Company Quick10K Filing
Lyft
Price41.35 EPS-8
Shares295 P/E-5
MCap12,189 P/FCF-205
Net Debt-686 EBIT-2,242
TEV11,504 TEV/EBIT-5
TTM 2019-09-30, in MM, except price, ratios
10-Q 2020-03-31 Filed 2020-05-08
10-K 2019-12-31 Filed 2020-02-28
10-Q 2019-09-30 Filed 2019-11-04
10-Q 2019-06-30 Filed 2019-08-13
10-Q 2019-03-31 Filed 2019-05-14
S-1 2019-03-01 Public Filing
8-K 2020-06-19
8-K 2020-06-02
8-K 2020-05-12
8-K 2020-05-06
8-K 2020-04-29
8-K 2020-04-21
8-K 2020-04-07
8-K 2020-03-31
8-K 2020-02-28
8-K 2020-02-07
8-K 2019-10-30
8-K 2019-08-07
8-K 2019-07-29
8-K 2019-07-08
8-K 2019-05-07

LYFT 10Q Quarterly Report

Part I - Financial Information
Item 1. Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II - Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
Item 6. Exhibits
EX-10.1 ex101-amendmentagreeme.htm
EX-31.1 ex311-q1x20.htm
EX-31.2 ex312-q1x20.htm
EX-32.1 ex321-q1x20.htm

Lyft Earnings 2020-03-31

Balance SheetIncome StatementCash Flow
10.07.24.41.6-1.2-4.02018201820192020
Assets, Equity
1.00.60.1-0.3-0.8-1.22018201820192020
Rev, G Profit, Net Income
2.51.50.5-0.4-1.4-2.42018201820192020
Ops, Inv, Fin

lyft-20200331
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________________________________________________
FORM 10-Q
_________________________________________________________________
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2020 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                to                
Commission File Number: 001-38846
_________________________________________________________________
Lyft, Inc.
(Exact name of registrant as specified in its charter)
_________________________________________________________________
Delaware20-8809830
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
185 Berry Street, Suite 5000
San Francisco, California 94107
(Address of registrant’s principal executive offices, including zip code)
(844) 250-2773
(Registrant’s telephone number, including area code)
_________________________________________________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A common stock, par value of $0.00001 per shareLYFTNasdaq Global Select Market
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes      No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).     Yes       No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes      No  
As of May 4, 2020, the number of shares of the registrant’s Class A common stock outstanding was 298,006,919 and the number of shares of the registrant’s Class B common stock outstanding was 8,802,629.



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NOTE ABOUT FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the federal securities laws, which statements involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. Forward-looking statements contained in this Quarterly Report on Form 10-Q include statements about:
our future financial performance, including our expectations regarding our revenue, cost of revenue, operating expenses, including capital expenditures related to asset-intensive offerings, our ability to determine insurance, legal and other reserves and our ability to achieve and maintain future profitability;
the sufficiency of our cash, cash equivalents and short-term investments to meet our liquidity needs;
the impact of the COVID-19 pandemic and related responses of business and governments to the pandemic on our operations and personnel, on commercial activity and demand across our platform, business operations and results of operations, and on our ability to forecast our financial and operating results;
the demand for our platform or for Transportation-as-a-Service networks in general;
our ability to attract and retain drivers and riders;
our ability to develop new offerings and bring them to market in a timely manner and make enhancements to our platform;
our ability to compete with existing and new competitors in existing and new markets and offerings;
our expectations regarding outstanding litigation, including with respect to the classification of drivers on our platform;
our expectations regarding the effects of existing and developing laws and regulations, including with respect to the classification of drivers on our platform, taxation and privacy and data protection;
our ability to manage and insure auto-related and operations-related risks associated with our Transportation-as-a-Service network;
our expectations regarding new and evolving markets and our efforts to address these markets, including autonomous vehicles and bikes and scooters as well as Driver Centers and Lyft Rentals;
our ability to develop and protect our brand;
our ability to maintain the security and availability of our platform;
our expectations and management of future growth and business operations, including our recent plan of termination;
our expectations concerning relationships with third parties;
our ability to maintain, protect and enhance our intellectual property;
our ability to successfully acquire and integrate companies and assets; and
the increased expenses associated with being a public company.
We caution you that the foregoing list may not contain all of the forward-looking statements made in this Quarterly Report on Form 10-Q.
You should not rely upon forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report on Form 10-Q primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations and prospects. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors, including those described in the section titled “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report on Form 10-Q. We cannot assure you that the results, events and circumstances reflected in
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the forward-looking statements will be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.
The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make.
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.
