v3.24.2.u1
Investments and Fair Value Measurement
 6 Months Ended
Jun. 30, 2024
Fair Value Disclosures [Abstract]  
Investments and Fair Value Measurement
Note 3 – Investments and Fair Value Measurement
Investments
Our investments on the condensed consolidated balance sheets consisted of the following (in millions):
As of
December 31, 2023June 30, 2024
Classified as short-term investments:
Marketable debt securities (1):
U.S. government and agency securities$253 $437 
Commercial paper288 581 
Corporate bonds181 770 
Certificates of deposit5 7 
Short-term investments$727 $1,795 
Classified as restricted investments:
Marketable debt securities (1):
U.S. government and agency securities$4,426 $4,783 
Commercial paper17 15 
Corporate bonds77 165 
Certificates of deposit259 98 
Restricted investments$4,779 $5,061 
Classified as investments:
Non-marketable equity securities:
Didi$2,245 $2,354 
Other (2)
329 575 
Marketable equity securities:
Grab1,806 1,902 
Aurora (3)
1,425 903 
Other170 342 
Note receivable from a related party (2)
126 127 
Investments$6,101 $6,203 
(1) Excluding marketable debt securities classified as cash equivalents and restricted cash equivalents.
(2) These balances include certain investments 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.
(3) In connection with Aurora’s November 2021 initial public offering, we are subject to a lock-up agreement in which our ability to sell or transfer our shares in Aurora is partially restricted until November 2025.
Assets and Liabilities Measured at Fair Value on a Recurring Basis
The following table presents our 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, 2023As of June 30, 2024
Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
Financial Assets
Money market funds$1,153 $— $— $1,153 $1,059 $— $— $1,059 
U.S. government and agency securities— 4,840 — 4,840 — 5,381 — 5,381 
Commercial paper— 351 — 351 — 789 — 789 
Corporate bonds— 263 — 263 — 940 — 940 
Certificates of deposit— 266 — 266 — 104 — 104 
Non-marketable equity securities— — — — — — 3 3 
Marketable equity securities3,401 — — 3,401 3,147 — — 3,147 
Note receivable from a related party— — 126 126 — — 127 127 
Total financial assets$4,554 $5,720 $126 $10,400 $4,206 $7,214 $130 $11,550 
During the six months ended June 30, 2024, we did not make any transfers into or out of Level 3 of the fair value hierarchy.
Debt Securities
As of December 31, 2023 and June 30, 2024, the amortized cost of our debt securities measured at fair value on a recurring basis approximates fair value. We did not record any material unrealized gains or losses, or credit losses as of December 31, 2023 and June 30, 2024. The weighted-average remaining maturity of our debt securities was less than one year as of June 30, 2024.
Derivatives Not Designated as Hedging Instruments
In the second quarter of 2024, we entered into financial derivative instruments, consisting of foreign currency contracts to mitigate the foreign currency exchange risk of our assets and liabilities denominated in currencies other than the functional currency. We do not use derivatives for trading or speculative purposes. These instruments are recorded on the condensed consolidated balance sheets at fair value and classified within Level 2 of the fair value hierarchy. Gains and losses on the derivative instruments that are not designated as hedging instruments are recognized in other income (expense), net in the condensed consolidated statements of operations. The cash flows associated with our non-designated derivatives are classified in cash flows from investing activities on our condensed consolidated statements of cash flows.
As of June 30, 2024, the fair value of our outstanding derivative assets and liabilities were not material. Derivative assets are recorded in prepaid expenses and other current assets and derivative liabilities are recorded in accrued and other current liabilities on our condensed consolidated balance sheets.
We did not record any material realized or unrealized gains or losses for our financial derivative instruments during the three and six months ended June 30, 2024.
We have master netting arrangements with certain counterparties to our foreign currency exchange contracts, which are designed to reduce credit risk by permitting net settlement of transactions with the same counterparty. We have elected to present the derivative assets and derivative liabilities on a gross basis on our condensed consolidated balance sheets. As of June 30, 2024, there were no rights of set-off associated with our foreign currency exchange contracts.
The total notional amount of outstanding derivatives not designated as hedging instruments was $810 million as of June 30, 2024.
Delivery Hero Investment
In May 2024, we paid $300 million to purchase approximately 8.4 million newly issued ordinary shares of Delivery Hero. In connection with the Delivery Hero investment, we entered into a definitive agreement to acquire Foodpanda Taiwan. Refer to Note 1 – Description of Business and Summary of Significant Accounting Policies for further details on the pending acquisition.
As of June 30, 2024, our investment in Delivery Hero was classified as a marketable equity security with a readily determinable fair value (Level 1) measured at fair value on a recurring basis. We recognized an immaterial unrealized loss on this investment in other income (expense), net in our condensed consolidated statements of operations during the three and six months ended June 30, 2024, respectively.
