Available-for-sale investments |
Available-for-sale investments The amortized cost, gross unrealized gains, gross unrealized losses and estimated fair values of available-for-sale investments by type of security were as follows (in millions): | | | | | | | | | | | | | | | | | Type of security as of December 31, 2016 | Amortized cost | | Gross unrealized gains | | Gross unrealized losses | | Estimated fair value | U.S. Treasury securities | $ | 6,681 |
| | $ | 1 |
| | $ | (68 | ) | | $ | 6,614 |
| Other government-related debt securities: | | | | | | | | U.S. | 302 |
| | — |
| | (3 | ) | | 299 |
| Foreign and other | 1,784 |
| | 9 |
| | (34 | ) | | 1,759 |
| Corporate debt securities: | | | | | | | | Financial | 8,476 |
| | 21 |
| | (37 | ) | | 8,460 |
| Industrial | 8,793 |
| | 59 |
| | (63 | ) | | 8,789 |
| Other | 1,079 |
| | 5 |
| | (7 | ) | | 1,077 |
| Residential mortgage-backed securities | 1,968 |
| | 1 |
| | (29 | ) | | 1,940 |
| Other mortgage- and asset-backed securities | 1,731 |
| | 1 |
| | (13 | ) | | 1,719 |
| Money market mutual funds | 2,782 |
| | — |
| | — |
| | 2,782 |
| Other short-term interest-bearing securities | 4,188 |
| | — |
| | — |
| | 4,188 |
| Total interest-bearing securities | 37,784 |
| | 97 |
| | (254 | ) | | 37,627 |
| Equity securities | 127 |
| | 31 |
| | (4 | ) | | 154 |
| Total available-for-sale investments | $ | 37,911 |
| | $ | 128 |
| | $ | (258 | ) | | $ | 37,781 |
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| | | | | | | | | | | | | | | | | Type of security as of December 31, 2015 | Amortized cost | | Gross unrealized gains | | Gross unrealized losses | | Estimated fair value | U.S. Treasury securities | $ | 4,298 |
| | $ | — |
| | $ | (24 | ) | | $ | 4,274 |
| Other government-related debt securities: | | | | | | | | U.S. | 536 |
| | — |
| | (2 | ) | | 534 |
| Foreign and other | 1,768 |
| | 7 |
| | (36 | ) | | 1,739 |
| Corporate debt securities: | | | | | | | | Financial | 7,904 |
| | 7 |
| | (40 | ) | | 7,871 |
| Industrial | 7,961 |
| | 11 |
| | (136 | ) | | 7,836 |
| Other | 905 |
| | 1 |
| | (21 | ) | | 885 |
| Residential mortgage-backed securities | 1,484 |
| | 1 |
| | (15 | ) | | 1,470 |
| Other mortgage- and asset-backed securities | 2,524 |
| | — |
| | (55 | ) | | 2,469 |
| Money market mutual funds | 3,370 |
| | — |
| | — |
| | 3,370 |
| Other short-term interest-bearing securities | 528 |
| | — |
| | — |
| | 528 |
| Total interest-bearing securities | 31,278 |
| | 27 |
| | (329 | ) | | 30,976 |
| Equity securities | 88 |
| | 48 |
| | — |
| | 136 |
| Total available-for-sale investments | $ | 31,366 |
| | $ | 75 |
| | $ | (329 | ) | | $ | 31,112 |
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The fair values of available-for-sale investments by classification in the Consolidated Balance Sheets were as follows (in millions): | | | | | | | | | | December 31, | Classification in the Consolidated Balance Sheets | 2016 | | 2015 | Cash and cash equivalents | $ | 2,783 |
| | $ | 3,738 |
| Marketable securities | 34,844 |
| | 27,238 |
| Other assets — noncurrent | 154 |
| | 136 |
| Total available-for-sale investments | $ | 37,781 |
| | $ | 31,112 |