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PART I – FINANCIAL INFORMATION
Item 1. Financial statements
Lyft, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except for share and per share data)
(unaudited)
March 31
2020
December 31
2019
Assets
Current assets
Cash and cash equivalents$597,889  $358,319  
Short-term investments2,071,991  2,491,805  
Prepaid expenses and other current assets474,874  397,239  
Total current assets3,144,754  3,247,363  
Restricted cash and cash equivalents529,091  204,976  
Restricted investments940,827  1,361,045  
Other investments10,000    
Property and equipment, net360,546  188,603  
Operating lease right-of-use assets307,774  441,258  
Intangible assets, net88,744  82,919  
Goodwill180,590  158,725  
Other assets9,432  6,494  
Total assets$5,571,758  $5,691,383  
Liabilities, Redeemable Convertible Preferred Stock and Stockholders’ Equity
Current liabilities
Accounts payable$540,495  $38,839  
Insurance reserves975,132  1,378,462  
Accrued and other current liabilities991,386  939,865  
Operating lease liabilities — current44,127  94,199  
Total current liabilities2,551,140  2,451,365  
Operating lease liabilities305,851  382,077  
Long-term debt, net of current portion82,141    
Other liabilities25,137  3,857  
Total liabilities2,964,269  2,837,299  
Commitments and contingencies (Note 7)
Stockholders’ equity
Preferred stock, $0.00001 par value; 1,000,000,000 shares authorized as of March 31, 2020 and December 31, 2019; no shares issued and outstanding as of March 31, 2020 and December 31, 2019
    
Common stock, $0.00001 par value; 18,000,000,000 Class A shares authorized as of March 31, 2020 and December 31, 2019; 297,989,705 and 293,793,151 Class A shares issued and outstanding, as of March 31, 2020 and December 31, 2019, respectively; 100,000,000 Class B shares authorized, 8,802,629 Class B shares issued and outstanding, as of March 31, 2020 and December 31, 2019
3  3  
Additional paid-in capital8,554,471  8,398,927  
Accumulated other comprehensive income (loss)(1,341) 2,725  
Accumulated deficit(5,945,644) (5,547,571) 
Total stockholders’ equity2,607,489  2,854,084  
Total liabilities and stockholders’ equity$5,571,758  $5,691,383  
The accompanying notes are an integral part of these condensed consolidated financial statements.
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Lyft, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except for per share data)
(unaudited)
Three Months Ended March 31,
20202019
Revenue$955,712  $776,027  
Costs and expenses
Cost of revenue542,419  462,857  
Operations and support133,782  187,235  
Research and development258,739  630,960  
Sales and marketing196,437  275,129  
General and administrative238,440  376,736  
Total costs and expenses1,369,817  1,932,917  
Loss from operations(414,105) (1,156,890) 
Interest income21,327  19,654  
Other income (expense), net(3,665) 146  
Loss before income taxes(396,443) (1,137,090) 
Provision for income taxes1,630  1,383  
Net loss$(398,073) $(1,138,473) 
Net loss per share, basic and diluted$(1.31) $(48.53) 
Weighted-average number of shares outstanding used to compute net loss per share, basic and diluted304,502  23,459  
Stock-based compensation included in costs and expenses:
Cost of revenue$9,724  $41,489  
Operations and support4,133  51,404  
Research and development95,548  506,206  
Sales and marketing4,750  45,111  
General and administrative45,823  215,276  
The accompanying notes are an integral part of these condensed consolidated financial statements.
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Lyft, Inc.
Condensed Consolidated Statements of Comprehensive Loss
(in thousands)
(unaudited)
Three Months Ended March 31,
20202019
Net loss$(398,073) $(1,138,473) 
Other comprehensive (loss) income
Foreign currency translation adjustment(1,344) 247  
Unrealized gain (loss) on marketable securities, net of taxes(2,722) 1,806  
Other comprehensive (loss) income(4,066) 2,053  
Comprehensive loss$(402,139) $(1,136,420) 

The accompanying notes are an integral part of these condensed consolidated financial statements.
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Lyft, Inc.
Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)
(in thousands)
(unaudited)
Three Months Ended March 31, 2019
Redeemable
Convertible
Preferred Stock
Common Stock
Additional
Paid-in
Capital
Accumulated
Deficit
Accumulated
Other
Comprehensive
Income (Loss)
Total
Stockholders’
Deficit
Shares
Amount
Shares
Amount
Balances as of December 31, 2018219,176  $5,152,047  22,438  $  $73,916  $(2,945,330) $133  $(2,871,281) 
Issuance of common stock upon exercise of stock options—  —  7,121  —  1,599  —  —  1,599  
Issuance of common stock upon settlement of restricted stock units—  —  17,688  —  —  —  —  —  
Shares withheld related to net share settlement—  —  (11,415) —  (785,004) —  —  (785,004) 
Vesting of early exercised stock options—  —  —  —  2  —  —  2  
Stock-based compensation—  —  —  —  859,486  —  —  859,486  
Other comprehensive income—  —  —  —  —  —  2,053  2,053  
Net loss—  —  —  —  —  (1,138,473) —  (1,138,473) 
Balances as of March 31, 2019219,176  $5,152,047  35,832  $  $149,999  $(4,083,803) $2,186  $(3,931,618) 

Three Months Ended March 31, 2020
Redeemable
Convertible
Preferred Stock
Class A and Class B
Common Stock
Additional
Paid-in
Capital
Accumulated
Deficit
Accumulated
Other
Comprehensive
Income (Loss)
Total
Stockholders’ Equity
Shares
Amount
Shares
Amount
Balances as of December 31, 2019  $  302,596  $3  $8,398,927  $(5,547,571) $2,725  $2,854,084  
Issuance of common stock upon exercise of stock options—  —  504  —  2,329  —  —  2,329  
Issuance of common stock upon settlement of restricted stock units—  —  3,838  —  —  —  —  —  
Shares withheld related to net share settlement—  —  (146) —  (6,763) —  —  (6,763) 
Stock-based compensation—  —  —  —  159,978  —  —  159,978  
Other comprehensive income (loss)—  —  —  —  —  —  (4,066) (4,066) 
Net loss—  —  —  —  —  (398,073) —  (398,073) 
Balances as of March 31, 2020  $  306,792  $3  $8,554,471  $(5,945,644) $(1,341) $2,607,489  
The accompanying notes are an integral part of these condensed consolidated financial statements.
