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Funds Receivable and Customer Accounts and Investments | 3 Months Ended
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Mar. 31, 2021
Investments, Debt and Equity Securities [Abstract] |
Funds Receivable and Customer Accounts and Investments | FUNDS RECEIVABLE AND CUSTOMER ACCOUNTS AND INVESTMENTS The following table summarizes the assets underlying our funds receivable and customer accounts, short-term investments, and long-term investments as of March 31, 2021 and December 31, 2020:
| March 31, 2021 |  | December 31, 2020
| (In millions)
Funds receivable and customer accounts: |  |  |
Cash and cash equivalents | $ | 13,257 |  |  | $ | 13,222 |
Time deposits | 248 |  |  | 233 |
Available-for-sale debt securities | 16,997 |  |  | 15,001 |
Funds receivable | 5,121 |  |  | 4,962 |
Total funds receivable and customer accounts | $ | 35,623 |  |  | $ | 33,418 |
Short-term investments: |  |  |
Time deposits | $ | 1,482 |  |  | $ | 1,519 |
Available-for-sale debt securities | 5,861 |  |  | 6,689 |
Restricted cash | 26 |  |  | 81 |
Total short-term investments | $ | 7,369 |  |  | $ | 8,289 |
Long-term investments: |  |  |
Time deposits | $ | 41 |  |  | $ | 31 |
Available-for-sale debt securities | 3,074 |  |  | 2,819 |
Restricted cash | — |  |  | 7 |
Strategic investments | 2,879 |  |  | 3,232 |
Total long-term investments | $ | 5,994 |  |  | $ | 6,089 |
As of March 31, 2021 and December 31, 2020, the estimated fair value of our available-for-sale debt securities included within funds receivable and customer accounts, short-term investments, and long-term investments was as follows:
| March 31, 2021(1)
| Gross Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Estimated Fair Value
| (In millions)
Funds receivable and customer accounts: |  |  |  |  |  |  |
U.S. government and agency securities | $ | 8,013 |  |  | $ | 4 |  |  | $ | (2) |  |  | $ | 8,015 |
Foreign government and agency securities | 1,877 |  |  | — |  |  | (2) |  |  | 1,875 |
Corporate debt securities | 3,558 |  |  | — |  |  | (2) |  |  | 3,556 |
Asset-backed securities | 443 |  |  | — |  |  | — |  |  | 443 |
Municipal securities | 633 |  |  | — |  |  | — |  |  | 633 |
Short-term investments: |  |  |  |  |  |  |
U.S. government and agency securities | 1,340 |  |  | — |  |  | — |  |  | 1,340 |
Foreign government and agency securities | 444 |  |  | — |  |  | — |  |  | 444 |
Corporate debt securities | 3,421 |  |  | 1 |  |  | — |  |  | 3,422 |
Asset-backed securities | 147 |  |  | — |  |  | — |  |  | 147 |
Long-term investments: |  |  |  |  |  |  |
Foreign government and agency securities | 1,506 |  |  | — |  |  | (2) |  |  | 1,504 |
Corporate debt securities | 1,406 |  |  | 2 |  |  | (3) |  |  | 1,405 |
Asset-backed securities | 165 |  |  | — |  |  | — |  |  | 165 |
Total available-for-sale debt securities(2) | $ | 22,953 |  |  | $ | 7 |  |  | $ | (11) |  |  | $ | 22,949 |
(1) “—” Denotes gross unrealized gain or unrealized loss of less than $1 million in a given position. (2) Excludes foreign currency denominated available-for-sale debt securities accounted for under the fair value option. Refer to “Note 9—Fair Value Measurement of Assets and Liabilities.”