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Cash and cash equivalents in the table above excludes bank account cash of $458 million and $406 million as of December 31, 2016 and 2015, respectively. The fair values of available-for-sale interest-bearing security investments by contractual maturity, except for mortgage- and asset-backed securities that do not have a single maturity date, were as follows (in millions): | | | | | | | | | | December 31, | Contractual maturity | 2016 | | 2015 | Maturing in one year or less | $ | 8,393 |
| | $ | 4,578 |
| Maturing after one year through three years | 10,404 |
| | 9,370 |
| Maturing after three years through five years | 12,157 |
| | 9,932 |
| Maturing after five years through ten years | 2,974 |
| | 3,087 |
| Maturing after ten years | 40 |
| | 70 |
| Mortgage- and asset-backed securities | 3,659 |
| | 3,939 |
| Total interest-bearing securities | $ | 37,627 |
| | $ | 30,976 |
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For the years ended December 31, 2016, 2015 and 2014, realized gains totaled $306 million, $132 million and $149 million, respectively, and realized losses totaled $367 million, $208 million and $150 million, respectively. The cost of securities sold is based on the specific identification method. The unrealized losses on available-for-sale investments and their related fair values were as follows (in millions): | | | | | | | | | | | | | | | | | | | | Less than 12 months | | 12 months or greater | Type of security as of December 31, 2016 | | Fair value | | Unrealized losses | | Fair value | | Unrealized losses | U.S. Treasury securities | | $ | 5,774 |
| | $ | (68 | ) | | $ | — |
| | $ | — |
| Other government-related debt securities: | | | | | | | | | U.S. | | 201 |
| | (3 | ) | | — |
| | — |
| Foreign and other | | 1,192 |
| | (34 | ) | | 17 |
| | — |
| Corporate debt securities: | | | | | | | | | Financial | | 3,975 |
| | (37 | ) | | 44 |
| | — |
| Industrial | | 3,913 |
| | (61 | ) | | 149 |
| | (2 | ) | Other | | 486 |
| | (7 | ) | | 7 |
| | — |
| Residential mortgage-backed securities | | 1,631 |
| | (26 | ) | | 158 |
| | (3 | ) | Other mortgage- and asset-backed securities | | 1,087 |
| | (10 | ) | | 118 |
| | (3 | ) | Equity securities | | 22 |
| | (4 | ) | | — |
| | — |
| Total | | $ | 18,281 |
| | $ | (250 | ) | | $ | 493 |
| | $ | (8 | ) |
| | | | | | | | | | | | | | | | | | | | Less than 12 months | | 12 months or greater | Type of security as of December 31, 2015 | | Fair value | | Unrealized losses | | Fair value | | Unrealized losses | U.S. Treasury securities | | $ | 4,196 |
| | $ | (24 | ) | | $ | — |
| | $ | — |
| Other government-related debt securities: | | | | | | | | | U.S. | | 494 |
| | (2 | ) | | 20 |
| | — |
| Foreign and other | | 1,306 |
| | (32 | ) | | 56 |
| | (4 | ) | Corporate debt securities: | | | | | | | | | Financial | | 5,988 |
| | (38 | ) | | 228 |
| | (2 | ) | Industrial | | 5,427 |
| | (108 | ) | | 679 |
| | (28 | ) | Other | | 807 |
| | (19 | ) | | 39 |
| | (2 | ) | Residential mortgage-backed securities | | 804 |
| | (8 | ) | | 304 |
| | (7 | ) | Other mortgage- and asset-backed securities | | 1,834 |
| | (19 | ) | | 561 |
| | (36 | ) | Total | | $ | 20,856 |
| | $ | (250 | ) | | $ | 1,887 |
| | $ | (79 | ) |
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 and adverse conditions related specifically to the security, including 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 December 31, 2016 and 2015, we believe the cost bases for our available-for-sale investments were recoverable in all material aspects.
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