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Lyft, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Three Months Ended March 31,
20202019
Cash flows from operating activities
Net loss$(398,073) $(1,138,473) 
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization35,474  23,135  
Stock-based compensation159,978  859,486  
Amortization of premium on marketable securities486  24  
Accretion of discount on marketable securities(7,826) (10,081) 
Loss on disposal of assets3,228    
Other87  103  
Changes in operating assets and liabilities
Prepaid expenses and other assets(83,653) (46,307) 
Operating lease right-of-use assets20,257  19,518  
Accounts payable500,004  1,161  
Insurance reserves(403,330) 126,711  
Accrued and other liabilities(25,338) 94,238  
Lease liabilities(8,220) (14,342) 
Net cash used in operating activities(206,926) (84,827) 
Cash flows from investing activities
Purchases of marketable securities(1,179,343) (607,190) 
Purchase of non-marketable security(10,000)   
Purchases of term deposits(75,000)   
Proceeds from sales of marketable securities406,508  466,174  
Proceeds from maturities of marketable securities1,661,458  838,177  
Proceeds from maturity of term deposit30,000    
Purchases of property and equipment and scooter fleet(34,476) (25,126) 
Cash paid for acquisitions, net of cash acquired(12,440) (1,711) 
Other investing activities960    
Net cash provided by investing activities787,667  670,324  
Cash flows from financing activities
Repayment of loans(6,087)   
Proceeds from exercise of stock options and other common stock issuances2,372  1,601  
Payment of deferred offering costs  (5,044) 
Taxes paid related to net share settlement of equity awards(6,762) (784,724) 
Principal payments on finance lease obligations (6,167)   
Net cash used in financing activities(16,644) (788,167) 
Effect of foreign exchange on cash, cash equivalents and restricted cash and cash equivalents(120) 102  
Net increase (decrease) in cash, cash equivalents and restricted cash and cash equivalents563,977  (202,568) 
Cash, cash equivalents and restricted cash and cash equivalents
Beginning of period564,465  706,486  
End of period$1,128,442  $503,918  
Reconciliation of cash, cash equivalents and restricted cash and cash equivalents to the consolidated balance sheets
Cash and cash equivalents$597,889  $329,515  
Restricted cash and cash equivalents529,091  172,506  
Restricted cash, included in prepaid expenses and other current assets1,462  1,897  
Total cash, cash equivalents and restricted cash and cash equivalents$1,128,442  $503,918  
Non-cash investing and financing activities
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Three Months Ended March 31,
20202019
Purchases of property and equipment, and scooter fleet not yet settled$7,585  $16,612  
Deferred offering costs accrued, unpaid  2,240  
Right-of-use assets acquired under operating leases19,861  38,488  
Purchases of property and equipment financed by seller3,464    
Settlement of pre-existing right-of-use assets under operating leases in connection with acquisition of Flexdrive133,088    
Settlement of pre-existing lease liabilities under operating leases in connection with acquisition of Flexdrive130,089    
The accompanying notes are an integral part of these condensed consolidated financial statements.

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Lyft, Inc.
Notes to the Condensed Consolidated Financial Statements
(unaudited)
1. Description of Business and Basis of Presentation
Organization and Description of Business
Lyft, Inc. (the “Company” or “Lyft”) is incorporated in Delaware with its headquarters in San Francisco, California. The Company operates multimodal transportation networks in the United States and Canada that offer access to a variety of transportation options through the Company’s platform and mobile-based applications. This network enables multiple modes of transportation including the facilitation of peer-to-peer ridesharing by connecting drivers who have a car with passengers who need a ride. The Company’s proprietary technology platform (the “Lyft Platform”) provides a marketplace where drivers can be matched with passengers via the Lyft mobile application (the “App”) where the Company operates as a Transportation Network Company (“TNC”).
Transportation options through the Company’s platform and mobile-based applications is substantially comprised of its ridesharing marketplace that connects drivers and riders in cities across the United States and in select cities in Canada, Lyft’s network of shared bikes and scooters ("Light Vehicles"), the Express Drive program which is a flexible car rental program for users who want to drive using the Lyft Platform but do not have access to a vehicle that meets Lyft's requirements, and Lyft Rentals, a consumer offering for users who have long-distance trips, like a weekend away.
