Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2024

The following tables summarize our cash, cash equivalents, and marketable securities measured at fair value on a recurring basis (in millions):


		As of December 31, 2023
	Fair Value Hierarchy	Adjusted Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Cash and Cash Equivalents		Marketable Securities
Fair value changes recorded in other comprehensive income
Time deposits	Level 2	$	2,628	$	0	$	0	$	2,628	$	2,628	$	0
Government bonds	Level 2	38,106		233		(679)		37,660		1,993		35,667
Corporate debt securities	Level 2	22,457		112		(637)		21,932		0		21,932
Mortgage-backed and asset-backed securities	Level 2	17,243		88		(634)		16,697		0		16,697
Total investments with fair value change reflected in other comprehensive income(1)		$	80,434	$	433	$	(1,950)	$	78,917	$	4,621	$	74,296
Fair value adjustments recorded in net income
Money market funds	Level 1							$	6,480	$	6,480	$	0
Current marketable equity securities(2)	Level 1							4,282		0		4,282
Mutual funds	Level 2							311		0		311
Government bonds	Level 2							1,952		347		1,605
Corporate debt securities	Level 2							3,782		91		3,691
Mortgage-backed and asset-backed securities	Level 2							2,683		0		2,683
Total investments with fair value change recorded in net income								$	19,490	$	6,918	$	12,572
Cash								0		12,509		0
Total		$	80,434	$	433	$	(1,950)	$	98,407	$	24,048	$	86,868

(1)Represents gross unrealized gains and losses for debt securities recorded to accumulated other comprehensive income (AOCI).

(2)The long-term portion of marketable equity securities (subject to long-term lock-up restrictions) of $1.4 billion as of December 31, 2023 is included within other non-current assets.


		As of March 31, 2024
	Fair Value Hierarchy	Adjusted Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Cash and Cash Equivalents		Marketable Securities
Fair value changes recorded in other comprehensive income
Time deposits	Level 2	$	2,812	$	0	$	0	$	2,812	$	2,812	$	0
Government bonds	Level 2	36,336		88		(595)		35,829		2,724		33,105
Corporate debt securities	Level 2	22,085		64		(546)		21,603		0		21,603
Mortgage-backed and asset-backed securities	Level 2	17,018		47		(642)		16,423		0		16,423
Total investments with fair value change reflected in other comprehensive income(1)		$	78,251	$	199	$	(1,783)	$	76,667	$	5,536	$	71,131
Fair value adjustments recorded in net income
Money market funds	Level 1							$	6,890	$	6,890	$	0
Current marketable equity securities(2)	Level 1							3,998		0		3,998
Mutual funds	Level 2							278		0		278
Government bonds	Level 2							1,965		158		1,807
Corporate debt securities	Level 2							3,772		80		3,692
Mortgage-backed and asset-backed securities	Level 2							2,691		0		2,691
Total investments with fair value change recorded in net income								$	19,594	$	7,128	$	12,466
Cash								0		11,829		0
Total		$	78,251	$	199	$	(1,783)	$	96,261	$	24,493	$	83,597

(1)Represents gross unrealized gains and losses for debt securities recorded to AOCI.

(2)The long-term portion of marketable equity securities (subject to long-term lock-up restrictions) of $1.4 billion as of March 31, 2024 is included within other non-current assets.

Investments by maturity date

The following table summarizes the estimated fair value of investments in available-for-sale marketable debt securities by effective contractual maturity dates (in millions):


	As of March 31, 2024
Due in 1 year or less	$	8,551
Due in 1 year through 5 years	42,755
Due in 5 years through 10 years	13,972
Due after 10 years	14,043
Total	$	79,321

Fair value of gross unrealized losses recorded to AOCI

The following tables present fair values and gross unrealized losses recorded to AOCI, aggregated by investment category and the length of time that individual securities have been in a continuous loss position (in millions):


	As of December 31, 2023
	Less than 12 Months				12 Months or Greater				Total
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
Government bonds	$	1,456	$	(22)	$	13,897	$	(657)	$	15,353	$	(679)
Corporate debt securities	827		(5)		15,367		(592)		16,194		(597)
Mortgage-backed and asset-backed securities	2,945		(26)		7,916		(608)		10,861		(634)
Total	$	5,228	$	(53)	$	37,180	$	(1,857)	$	42,408	$	(1,910)


	As of March 31, 2024
	Less than 12 Months				12 Months or Greater				Total
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
Government bonds	$	14,539	$	(116)	$	9,276	$	(479)	$	23,815	$	(595)
Corporate debt securities	2,653		(8)		13,022		(494)		15,675		(502)
Mortgage-backed and asset-backed securities	4,895		(79)		6,851		(563)		11,746		(642)
Total	$	22,087	$	(203)	$	29,149	$	(1,536)	$	51,236	$	(1,739)

