Investments in Marketable Securities

3 Months Ended

Jun. 30, 2020

Note 2 – Investments in Marketable Securities

Investments in marketable securities consist of debt securities and equity investments. We classify all of our debt securities as available-for-sale. All equity investments are recorded at fair value with changes in fair value included in Investment and other income, net within our Consolidated Statements of Income.

Investments in marketable securities consisted of the following:

	June 30, 2020
	Amortized		Unrealized		Unrealized			Fair
	cost		gains		losses			value
Available-for-sale debt securities:
U.S. government and agency obligations	$	171	$	11	$	-		$	182
Municipal debt securities		10		2		-			12
Certificates of deposit		-		-		-			-
Commercial paper		605		-		(1	)		604
Corporate debt securities		169		18		-			187
Mortgage-backed securities:
U.S. government agency		44		2		-			46
Non-agency residential		1		-		-			1
Non-agency commercial		47		2		(2	)		47
Asset-backed securities		70		3		(1	)		72
Total available-for-sale debt securities	$	1,117	$	38	$	(4	)	$	1,151
Equity investments									2,994
Total investments in marketable securities								$	4,145

	March 31, 2020
	Amortized		Unrealized		Unrealized			Fair
	cost		gains		losses			value
Available-for-sale debt securities:
U.S. government and agency obligations	$	160	$	16	$	-		$	176
Municipal debt securities		9		2		-			11
Certificates of deposit		250		-		(1	)		249
Commercial paper		604		-		(3	)		601
Corporate debt securities		188		10		(1	)		197
Mortgage-backed securities:
U.S. government agency		47		2		-			49
Non-agency residential		1		-		-			1
Non-agency commercial		47		-		(2	)		45
Asset-backed securities		75		-		(3	)		72
Total available-for-sale debt securities	$	1,381	$	30	$	(10	)	$	1,401
Equity investments									2,419
Total investments in marketable securities								$	3,820

A portion of our equity investments is investments in funds that are privately placed and managed by an open-end investment management company (the “Trust”). If we elect to redeem shares, the Trust will normally redeem all shares for cash, but may, in unusual circumstances, redeem amounts exceeding the lesser of $250 thousand or 1 percent of the Trust’s asset value by payment in kind of securities held by the respective fund during any 90-day period.

We also invest in actively traded open-end mutual funds. Redemptions are subject to normal terms and conditions as described in each fund’s prospectus.

Note 2 – Investments in Marketable Securities (Continued)

Unrealized Losses on Securities

Available-for-sale debt securities in a continuous loss position for less than twelve months and greater than twelve months were not significant as of June 30, 2020 and March 31, 2020.

We adopted ASU 2016-13 on April 1, 2020, on a modified retrospective basis, as further described in Note 1 – Interim Financial Data. Under the new guidance, once it is determined that a credit loss has occurred, an allowance for credit losses is established. Prior to adoption of this standard, when a decline in fair value of a debt security was determined to be other- than-temporary, an impairment charge for the credit component was recorded in Investment and other income, net and a new cost basis in the investment was established. As of June 30, 2020, management determined that credit losses did not exist for securities in an unrealized loss position. This analysis considered a variety of factors including, but not limited to, performance indicators of the issuer, default rates, industry analyst reports, credit ratings, and other relevant information, which indicated that contractual cash flows are expected to occur.

Gains and Losses on Securities

The following table represents gains and losses on our investments in marketable securities presented in our Consolidated Statements of Income:

	Three months ended
	June 30,
	2020		2019
Available-for-sale debt securities:
Realized gains	$	14	$	-

Equity investments:
Unrealized gains recognized	$	100	$	55
Realized gains on sales	$	11	$	2

Contractual Maturities

The amortized cost and fair value, by contractual maturity of available-for-sale debt securities are summarized in the following table. Actual maturities may differ from contractual maturities because certain borrowers have the right to call or prepay certain obligations.

	June 30, 2020
	Amortized cost		Fair value
Available-for-sale debt securities:
Due within 1 year	$	628	$	627
Due after 1 year through 5 years		121		129
Due after 5 years through 10 years		130		141
Due after 10 years		76		88
Mortgage-backed and asset-backed securities¹		162		166
Total	$	1,117	$	1,151

¹	Mortgage-backed and asset-backed securities are shown separately from other maturity groupings as these securities have multiple maturity dates.