Transfer of Certain Legacy Auto Liability Insurance
On March 31, 2020, the Company’s wholly-owned subsidiary, Pacific Valley Insurance Company, Inc. (“PVIC”), entered into a Novation Agreement (the “Novation”) with Clarendon National Insurance Company, a subsidiary of Enstar Group Limited (“Clarendon”), and certain underwriting companies of Zurich North America (“Zurich”). Pursuant to the terms of the Novation, on the effective date March 31, 2020, the obligations of PVIC as reinsurer to Zurich for certain legacy auto liability insurance business underwritten between October 1, 2015 and September 30, 2018 ("Legacy Auto Liability"), were assigned to, assumed by, and novated to Clarendon, for cash consideration of $465.0 million. The Company paid the $465.0 million cash consideration to Clarendon on April 3, 2020 which is the date when certain Clarendon trust agreements were executed and the trust accounts were established in order to secure the applicable payments subject to Novation. In conjunction with the Novation, Clarendon and PVIC executed a binding letter of intent to enter into an Excess of Loss Retrocession Agreement (“Retrocession Agreement”). The execution of the binding letter of intent did not have a material impact on the condensed consolidated financial statements as of March 31, 2020. Refer to Note 4 “Supplemental Financial Statement Information” to the condensed consolidated financial statements for information regarding this transaction.
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and the requirements of the U.S. Securities and Exchange Commission (the “SEC”) for interim reporting. The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
The condensed consolidated balance sheet as of December 31, 2019 included herein was derived from the audited financial statements as of that date. The accompanying unaudited condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to state fairly the Company’s financial position, results of operations, comprehensive loss, redeemable convertible preferred stock and stockholders’ equity (deficit), and cash flows for the periods presented, but are not necessarily indicative of the results of operations to be anticipated for any future annual or interim period.
2. Summary of Significant Accounting Policies
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and reported amounts of revenues and expenses during the reporting periods. The Company bases its estimates on various factors and information which may include, but are not limited to, history and prior experience, expected future results, new related events and economic conditions, which form the basis for making
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judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results could differ materially from those estimates.
Significant items subject to estimates and assumptions include those related to losses resulting from insurance claims, fair value of financial instruments, goodwill and identifiable intangible assets, leases, indirect tax obligations, legal contingencies, valuation allowance for deferred income taxes, and valuation of stock-based compensation.
The outbreak of the coronavirus (“COVID-19”) was declared a pandemic by the World Health Organization in March 2020, and continues to spread in the United States, Canada, and in many other countries globally. The extent to which the Company's operations will be impacted by the COVID-19 pandemic will depend largely on future developments, which are highly uncertain and cannot be accurately predicted, including the duration of the pandemic, new information which may emerge concerning the severity of the pandemic and actions by government authorities and private businesses to contain the pandemic or respond to its impact, among other things. The Company has adopted several measures in response to the COVID-19 pandemic, including making adjustments to expenses and cash flow to correlate with anticipated declines in revenue, instructing employees to work from home, distributing thousands of bottles of hand sanitizer and masks to drivers, and restricting non-critical business travel by employees. On April 29, 2020, the Company committed to a restructuring plan which involved the termination of approximately 17% of its employees, furlough of approximately 288 employees, and temporary salary reductions for all exempt employees and board members. Refer to Note 13 “Subsequent Events” to the condensed consolidated financial statements for information regarding this reduction in workforce. The Company cannot be certain that these actions will mitigate the negative effects of the pandemic on our business. As of the date of issuance of the financial statements, we are not aware of any specific event or circumstance that would require us to update our estimates, judgments or revise the carrying value of our assets or liabilities. These estimates may change, as new events occur and additional information is obtained, and could lead to impairment of long lived assets or goodwill, or credit losses associated with investments or other assets, and the impact of such changes on estimates will be recognized in the condensed consolidated financial statements as soon as they become known. Actual results could differ from those estimates and any such differences may be material to our financial statements.
Revenue Recognition
The Company generates its revenue from its multimodal transportation networks that offer access to a variety of transportation options through the Lyft Platform and mobile-based applications. Substantially all of the Company’s revenue is generated from its ridesharing marketplace that connects drivers and passengers and is recognized in accordance with Accounting Standards Codification Topic 606 (“ASC 606”). The Company also generates rental revenue from Flexdrive, its network of Light Vehicles, and Lyft Rentals, which is recognized in accordance with Accounting Standards Codification Topic 842 (“ASC 842”).
The table below presents the Company's revenues as included in the condensed consolidated statements of operations (in thousands):
Three Months Ended March 31,
20202019
Revenue from contracts with customers (ASC 606)$918,331  $755,894  
Rental revenue (ASC 842)37,381  20,133  
Total revenue$955,712  $776,027  
Revenue from Contracts with Customers (ASC 606)
The Company recognizes revenue for its rideshare marketplace in accordance with ASC 606. The Company generates revenue from service fees and commissions (collectively, “fees”) paid by drivers for use of the Lyft Platform and related activities to connect drivers with passengers to facilitate and successfully complete rides via the App where the Company operates as a TNC. The Company recognizes revenue upon completion of each ride. Drivers enter into terms of service (“ToS”) with the Company in order to use the Lyft Driver App. Under the ToS, drivers agree that the Company retains the applicable fee as consideration for their use of the Lyft Platform and related activities from the fare and related charges it collects from passengers on behalf of drivers. The Company is acting as an agent in facilitating the ability for a driver to provide a transportation service to a passenger. The Company reports revenue on a net basis, reflecting the fee owed to the Company from a driver as revenue, and not the gross amount collected from the passenger.