Fair Value Hierarchy
We measure our cash equivalents and certain investments at fair value. Level 1 instrument valuations are based on quoted market
prices of the identical underlying security. Level 2 instrument valuations are obtained from readily available pricing sources for comparable instruments, identical instruments in less active markets, or models using market observable inputs. Level 3 instrument valuations are based on unobservable inputs and other estimation techniques due to the absence of quoted market prices, inherent lack of liquidity and the long-term nature of such financial instruments.
As of December 31, 2023 and June 30, 2024, our Level 3 non-marketable equity securities and note receivable from a related party primarily consist of common stock investments and convertible secured notes that may be converted into common or preferred stock in privately held companies without readily determinable fair values.
Depending on the investee’s financing activity in a reporting period, management’s estimate of fair value may be primarily derived from the investee’s financing transactions, such as the issuance of preferred stock to new investors. The price in these transactions generally provides the best indication of the enterprise value of the investee. Additionally, based on the timing, volume, and other characteristics of the transaction, we may supplement this information by using other valuation techniques, including the guideline public company approach. The guideline public company approach relies on publicly available market data of comparable companies and uses comparative valuation multiples of the investee’s revenue (actual and forecasted), and therefore, unobservable input used in this valuation technique primarily consists of short-term revenue projections.
Once the fair value of the investee is estimated, an option-pricing model (“OPM”), a common stock equivalent (“CSE”) method or a hybrid approach is employed to allocate value to various classes of securities of the investee, including the class owned by us. The model involves making assumptions around the investees’ expected time to liquidity and volatility.
An increase or decrease in any of the unobservable inputs in isolation, such as the security price in a significant financing transaction of the investee, could result in a material increase or decrease in our estimate of fair value. Other unobservable inputs, including short-term revenue projections, time to liquidity, and volatility are less sensitive to the valuation in the respective reporting periods, as a result of the primary weighting on the investee’s financing transactions. In the future, depending on the weight of evidence and valuation approaches used, these or other inputs may have a more significant impact on our estimate of fair value.
We determine realized gains or losses on the sale of equity and debt securities on a specific identification method.
Financial Assets Measured at Fair Value Using Level 3 Inputs
The following table presents a reconciliation of our financial assets measured and recorded at fair value on a recurring basis as of June 30, 2024, using significant unobservable inputs (Level 3) (in millions):
Non-marketable Equity SecuritiesNote Receivable
Balance as of December 31, 2023$— $126 
Change in fair value
Included in earnings3 1 
Balance as of June 30, 2024$3 $127 
Assets Measured at Fair Value on a Non-Recurring Basis
Non-Financial Assets
Our non-financial assets, such as goodwill, intangible assets and property and equipment are adjusted to fair value when an impairment charge is recognized. Such fair value measurements are based predominantly on Level 3 inputs.
Non-Marketable Equity Securities
Our non-marketable equity securities are investments in privately held companies without readily determinable fair values. The carrying value of our non-marketable equity securities are adjusted based on price changes from observable transactions of identical or similar securities of the same issuer (referred to as the measurement alternative) or for impairment. Any changes in carrying value are recorded within other income (expense), net in the condensed consolidated statements of operations. Certain non-marketable equity securities are classified within Level 3 in the fair value hierarchy because we estimate the fair value of these securities based on valuation methods, including the CSE and OPM methods, using the transaction price of similar securities issued by the investee adjusted for contractual rights and obligations of the securities we hold.
Didi Investment
As of December 31, 2023 and June 30, 2024, we measured the fair value of our Didi investment based on the closing share price of the Didi American Depositary Shares on the over-the-counter market as an observable transaction for similar securities. During the three and six months ended June 30, 2023, we recognized an unrealized loss of $461 million and $104 million, respectively, in other income (expense), net in our condensed consolidated statements of operations. During the three and six months ended June 30, 2024, we recognized an unrealized gain of $178 million and $109 million, respectively, in other income (expense), net in our condensed consolidated statements of operations.
We did not record any other material unrealized or realized gains or losses for our non-marketable equity securities measured at fair value on a non-recurring basis during the three and six months ended June 30, 2023 and 2024.
The following table summarizes the total carrying value of our non-marketable equity securities measured at fair value on a non-recurring basis held, including cumulative unrealized upward and downward adjustments made to the initial cost basis of the securities (in millions):
As of
December 31, 2023June 30, 2024
Initial cost basis$1,727 $1,973 
Upward adjustments1,960 2,136 
Downward adjustments (including impairment)(1,113)(1,183)
Total carrying value at the end of the period$2,574 $2,926