| December 31, 2020(1)
| Gross Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Estimated Fair Value
| (In millions)
Funds receivable and customer accounts: |  |  |  |  |  |  |
U.S. government and agency securities | $ | 7,929 |  |  | $ | 4 |  |  | $ | — |  |  | $ | 7,933 |
Foreign government and agency securities | 1,504 |  |  | 2 |  |  | — |  |  | 1,506 |
Corporate debt securities | 2,011 |  |  | — |  |  | — |  |  | 2,011 |
Municipal securities | 637 |  |  | — |  |  | — |  |  | 637 |
Short-term investments: |  |  |  |  |  |  |
U.S. government and agency securities | 1,510 |  |  | — |  |  | — |  |  | 1,510 |
Foreign government and agency securities | 277 |  |  | — |  |  | — |  |  | 277 |
Corporate debt securities | 4,900 |  |  | 2 |  |  | — |  |  | 4,902 |
Long-term investments: |  |  |  |  |  |  |
U.S. government and agency securities | 28 |  |  | — |  |  | — |  |  | 28 |
Foreign government and agency securities | 1,305 |  |  | — |  |  | (1) |  |  | 1,304 |
Corporate debt securities | 1,255 |  |  | 4 |  |  | — |  |  | 1,259 |
Asset-backed securities | 228 |  |  | — |  |  | — |  |  | 228 |
Total available-for-sale debt securities(2) | $ | 21,584 |  |  | $ | 12 |  |  | $ | (1) |  |  | $ | 21,595 |
(1) “—” Denotes gross unrealized gain or unrealized loss of less than $1 million in a given position. (2) Excludes foreign currency denominated available-for-sale debt securities accounted for under the fair value option. Refer to “Note 9—Fair Value Measurement of Assets and Liabilities.” Gross amortized cost and estimated fair value balances exclude accrued interest receivable on available-for-sale debt securities, which totaled $44 million and $42 million at March 31, 2021 and December 31, 2020, respectively, and were included in other current assets on our condensed consolidated balance sheets. As of March 31, 2021 and December 31, 2020, the gross unrealized losses and estimated fair value of our available-for-sale debt securities included within funds receivable and customer accounts, short-term investments, and long-term investments for which an allowance for credit losses was not deemed necessary, aggregated by length of time those individual securities have been in a continuous loss position, was as follows:
| March 31, 2021(1)
| Less than 12 months |  | 12 months or longer |  | Total
| Fair Value |  | Gross Unrealized Losses |  | Fair Value |  | Gross Unrealized Losses |  | Fair Value |  | Gross Unrealized Losses
| (In millions)
Funds receivable and customer accounts: |  |  |  |  |  |  |  |  |  |  |
U.S. government and agency securities | $ | 1,567 |  |  | $ | (2) |  |  | $ | — |  |  | $ | — |  |  | $ | 1,567 |  |  | $ | (2) |
Foreign government and agency securities | 1,158 |  |  | (2) |  |  | — |  |  | — |  |  | 1,158 |  |  | (2) |
Corporate debt securities | 1,128 |  |  | (2) |  |  | — |  |  | — |  |  | 1,128 |  |  | (2) |
Asset-backed securities | 181 |  |  | — |  |  | — |  |  | — |  |  | 181 |  |  | — |
Short-term investments: |  |  |  |  |  |  |  |  |  |  |
U.S. government and agency securities | 520 |  |  | — |  |  | — |  |  | — |  |  | 520 |  |  | — |
Foreign government and agency securities | 132 |  |  | — |  |  | — |  |  | — |  |  | 132 |  |  | — |
Corporate debt securities | 360 |  |  | — |  |  | — |  |  | — |  |  | 360 |  |  | — |
Asset-backed securities | 58 |  |  | — |  |  | — |  |  | — |  |  | 58 |  |  | — |
Long-term investments: |  |  |  |  |  |  |  |  |  |  |
Foreign government and agency securities | 1,056 |  |  | (2) |  |  | — |  |  | — |  |  | 1,056 |  |  | (2) |
Corporate debt securities | 762 |  |  | (3) |  |  | — |  |  | — |  |  | 762 |  |  | (3) |
Asset-backed securities | 129 |  |  | — |  |  | — |  |  | — |  |  | 129 |  |  | — |
Total available-for-sale debt securities | $ | 7,051 |  |  | $ | (11) |  |  | $ | — |  |  | $ | — |  |  | $ | 7,051 |  |  | $ | (11) |
(1) “—” Denotes gross unrealized loss or fair value of less than $1 million in a given position.