As the Company’s customary business practice, a contract exists between the driver and the Company when the driver’s ability to cancel the ride lapses, which typically is upon pickup of the passenger. The Company’s single performance obligation in the transaction is to connect drivers with passengers to facilitate the completion of a successful transportation service for passengers. The Company recognizes revenue upon completion of a ride as its performance obligation is satisfied upon the completion of the ride. The Company collects the fare and related charges from passengers on behalf of drivers using
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the passenger’s pre-authorized credit card or other payment mechanism and retains its fees before making the remaining disbursement to drivers; thus the driver’s ability and intent to pay is not subject to significant judgment.
The Company recognizes revenue from subscription fees paid to access transportation options through the Lyft Platform and mobile-based applications over the applicable subscription period in accordance with ASC 606.
Rental Revenue (ASC 842)
The Company generates rental revenues primarily from Flexdrive, its network of Light Vehicles, and Lyft Rentals. Rental revenues are recognized for rental and rental related activities where an identified asset is transferred to the customer and the customer has the ability to control that asset in accordance with ASC 842.
Under the Flexdrive and Lyft Rentals programs, the Company operates a fleet of rental vehicles comprised of both vehicles owned by the Company and vehicles leased from third-party leasing companies (“head leases”). The Company either leases or subleases vehicles to drivers and Lyft Rentals, renters as a result, the Company considers itself to be the accounting lessor or sublessor, as applicable, in these arrangements in accordance with ASC 842. Fleet operating costs include monthly fixed lease payments and other vehicle operating or ownership costs, as applicable. For vehicles that are subleased, sublease income and head lease expense for these transactions are recognized on a gross basis in the condensed consolidated financial statements. Drivers who rent vehicles are charged rental fees, which the Company collects from the driver by deducting such amounts from the driver’s earnings on the Lyft Platform, or through charging the driver’s credit card.
Due to the short-term nature of the Flexdrive, Lyft Rentals, and Light Vehicle transactions, the Company classifies these rentals as operating leases. Revenue generated from single-use ride fees paid by riders of Light Vehicles is recognized upon completion of each related ride. Revenue generated from Flexdrive and Lyft Rentals is recognized evenly over the rental period, which is typically seven days.
Enterprise and Trade Receivables
The Company collects any fees owed for completed transactions on the Lyft Platform primarily from the passenger’s authorized payment method. Uncollected fees are included in prepaid expenses and other current assets in the condensed consolidated balance sheets and represent receivables from (i) participants in the Company’s enterprise programs (“Enterprise Users”), where the transactions have been completed and the amounts owed from the Enterprise Users have either been invoiced or are unbilled as of the reporting date; and (ii) passengers where the authorized payment method is credit card but the fare amounts have not yet settled with third-party payment processors. Under the ToS, drivers agree that the Company retains the applicable fee as consideration for their use of the Lyft Platform and related activities from the fare and related charges it collects from passengers on behalf of drivers. Accordingly, the Company has no trade receivables from drivers. The portion of the fare receivable to be remitted to drivers is included in accrued and other current liabilities in the condensed consolidated balance sheets.
The Company records an allowance for credit losses for fees owed for completed transactions that may never settle or be collected. As a result of the adoption of Accounting Standards Update No. 2016-13 “Financial Instruments—Credit Losses" (“ASC 326”), the Company’s measurement of the allowance for credit losses has been augmented to reflect the change from the incurred loss model to the expected credit loss model. The allowance for credit losses reflects the Company’s current estimate of expected credit losses inherent in the enterprise and trade receivables balance. In determining the expected credit losses, the Company considers its historical loss experience, the aging of its receivable balance, current economic and business conditions, and anticipated future economic events that may impact collectability. The Company reviews its allowance for credit losses periodically and as needed, and amounts are written off when determined to be uncollectible.
The Company’s receivable balance, which consists primarily of amounts due from Enterprise Users, were $124.9 million and $120.0 million as of March 31, 2020 and December 31, 2019, respectively. The Company's allowance for credit losses was $10.1 million as of March 31, 2020. The change in the allowance for credit losses for the three months ended March 31, 2020 was not material.
Incentive Programs
The Company offers incentives to attract drivers, passengers, riders of Light Vehicles and Lyft Rentals renters to use the Lyft Platform. Drivers generally receive cash incentives while passengers, Light Vehicle riders and Lyft Rentals renters generally receive free or discounted rides under such incentive programs. Incentives provided to drivers, Light Vehicle riders and Lyft Rental renters, the customers of the Company, are accounted for as a reduction of the transaction price. As the passengers are not the Company’s customers, incentives provided to passengers are generally recognized as sales and marketing expense except for certain pricing programs described below.
Driver Incentives
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The Company offers various incentive programs to drivers, including minimum guaranteed payments, volume-based discounts and performance-based bonus payments. These driver incentives are similar to retrospective volume-based rebates and represent variable consideration that is typically settled within a week. The Company reduces the transaction price by the estimated amount of the incentives expected to be paid upon completion of the performance criteria by applying the most likely outcome method. Therefore, such driver incentives are recorded as a reduction to revenue. Driver incentives are recorded as a reduction to revenue if the Company does not receive a distinct good or service in exchange for the payment or cannot reasonably estimate the fair value of the good or service received. Driver incentives for referring new drivers or passengers are accounted for as sales and marketing expense. The amount recorded as an expense is the lesser of the amount of the payment or the established fair value of the benefit received. The fair value of the benefit is established using amounts paid to third parties for similar services.