Available-for-sale debt securities

The following table summarizes gains and losses for debt securities, reflected as a component of OI&E (in millions):


	Three Months Ended
	March 31,
	2023		2024
Unrealized gain (loss) on fair value option debt securities	$	145	$	(46)
Gross realized gain on debt securities	57		68
Gross realized loss on debt securities	(492)		(480)
(Increase) decrease in allowance for credit losses	(3)		(4)
Total gain (loss) on debt securities recognized in other income (expense), net	$	(293)	$	(462)

Summary of unrealized gains and losses for marketable and non-marketable equity securities

The carrying values for marketable and non-marketable equity securities are summarized below (in millions):


	As of December 31, 2023						As of March 31, 2024
	Marketable Equity Securities		Non-Marketable Equity Securities		Total		Marketable Equity Securities		Non-Marketable Equity Securities		Total
Total initial cost	$	5,418	$	17,616	$	23,034	$	5,083	$	18,505	$	23,588
Cumulative net gain (loss)(1)	555		11,150		11,705		570		12,925		13,495
Carrying value	$	5,973	$	28,766	$	34,739	$	5,653	$	31,430	$	37,083

(1)Non-marketable equity securities cumulative net gain (loss) is comprised of $18.1 billion gains and $6.9 billion losses (including impairments) as of December 31, 2023 and $20.6 billion gains and $7.7 billion losses (including impairments) as of March 31, 2024.

Gains and losses on equity securities

Gains and losses (including impairments), net, for marketable and non-marketable equity securities included in OI&E are summarized below (in millions):


	Three Months Ended
	March 31,
	2023		2024
Realized net gain (loss) on equity securities sold during the period	$	105	$	95
Unrealized net gain (loss) on marketable equity securities	51		164
Unrealized net gain (loss) on non-marketable equity securities(1)	221		1,984
Total gain (loss) on equity securities in other income (expense), net	$	377	$	2,243

(1)Unrealized gain (loss) on non-marketable equity securities accounted for under the measurement alternative is comprised of $915 million and $2.8 billion of upward adjustments and $694 million and $814 million of downward adjustments (including impairments) for the three months ended March 31, 2023 and 2024, respectively.

In the table above, realized net gain (loss) on equity securities sold during the period reflects the difference between the sale proceeds and the carrying value of the equity securities at the beginning of the period or the purchase date, if later.

Cumulative net gains on equity securities sold

Cumulative net gains (losses) on equity securities sold during the period, which is summarized in the following table (in millions), represents the total net gains (losses) recognized after the initial purchase date of the equity security sold during the period. While these net gains (losses) may have been reflected in periods prior to the period of sale, we believe they are important supplemental information as they reflect the economic net gains (losses) on the securities sold during the period. Cumulative net gains (losses) are calculated as the difference between the sale price and the initial purchase price for the equity security sold during the period.


	Equity Securities Sold
	Three Months Ended
	March 31,
	2023		2024
Total sale price	$	312	$	1,090
Total initial cost	211		661
Cumulative net gains (losses)	$	101	$	429

Schedule of gross notional amounts of derivative instruments

The gross notional amounts of outstanding derivative instruments were as follows (in millions):


	As of December 31, 2023		As of March 31, 2024
Derivatives designated as hedging instruments:
Foreign exchange contracts
Cash flow hedges	$	18,039	$	17,726
Fair value hedges	$	2,065	$	1,847
Net investment hedges	$	9,472	$	9,321
Derivatives not designated as hedging instruments:
Foreign exchange contracts(1)	$	39,722	$	107,978
Other contracts	$	10,818	$	10,902

(1) The gross notional amounts of these derivative instruments as of March 31, 2024 reflect a rollover in timing of settlement into our second quarter as a result of a holiday market closure.

Schedule of derivative instruments

The fair values of outstanding derivative instruments were as follows (in millions):


	As of December 31, 2023				As of March 31, 2024
	Assets(1)		Liabilities(2)		Assets(1)		Liabilities(2)
Derivatives designated as hedging instruments:
Foreign exchange contracts	$	205	$	242	$	150	$	125

Derivatives not designated as hedging instruments:
Foreign exchange contracts	134		156		317		221
Other contracts	114		47		164		40
Total derivatives not designated as hedging instruments	248		203		481		261
Total	$	453	$	445	$	631	$	386

(1) Derivative assets are recorded as other current and non-current assets in the Consolidated Balance Sheets.