| December 31, 2020(1)
| Less than 12 months |  | 12 months or longer |  | Total
| Fair Value |  | Gross Unrealized Losses |  | Fair Value |  | Gross Unrealized Losses |  | Fair Value |  | Gross Unrealized Losses
| (In millions)
Funds receivable and customer accounts: |  |  |  |  |  |  |  |  |  |  |
U.S. government and agency securities | $ | 262 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 262 |  |  | $ | — |
Foreign government and agency securities | 353 |  |  | — |  |  | — |  |  | — |  |  | 353 |  |  | — |
Corporate debt securities | 641 |  |  | — |  |  | — |  |  | — |  |  | 641 |  |  | — |
Municipal securities | 50 |  |  | — |  |  | — |  |  | — |  |  | 50 |  |  | — |
Short-term investments: |  |  |  |  |  |  |  |  |  |  |
U.S. government and agency securities | 270 |  |  | — |  |  | — |  |  | — |  |  | 270 |  |  | — |
Foreign government and agency securities | 72 |  |  | — |  |  | — |  |  | — |  |  | 72 |  |  | — |
Corporate debt securities | 392 |  |  | — |  |  | — |  |  | — |  |  | 392 |  |  | — |
Long-term investments: |  |  |  |  |  |  |  |  |  |  |
U.S. government and agency securities | 28 |  |  | — |  |  | — |  |  | — |  |  | 28 |  |  | — |
Foreign government and agency securities | 405 |  |  | (1) |  |  | — |  |  | — |  |  | 405 |  |  | (1) |
Corporate debt securities | 97 |  |  | — |  |  | — |  |  | — |  |  | 97 |  |  | — |
Asset-backed securities | 15 |  |  | — |  |  | — |  |  | — |  |  | 15 |  |  | — |
Total available-for-sale debt securities | $ | 2,585 |  |  | $ | (1) |  |  | $ | — |  |  | $ | — |  |  | $ | 2,585 |  |  | $ | (1) |
(1) “—” Denotes gross unrealized loss or fair value of less than $1 million in a given position. Unrealized losses have not been recognized into income as we neither intend to sell, nor anticipate that it is more likely than not that we will be required to sell, the securities before recovery of their amortized cost basis. The decline in fair value is due primarily to changes in market conditions, rather than credit losses. We will continue to monitor the performance of the investment portfolio and assess whether impairment due to expected credit losses has occurred. Amounts reclassified to earnings from unrealized gains and losses were not material for the three months ended March 31, 2021 and 2020. Our available-for-sale debt securities included within funds receivable and customer accounts, short-term investments, and long-term investments classified by date of contractual maturity were as follows:
| March 31, 2021
| Amortized Cost |  | Fair Value
| (In millions)
One year or less | $ | 15,557 |  |  | $ | 15,561 |
After one year through five years | 7,135 |  |  | 7,127 |
After five years through ten years | 243 |  |  | 243 |
After ten years | 18 |  |  | 18 |
Total | $ | 22,953 |  |  | $ | 22,949 |
STRATEGIC INVESTMENTS Our strategic investments include marketable equity securities, which are publicly traded, and non-marketable equity securities, which are primarily investments in privately held companies. Our marketable equity securities have readily determinable fair values and are recorded as long-term investments on our condensed consolidated balance sheets at fair value with changes in fair value recorded in other income (expense), net on our condensed consolidated statements of income. Marketable equity securities totaled $2.1 billion and $2.4 billion as of March 31, 2021 and December 31, 2020, respectively, including the impact of the sale of securities. Our non-marketable equity securities are recorded in long-term investments on our condensed consolidated balance sheets. As of March 31, 2021 and December 31, 2020, we had non-marketable equity securities of $28 million and $10 million, respectively, where we have the ability to exercise significant influence, but not control, over the investee. We account for these equity securities using the equity method of accounting. The remaining non-marketable equity securities do not have a readily determinable fair value and we measure these equity investments at cost minus impairment, if any, and adjust for changes resulting from observable price changes in orderly transactions for an identical or similar investment in the same issuer. All gains and losses on these investments, realized and unrealized, and our share of earnings or losses from investments accounted for using the equity method are recognized in other income (expense), net on our condensed consolidated statements of income. The carrying value of our non-marketable equity securities totaled $829 million and $789 million as of March 31, 2021 and December 31, 2020, respectively. Measurement Alternative adjustments The adjustments to the carrying value of our non-marketable equity securities accounted for under the Measurement Alternative in the three months ended March 31, 2021 and 2020 were as follows:
| Three Months Ended March 31,
| 2021 |  | 2020
| (In millions)
Carrying amount, beginning of period | $ | 779 |  |  | $ | 497 |
Adjustments related to non-marketable equity securities: |  |  |
Net additions (sales)(1) | 10 |  |  | (9) |
Gross unrealized gains | 12 |  |  | 45 |
Gross unrealized losses and impairments | — |  |  | (13) |
Carrying amount, end of period | $ | 801 |  |  | $ | 520 |
(1) Net additions (sales) include additions from purchases, reductions due to sales of securities, and reclassifications when Measurement Alternative is subsequently elected or no longer applies. The following table summarizes the cumulative gross unrealized gains and cumulative gross unrealized losses and impairment related to non-marketable equity securities accounted for under the Measurement Alternative for investments held at March 31, 2021 and December 31, 2020, respectively:
| March 31, 2021 |  | December 31, 2020
| (In millions)
Cumulative gross unrealized gains | $ | 389 |  |  | $ | 378 |
Cumulative gross unrealized losses and impairment | $ | (27) |  |  | $ | (27) |
Unrealized gains (losses) on strategic investments, excluding those accounted for using the equity method The following table summarizes the net unrealized gains (losses) on marketable and non-marketable equity securities, excluding those accounted for using the equity method, held at March 31, 2021 and 2020, respectively:
| Three Months Ended March 31, |  |
| 2021 |  | 2020 |  |  |  |
| (In millions)
Net unrealized losses | $ | (149) |  |  | $ | (132) |  |  |  |  |

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