Passenger Incentives
The Company has several passenger incentive programs, which are offered to encourage passenger activity on the Lyft Platform. Generally, the passenger incentive programs are as follows:
(i)Market-wide marketing promotions and discounts on shared rides. Market-wide promotions reduce the fare charged by drivers to passengers for all or substantially all rides in a specific market. This type of incentive effectively reduces the overall pricing of the service provided by drivers for that specific market and the gross fare charged by the driver to the passenger, and thereby results in a lower fee earned by the Company. In addition, discounted pricing on shared rides may result in a reduced fee earned by the Company. Accordingly, the Company records these types of incentives as a reduction to revenue at the date it records the corresponding revenue transaction.
(ii)Targeted marketing promotions. Targeted marketing promotions are used to promote the use of the Lyft Platform to a targeted group of passengers. An example is a promotion where the Company offers a number of discounted rides (capped at a given number of rides) which are valid only during a limited period of time to a targeted group of passengers. The Company believes that the incentives that provide consideration to passengers to be applied to a limited number of rides are similar to marketing coupons. These incentives differ from the market-wide marketing promotions because they do not reduce the overall pricing of the service provided by drivers for a specific market. During the promotion period, passengers not utilizing an incentive would be charged the full fare. These incentives represent marketing costs. When a passenger redeems the incentive, the Company recognizes revenue equal to the transaction price and the cost of the incentive is recorded as sales and marketing expense.
(iii)Passenger referral programs. Under the passenger referral program, the referring passenger (the referrer) earns referral coupons when a new passenger (the referee) completes their first ride on the Lyft Platform. The Company records the incentive as a liability at the time the incentive is earned by the referrer with the corresponding charge recorded to sales and marketing expense. Referral coupons typically expire within one year. The Company estimates breakage using its historical experience. As of March 31, 2020 and December 31, 2019, the passenger referral coupon liability was not material.
Light Vehicle Riders and Lyft Rentals Renters Incentives
Incentives offered to Light Vehicle riders and Lyft Rentals renters were not material for the three months ended March 31, 2020 and 2019.
For the three months ended March 31, 2020 and 2019, in relation to the driver, passenger, Light Vehicle riders, and Lyft Rentals renters incentive programs, the Company recorded $112.2 million and $139.6 million as a reduction to revenue and $100.1 million and $120.9 million as sales and marketing expense, respectively.
Investments
Debt Securities
The Company’s accounting for its debt securities varies depending on the legal form of the security, the Company’s intended holding period for the security, and the nature of the transaction. Investments in debt securities include commercial paper, certificates of deposit and corporate bonds. Investments in debt securities are classified as available-for-sale and are recorded at fair value.
The Company considers an available-for-sale debt security to be impaired if the fair value of the investment is less than its amortized cost basis. The entire difference between the amortized cost basis and the fair value of the Company’s available-for-sales debt security is recognized in the condensed consolidated statements of operations as an impairment if, (i) the fair value of the security is below its amortized cost and (ii) the Company intends to sell or is more likely than not required
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to sell the security before recovery of its amortized cost basis. If neither criterion is met, the Company evaluates whether the decline in fair value is due to credit losses or other factors. In making this assessment, the Company considers the extent to which the security’s fair value is less than amortized cost, changes to the rating of the security by third-party rating agencies, and adverse conditions specific to the security, among other factors. If the Company's assessment indicates that a credit loss exists, the credit loss is measured based on the Company's best estimate of the cash flows expected to be collected. When developing its estimate of cash flows expected to be collected, the Company considers all available information relevant to the collectability of the security, including past events, current conditions, and reasonable and supportable forecasts.
Credit loss impairments are recognized through an allowance for credit losses adjustment to the amortized cost basis of the debt securities on the balance sheet with an offsetting credit loss expense in the condensed consolidated statements of operations. Impairments related to factors other than credit losses are recognized as an adjustment to the amortized cost basis of the security and an offsetting amount in accumulated other comprehensive income (loss), net of tax. As of March 31, 2020, the Company had not recorded any credit impairments. The Company determines realized gains or losses on the sale of debt securities on a specific identification method.
The Company's investments in debt securities include:
(i)Cash and cash equivalents. Cash equivalents include certificates of deposits, commercial paper and corporate bonds that have an original maturity of 90 days or less and are readily convertible to known amounts of cash.
(ii)Short-term investments. Short-term investments are comprised of commercial paper, certificates of deposit, and corporate bonds, which mature in twelve months or less. The Company considers its investments as available to support its current operations. As a result, the Company classifies these investments as current assets in the accompanying condensed consolidated balance sheets.
(iii)Restricted investments. Restricted investments are comprised of debt security investments in commercial paper, certificates of deposit, and corporate bonds which are held in trust accounts at third-party financial institutions pursuant to certain contracts with insurance providers.
