v3.19.3.a.u2
Investments and Fair Value Measurement (Tables)
 12 Months Ended
Dec. 31, 2019
Fair Value Disclosures [Abstract]  
Summary of Investments
The Company’s short-term investments and investments on the consolidated balance sheets consisted of the following as of December 31, 2018 and 2019 (in millions):
 
 
As of December 31,
 
 
2018
 
2019
Classified as short-term investments:
 
 
 
 
Marketable debt securities (1):
 
 
 
 
Commercial paper
 
$
—

 
$
148

U.S. government and agency securities
 
—

 
93

Corporate bonds
 
—

 
199

Short-term investments
 
$
—

 
$
440

 
 
 
 
 
Classified as investments:
 
 
 
 
Non-marketable equity securities:
 
 
 
 
Didi (2)
 
$
7,953

 
$
7,953

Other
 
32

 
204

Non-marketable debt securities:
 
 
 
 
Grab (3), (4)
 
2,328

 
2,336

Other (5)
 
42

 
34

Investments
 
$
10,355

 
$
10,527

(1) Excluding marketable debt securities classified as cash equivalents and restricted cash equivalents.
(2) On August 1, 2016, the Company completed the sale of the Company’s interest in Uber China to Didi and received approximately 52 million shares of Didi’s Series B-1 preferred stock as consideration valued at approximately $6.0 billion at time of transaction.
(3) Refer to Note 19 - Divestitures for further information on the Company’s investment in Grab Holdings, Inc. ("Grab").
(4) Recorded at fair value with changes in fair value recorded in other comprehensive income (loss), net of tax.
(5) Recorded at fair value with changes in fair value recorded in earnings due to the election of the fair value option of accounting for financial instruments.
Schedule of Assets and Liabilities Measured on Recurring Basis
The following table presents the Company’s financial assets and liabilities measured at fair value on a recurring basis based on the three-tier fair value hierarchy (in millions):
 
As of December 31, 2018
 
As of December 31, 2019
 
Level 1
 
Level 2
 
Level 3
 
Total
 
Level 1
 
Level 2
 
Level 3
 
Total
Financial Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Money market funds
$
1,505

 
$
—

 
$
—

 
$
1,505

 
$
5,104

 
$
—

 
$
—

 
$
5,104

Commercial paper
—

 
—

 
—

 
—

 
—

 
233

 
—

 
233

U.S. government and agency securities
—

 
—

 
—

 
—

 
—

 
153

 
—

 
153

Corporate bonds
—

 
—

 
—

 
—

 
—

 
199

 
—

 
199

Non-marketable debt securities
—

 
—

 
2,370

 
2,370

 
—

 
—

 
2,370

 
2,370

Non-marketable equity securities
—

 
—

 
—

 
—

 
—

 
—

 
98

 
98

Total financial assets
$
1,505

 
$
—

 
$
2,370

 
$
3,875

 
$
5,104

 
$
585

 
$
2,468

 
$
8,157

Financial Liabilities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other
$
—

 
$
—

 
$
9

 
$
9

 
$
—

 
$
—

 
$
—

 
$
—

Warrants
—

 
—

 
52

 
52

 
—

 
—

 
—

 
—

Embedded derivatives
—

 
—

 
2,018

 
2,018

 
—

 
—

 
—

 
—

Total financial liabilities
$
—

 
$
—

 
$
2,079

 
$
2,079

 
$
—

 
$
—

 
$
—

 
$
—
Schedule of Amortized Cost and Fair Value of Marketable and Non-Marketable Debt Securities
The following table summarizes the amortized cost and fair value of the Company’s marketable and non-marketable debt securities with a stated contractual maturity or redemption date (in millions):
 
 
As of December 31, 2019
 
 
Amortized Cost
 
Fair Value
Within one year
 
$
408

 
$
408

One year through five years
 
2,456

 
2,513

Total
 
$
2,864

 
$
2,921
Schedule of Financial Assets Measured at Fair Value on a Recurring Basis
The following table summarizes the amortized cost, unrealized gains and losses, and fair value of the Company’s marketable and non-marketable debt securities at fair value on a recurring basis as of December 31, 2019 (in millions):
 