(2) Derivative liabilities are recorded as accrued expenses and other liabilities, current and non-current in the Consolidated Balance Sheets.

Schedule of gain (loss) on derivative instruments

The gains (losses) on derivatives in cash flow hedging and net investment hedging relationships recognized in other comprehensive income (OCI) are summarized below (in millions):


	Three Months Ended
	March 31,
	2023		2024
Derivatives in cash flow hedging relationship:
Foreign exchange contracts
Amount included in the assessment of effectiveness	$	(138)	$	155
Amount excluded from the assessment of effectiveness	47		58

Derivatives in net investment hedging relationship:
Foreign exchange contracts
Amount included in the assessment of effectiveness	(215)		82
Total	$	(306)	$	295

The table below presents the gains (losses) of our derivatives on the Consolidated Statements of Income: (in millions):


	Three Months Ended March 31, 2024
	2023				2024
	Revenues		Other income (expense), net		Revenues		Other income (expense), net
Total amounts in the Consolidated Statements of Income	$	69,787	$	790	$	80,539	$	2,843

Effect of cash flow hedges:
Foreign exchange contracts
Amount reclassified from AOCI to income	$	88	$	0	$	74	$	0
Amount excluded from the assessment of effectiveness (amortized)	(4)		0		(2)		0
Effect of fair value hedges:
Foreign exchange contracts
Hedged items	0		32		0		(16)
Derivatives designated as hedging instruments	0		(32)		0		15
Amount excluded from the assessment of effectiveness	0		5		0		3
Effect of net investment hedges:
Foreign exchange contracts
Amount excluded from the assessment of effectiveness	0		51		0		36
Effect of non designated hedges:
Foreign exchange contracts	0		30		0		21
Other contracts	0		3		0		76
Total gains (losses)	$	84	$	89	$	72	$	135

Offsetting assets

The gross amounts of derivative instruments subject to master netting arrangements with various counterparties, and cash and non-cash collateral received and pledged under such agreements were as follows (in millions):


	As of December 31, 2023
							Gross Amounts Not Offset in the Consolidated Balance Sheets, but Have Legal Rights to Offset
	Gross Amounts Recognized		Gross Amounts Offset in the Consolidated Balance Sheets		Net Amounts Presented in the Consolidated Balance Sheets		Financial Instruments(1)		Cash and Non-Cash Collateral Received or Pledged		Net Amounts
Derivatives assets	$	535	$	(82)	$	453	$	(213)	$	(75)	$	165
Derivatives liabilities	$	527	$	(82)	$	445	$	(213)	$	(16)	$	216


	As of March 31, 2024
							Gross Amounts Not Offset in the Consolidated Balance Sheets, but Have Legal Rights to Offset
	Gross Amounts Recognized		Gross Amounts Offset in the Consolidated Balance Sheets		Net Amounts Presented in the Consolidated Balance Sheets		Financial Instruments(1)		Cash and Non-Cash Collateral Received or Pledged		Net Amounts
Derivatives assets	$	705	$	(74)	$	631	$	(179)	$	(264)	$	188
Derivatives liabilities	$	460	$	(74)	$	386	$	(179)	$	(9)	$	198

(1)The balances as of December 31, 2023 and March 31, 2024 were related to derivatives allowed to be net settled in accordance with our master netting agreements.

Offsetting liabilities


	As of December 31, 2023
							Gross Amounts Not Offset in the Consolidated Balance Sheets, but Have Legal Rights to Offset
	Gross Amounts Recognized		Gross Amounts Offset in the Consolidated Balance Sheets		Net Amounts Presented in the Consolidated Balance Sheets		Financial Instruments(1)		Cash and Non-Cash Collateral Received or Pledged		Net Amounts
Derivatives assets	$	535	$	(82)	$	453	$	(213)	$	(75)	$	165
Derivatives liabilities	$	527	$	(82)	$	445	$	(213)	$	(16)	$	216


	As of March 31, 2024
							Gross Amounts Not Offset in the Consolidated Balance Sheets, but Have Legal Rights to Offset
	Gross Amounts Recognized		Gross Amounts Offset in the Consolidated Balance Sheets		Net Amounts Presented in the Consolidated Balance Sheets		Financial Instruments(1)		Cash and Non-Cash Collateral Received or Pledged		Net Amounts
Derivatives assets	$	705	$	(74)	$	631	$	(179)	$	(264)	$	188
Derivatives liabilities	$	460	$	(74)	$	386	$	(179)	$	(9)	$	198

(1)The balances as of December 31, 2023 and March 31, 2024 were related to derivatives allowed to be net settled in accordance with our master netting agreements.