Non-marketable Equity Securities
The Company has elected to measure its investments in non-marketable equity securities at cost, with remeasurements to fair value only upon the occurrence of observable transactions for identical or similar investments of the same issuer or impairment. The Company qualitatively assesses whether indicators of impairment exist. Factors considered in this assessment include the investees’ financial and liquidity position, access to capital resources, exposure to industries and markets impacted by COVID-19, and the time since the last adjustment to fair value, among others. If an impairment exists, the Company estimates the fair value of the investment by using the best information available, which may include cash flow projections or other available market data, and recognizes a loss for the amount by which the carrying value exceeds the fair value of the investment in the condensed consolidated statements of operations.
Insurance Reserves
The Company utilizes both a wholly-owned captive insurance subsidiary and third-party insurance, which may include deductibles and self-insured retentions, to insure or reinsure costs including auto liability, uninsured and underinsured motorist, auto physical damage, first party injury coverages including personal injury protection under state law and general business liabilities up to certain limits. The recorded liabilities reflect the estimated ultimate cost for claims incurred but not paid and claims that have been incurred but not yet reported and any estimable administrative run-out expenses related to the processing of these outstanding claim payments. Liabilities are evaluated for appropriateness with claims reserve valuations provided by an independent third-party actuary on a quarterly basis.
Insurance claims may take several years to completely settle, and the Company has limited historical loss experience. Because of the limited operational history, the Company makes certain assumptions based on currently available information and industry statistics and utilizes actuarial models and techniques to estimate the reserves. A number of factors can affect the actual cost of a claim, including the length of time the claim remains open, economic and healthcare cost trends and the results of related litigation. Furthermore, claims may emerge in future years for events that occurred in a prior year at a rate that differs from previous actuarial projections. Reserves are continually reviewed and adjusted as necessary as experience develops or new information becomes known. However, while the Company believes that the insurance reserve amount is adequate, the ultimate liability may be in excess of, or less than, the amount provided. As a result, the net amounts that will ultimately be paid to settle the liability and when amounts will be paid may vary from the estimated amounts provided for in the condensed consolidated balance sheets.
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Leases
The Company adopted ASC 842 using the modified retrospective approach with an effective date as of the beginning of the fiscal year, January 1, 2019. The Company elected the package of transition provisions available for expired or existing contracts, which allowed the Company to carryforward the historical assessments of (1) whether contracts are or contain leases, (2) lease classification and (3) initial direct costs. In accordance with ASC 842, the Company determines if an arrangement is or contains a lease at contract inception by assessing whether the arrangement contains an identified asset and whether the lessee has the right to control such asset. The Company determines the classification and measurement of its leases upon lease commencement. The Company enters into certain agreements as a lessor and either leases or subleases the underlying asset in the agreement to customers. The Company also enters into certain agreements as a lessee. If any of the following criteria are met, the Company classifies the lease as a financing lease (as a lessee) or as a direct financing or sales-type lease (both as a lessor):
The lease transfers ownership of the underlying asset to the lessee by the end of the lease term;
The lease grants the lessee an option to purchase the underlying asset that the Company is reasonably certain to exercise;
The lease term is for 75% or more of the remaining economic life of the underlying asset, unless the commencement date falls within the last 25% of the economic life of the underlying asset;
The present value of the sum of the lease payments equals or exceeds 90% of the fair value of the underlying asset; or
The underlying asset is of such a specialized nature that it is expected to have no alternative use to the lessor at the end of the lease term.
Leases that do not meet any of the above criteria are accounted for as operating leases.
Lessor
The Company's lease arrangements include vehicle rentals to drivers or renters under the Flexdrive and Lyft Rentals programs and Light Vehicle rentals to single-use riders. Due to the short-term nature of these arrangements, the Company classifies these leases as operating leases. The Company does not separate lease and non-lease components, such as insurance or roadside assistance provided to the lessee, in its lessor lease arrangements. Lease payments are primarily fixed and are recognized as revenue in the period over which the lease arrangement occurs. Taxes or other fees assessed by governmental authorities that are both imposed on and concurrent with each lease revenue-producing transaction and collected by the Company from the lessee are excluded from the consideration in its lease arrangements. The Company mitigates residual value risk of its leased assets by performing regular maintenance and repairs, as necessary, and through periodic reviews of asset depreciation rates based on the Company's ongoing assessment of present and estimated future market conditions.
Lessee
The Company's leases include real estate property to support its operations and Flexdrive vehicles that may be used by drivers to provide ridesharing services on the Lyft Platform or renters for personal reasons through Lyft Rentals. For leases with a term greater than 12 months, the Company records the related right-of-use asset and lease liability at the present value of lease payments over the term. The lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise such options. The Company does not separate lease and non-lease components of contracts for real estate property leases, but has elected to do so for vehicle leases when non-lease components exist in these arrangements. For certain leases, the Company also applies a portfolio approach to account for right-of-use assets and lease liabilities that are similar in nature and have nearly identical contract provisions.
The Company’s leases do not provide a readily determinable implicit rate. Therefore, the Company estimates its incremental borrowing rate to discount the lease payments based on information available at lease commencement. The Company determines its incremental borrowing rate based on the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term, an amount equal to the lease payments in a similar economic environment.