As of December 31, 2018
 
As of December 31, 2019
 
Amortized Cost
 
Unrealized Gains
 
Unrealized Losses
 
Fair Value
 
Amortized Cost
 
Unrealized Gains
 
Unrealized Losses
 
Fair Value
Commercial paper
—

 
—

 
—

 
—

 
233

 
—

 
—

 
233

U.S. government and agency securities
—

 
—

 
—

 
—

 
153

 
—

 
—

 
153

Corporate bonds
—

 
—

 
—

 
—

 
199

 
—

 
—

 
199

Non-marketable debt securities
2,305

 
65

 
—

 
2,370

 
2,309

 
61

 
—

 
2,370

Total
$
2,305

 
$
65

 
$
—

 
$
2,370

 
$
2,894

 
$
61

 
$
—

 
$
2,955
Schedule of Fair Value Assumptions on Significant Unobservable Inputs
The following table summarizes information about the significant unobservable inputs used in the fair value measurement for the Company’s Grab investment as of December 31, 2018 and 2019:
Fair value method
 
Relative weighting
 
Key unobservable input
Financing transactions
 
100%
 
Transaction price per share
 
$6.16
 
 
 
 
Volatility
 
48% - 54%
 
 
 
 
Estimated time to liquidity
 
1.0 - 2.5 years
Schedule of Reconciliation Using Significant Unobservable Inputs, Assets
The following table presents a reconciliation of the Company’s financial assets measured and recorded at fair value on a recurring basis as of December 31, 2019, using significant unobservable inputs (Level 3) (in millions):
 
 
Non-marketable
Debt Securities
 
Non-marketable
Equity Securities
Balance as of December 31, 2018
 
$
2,370

 
$
—

Total net gains (losses)
 
 
 
 
Included in earnings
 
(8
)
 
11

Included in other comprehensive income (loss)
 
4

 
—

Purchases (1)
 
4

 
56

Transfers (2)
 
—

 
31

Balance as of December 31, 2019
 
$
2,370

 
$
98


(1) Purchases of non–marketable equity security include warrants to purchase shares of a private company that vest as certain performance criteria are met during the period.
(2) Transfers include a non-marketable equity security that was previously measured at fair value on a non-recurring basis as of December 31, 2018 for which the Company elected to apply the fair value option during the year ended December 31, 2019. Management’s key inputs and assumptions used to determine an estimate of fair value for this investment is based on an option-pricing model and price of the underlying security in recent financing transactions.
Schedule of Reconciliation Using Significant Unobservable Inputs, Liabilities
The following table presents a rollforward of the Company’s financial liabilities measured at fair value as of December 31, 2018 and 2019 using significant unobservable inputs (Level 3), and the change in fair value recorded in other income (expense), net in the consolidated statements of operations (in millions):
 
 
 Warrants
 
Convertible Debt Embedded Derivative
Balance as of December 31, 2017
 
$
125

 
$
1,517

Vesting of share warrants
 
41

 
—

Exercise of vested share warrants
 
(2
)
 
—

forfeiture of unvested share warrants
 
(120
)
 
—

Change in fair value
 
8

 
501

Balance as of December 31, 2018
 
$
52

 
$
2,018

Vesting of share warrants
 
1

 
—

Exercise of vested share warrants
 
(53
)
 
—

Change in fair value
 
—

 
(58
)
Settlement of derivative liability
 
—

 
(1,960
)
Balance as of December 31, 2019
 
$
—

 
$
—
Schedule of Securities without Readily Determinable Fair Value
The following is a summary of unrealized gains and losses from remeasurement (referred to as upward or downward adjustments) recorded in other income (expense), net in the consolidated statements of operations, and included as adjustments to the carrying value of non-marketable equity securities held as of December 31, 2018 and 2019 based on the observable price in an orderly transaction for the same or similar security of the same issuers (in millions):
 
 
Year Ended December 31,
 
 
2018
 
2019
Upward adjustments
 
$
1,984

 
$
—

Downward adjustments (including impairment)
 
—

 
—

Total unrealized gain for non-marketable equity securities
 
$
1,984

 
$
—


The following table summarizes the total carrying value of the Company’s non-marketable equity securities measured at fair value on a non-recurring basis held as of December 31, 2018 and 2019 including cumulative unrealized upward and downward adjustments made to the initial cost basis of the securities (in millions):
 
 
As of December 31,
 
 
2018
 
2019
Initial cost basis
 
$
6,001

 
$
6,075

Upward adjustments
 
1,984

 
1,984

Downward adjustments (including impairment)
 
—

 
—

Total carrying value at the end of the period
 
$
7,985

 
$
8,059