Investments

6 Months Ended

Jun. 30, 2021

Investments, Debt and Equity Securities [Abstract]

Available-for-sale investments

The amortized cost, gross unrealized gains, gross unrealized losses and fair values of interest-bearing securities, which are considered available-for-sale, by type of security were as follows (in millions):


Types of securities as of June 30, 2021	Amortized cost		Gross unrealized gains		Gross unrealized losses		Fair values
U.S. Treasury notes	$	51	$	1	$	—	$	52
U.S. Treasury bills	1,400		—		—		1,400









Money market mutual funds	5,707		—		—		5,707
Other short-term interest-bearing securities	—		—		—		—


Total interest-bearing securities	$	7,158	$	1	$	—	$	7,159


Types of securities as of December 31, 2020	Amortized cost		Gross unrealized gains		Gross unrealized losses		Fair values
U.S. Treasury notes	$	129	$	1	$	—	$	130
U.S. Treasury bills	4,948		—		—		4,948









Money market mutual funds	4,765		—		—		4,765
Other short-term interest-bearing securities	2		—		—		2
Total interest-bearing securities	$	9,844	$	1	$	—	$	9,845

The fair values of interest-bearing securities by location in the Condensed Consolidated Balance Sheets were as follows (in millions):


Condensed Consolidated Balance Sheets locations	June 30, 2021		December 31, 2020
Cash and cash equivalents	$	5,707	$	5,464
Marketable securities	1,452		4,381
Total interest-bearing securities	$	7,159	$	9,845

Cash and cash equivalents in the above table excludes bank account cash of $923 million and $802 million as of June 30, 2021 and December 31, 2020, respectively.

The fair values of available-for-sale investments by contractual maturity were as follows (in millions):


Contractual maturities	June 30, 2021		December 31, 2020
Maturing in one year or less	$	7,159	$	9,795
Maturing after one year through three years	—		50




Total available-for-sale investments	$	7,159	$	9,845

For the three and six months ended June 30, 2021 and 2020, realized gains and losses on interest-bearing securities were not material. Realized gains and losses on interest-bearing securities are recorded in Other income, net, in the Condensed Consolidated Statements of Income. The cost of securities sold is based on the specific-identification method.

The primary objective of our investment portfolio is to maintain 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 investment-grade credit ratings, and it places restrictions on maturities and concentration by asset class and issuer.

Equity securities

We held investments in equity securities with readily determinable fair values (publicly traded securities) of $403 million and $477 million as of June 30, 2021 and December 31, 2020, respectively, which are included in Other assets in the Condensed Consolidated Balance Sheets. For the three months ended June 30, 2021 and 2020, net unrealized gains on publicly traded securities were $25 million and $80 million, respectively. For the six months ended June 30, 2021 and 2020, net unrealized gains and losses on publicly traded securities were a $31 million net loss and a $5 million net gain, respectively. Realized gains and losses on publicly traded securities for the three and six months ended June 30, 2021 and 2020, were not material.

We held investments of $245 million and $203 million in equity securities without readily determinable fair values as of June 30, 2021 and December 31, 2020, respectively, which are included in Other assets in the Condensed Consolidated Balance Sheets. Gains and losses recognized on these securities, including adjustments to the carrying values of these securities, were not material for the three and six months ended June 30, 2021.

Equity method investments

Limited partnerships

We held limited partnership investments of $616 million and $496 million as of June 30, 2021 and December 31, 2020, respectively, which are included in Other assets in the Condensed Consolidated Balance Sheets. These investments, primarily investment funds of early-stage biotechnology companies, are accounted for by using the equity method of accounting and are measured by using our proportionate share of the net asset values of the underlying investments held by the limited partnerships as a practical expedient. These investments are typically redeemable only through distributions upon liquidation of the underlying assets. As of June 30, 2021, unfunded additional commitments to be made for these investments during the next several years were not material. For the three months ended June 30, 2021 and 2020, net unrealized losses from our limited partnership investments were $43 million and $10 million, respectively. For the six months ended June 30, 2021 and 2020, net unrealized gains from our limited partnership investments were $165 million and $10 million, respectively.

BeiGene, Ltd.

As of June 30, 2021, we had an ownership interest of approximately 20.3% in BeiGene, Ltd. (BeiGene), which is included in Other assets in the Condensed Consolidated Balance Sheets and accounted for under the equity method of accounting. We amortize the difference between the fair value of equity securities acquired and our proportionate share of the carrying value of the underlying net assets of BeiGene over the useful lives of the assets that gave rise to this basis difference. This amortization and our share of the results of operations of BeiGene are included in Other income, net, in the Condensed Consolidated Statements of Income one quarter in arrears, which began in the second quarter of 2020.

During the three and six months ended June 30, 2021, the carrying value of our equity investment was adjusted by our share of BeiGene’s net income of $14 million and net loss of $83 million, respectively, and amortization of the basis difference of $42 million and $84 million, respectively. In addition, during the three and six months ended June 30, 2021, the carrying value increased by $21 million and $38 million, respectively, from the impact of BeiGene ownership transactions. As of June 30, 2021, the carrying value and fair value of our investment in BeiGene totaled $2.8 billion and $6.4 billion, respectively. As of June 30, 2021, we believe the carrying value of our equity investment in BeiGene is fully recoverable.