | (13 | )
Other mortgage- and asset-backed securities |  | 17 |  |  | — |  |  | 450 |  |  | (11 | )
Total |  | $ | 5,928 |  |  | $ | (66 | ) |  | $ | 4,621 |  |  | $ | (61 | )
|  | Less than 12 months |  | 12 months or more
Types of securities as of December 31, 2018 |  | Fair values |  | Unrealized losses |  | Fair values |  | Unrealized losses
U.S. Treasury notes |  | $ | 1,219 |  |  | $ | (21 | ) |  | $ | 1,444 |  |  | $ | (26 | )
Other government-related debt securities: |  |  |  |  |  |  |  |
U.S. |  | — |  |  | — |  |  | 110 |  |  | (2 | )
Foreign and other |  | 631 |  |  | (31 | ) |  | 240 |  |  | (10 | )
Corporate debt securities: |  |  |  |  |  |  |  |
Financial |  | 1,968 |  |  | (59 | ) |  | 718 |  |  | (22 | )
Industrial |  | 1,898 |  |  | (81 | ) |  | 529 |  |  | (18 | )
Other |  | 529 |  |  | (20 | ) |  | 28 |  |  | (1 | )
Residential-mortgage-backed securities |  | 576 |  |  | (14 | ) |  | 840 |  |  | (22 | )
Other mortgage- and asset-backed securities |  | 17 |  |  | — |  |  | 451 |  |  | (14 | )
Total |  | $ | 6,838 |  |  | $ | (226 | ) |  | $ | 4,360 |  |  | $ | (115 | )
The primary objective of our investment portfolio is to enhance overall returns in an efficient manner while maintaining safety of principal, prudent levels of liquidity and acceptable levels of risk. Our investment policy limits interest-bearing security investments to certain types of debt and money market instruments issued by institutions with primarily investment-grade credit ratings, and it places restrictions on maturities and concentration by asset class and issuer. We review our available-for-sale investments for other-than-temporary declines in fair value below our cost basis each quarter and whenever events or changes in circumstances indicate that the cost basis of an asset may not be recoverable. The evaluation is based on a number of factors, including the length of time and the extent to which the fair value has been below our cost basis as well as adverse conditions related specifically to the security, such as any changes to the credit rating of the security and the intent to sell or whether we will more likely than not be required to sell the security before recovery of its amortized cost basis. Our assessment of whether a security is other-than-temporarily impaired could change in the future based on new developments or changes in assumptions related to that particular security. As of March 31, 2019, unrealized losses on available-for-sale investments were due primarily to higher interest rates than at the time the securities were purchased. As of March 31, 2019 and December 31, 2018, we believe the cost bases for our available-for-sale investments were recoverable in all material respects. Equity securities We held investments in equity securities with readily determinable fair values of $246 million and $176 million as of March 31, 2019 and December 31, 2018, respectively, which are included in Other assets in the Condensed Consolidated Balance Sheets. Gains and losses recognized on equity securities with readily determinable fair values, including gains and losses recognized on sales, were not material for the three months ended March 31, 2019 and 2018. As of March 31, 2019 and December 31, 2018, respectively, we held investments of $185 million and $222 million in equity securities without readily determinable fair values, which are included in Other assets in the Condensed Consolidated Balance Sheets. Adjustments to the carrying values of these securities were not material for the three months ended March 31, 2019 and 2018. Limited partnership investments We held limited partnership investments of $275 million and $285 million as of March 31, 2019 and December 31, 2018, respectively, which are included in Other assets in the Condensed Consolidated Balance Sheets. These investments are measured by using the net asset values of the underlying investments as a practical expedient. These investments are typically redeemable only through distributions upon liquidation of the underlying assets. As of March 31, 2019, unfunded additional commitments to be made during the next several years for these investments were not material. Gains and losses recognized on our limited partnership investments were not material for the three months ended March 31, 2019 and 2018.

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