Lease payments may be fixed or variable; however, only fixed payments are included in the Company’s lease liability calculation. Operating leases are included in operating lease right-of-use assets, operating lease liabilities — current and operating lease liabilities on the condensed consolidated balance sheets. Lease costs for the Company's operating leases are recognized on a straight-line basis primarily within operating expenses over the lease term. Finance leases are included in property and equipment, net, accrued and other current liabilities, and other liabilities on the condensed consolidated balance sheets. Finance lease assets are amortized on a straight-line basis over the shorter of the estimated useful lives of the assets or the lease term in cost of revenue on the condensed consolidated statements of operations. The interest component of finance leases is included in cost of revenue on the condensed consolidated statements of operations and recognized using the effective
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interest method over the lease term. Variable lease payments are recognized primarily in operating expenses in the period in which the obligation for those payments are incurred.
Recent Accounting Pronouncements
Recently Adopted Accounting Pronouncements
In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13 “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”, which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. This standard replaces the existing incurred loss impairment model with an expected loss model which requires the use of forward-looking information to calculate credit loss estimates. It also eliminates the concept of other-than-temporary impairment and requires credit losses related to available-for-sale debt securities to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. Effective on January 1, 2020, the Company adopted this standard using the modified retrospective transition method. The adoption had no impact on the accumulated deficit on the condensed consolidated balance sheet as of March 31, 2020.
In August 2018, the FASB issued ASU No. 2018-15, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract.” This standard aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The implementation costs incurred in a hosting arrangement that is a service contract should be presented as a prepaid asset on the balance sheet and expensed over the term of the hosting arrangement to the same line item in the statements of operations as the costs related to the hosting fees. Effective on January 1, 2020, the Company adopted this standard using the prospective transition method, which did not have a material impact on the condensed consolidated financial statements.
In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820).” This standard modifies disclosure requirements related to fair value measurement by removing certain disclosure requirements related to the fair value hierarchy, modifying existing disclosure requirements related to measurement uncertainty and adding new disclosure requirements, such as disclosing the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and disclosing the range and weighted average of significant unobservable inputs used to develop Level 3 measurements. Effective on January 1, 2020, the Company adopted this standard, which did not have a material impact on the condensed consolidated financial statements.
Recently Issued Accounting Pronouncements Not Yet Adopted
In December 2019, the FASB issued ASU No. 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes", which is intended to simplify the accounting for income taxes by removing certain exceptions and by updating accounting requirements around franchise taxes, goodwill recognized for tax purposes, the allocation of current and deferred tax expense among legal entities, among other minor changes. This new standard will be effective for the Company for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently assessing the impact of adopting this standard on the condensed consolidated financial statements. 
In January 2020, the FASB issued ASU No. 2020-01, "Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815): Clarifying the Interactions between Topic 321, Topic 323, and Topic 815", which clarifies the interaction of the accounting for equity securities under Topic 321 and investments accounted for under the equity method of accounting under Topic 323, and the accounting for certain forward contracts and purchased options accounted for under Topic 815. This new standard will be effective for the Company for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently assessing the impact of adopting this standard on the condensed consolidated financial statements.
3. Acquisitions
Acquisition of Flexdrive Services, LLC (“Flexdrive”)
On February 7, 2020 (the “Closing Date”), the Company completed its acquisition of Flexdrive for approximately $20.0 million and treated the acquisition as a business combination. The acquisition is expected to contribute to the growth of the Company's current business, and help expand the range of the Company's use cases and the breadth of the Company's multimodal offerings. Prior to the acquisition, the Company acted as the lessee of Flexdrive’s vehicles and sublessor for each vehicle prior to its rental by drivers. As of the Closing Date, the Company had approximately $133.1 million of operating lease right-of-use assets and $130.1 million of operating lease liabilities on the balance sheet related to this preexisting contractual relationship with Flexdrive. This preexisting contractual relationship and others were settled on the Closing Date as an adjustment to the purchase price.
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Acquisition costs were immaterial and are included in general and administrative expenses in the condensed consolidated statements of operations for the periods ended March 31, 2020 and December 31, 2019.
The following table summarizes the fair value of the assets acquired and liabilities assumed at the Closing Date (in thousands):
Cash and cash equivalents$587  
Prepaid expenses and other current assets276  
Property and equipment111,881  
Finance lease right-of-use assets56,014  
Identifiable intangible assets - developed technology13,200  
Total identifiable assets acquired181,958  
Loans134,121  
Finance lease & other liabilities57,265  
Total liabilities assumed191,386  
Net liabilities assumed(9,428) 
Goodwill22,455  
Total acquisition consideration$13,027  
Goodwill represents the excess of the total purchase consideration over the fair value of the underlying assets acquired and liabilities assumed. Goodwill is attributable to expected synergies and monetization opportunities from gaining control over the Flexdrive platform (“developed technology” intangible asset) and gaining greater flexibility in monetizing the fleet of owned and leased vehicles from the combined operations of the Company and Flexdrive. The acquisition is a taxable business combination for tax purposes and goodwill recognized in the acquisition is deductible for tax purposes.
The fair value of the developed technology intangible asset was determined to be $13.2 million with an estimated useful life of three years. The fair value of the developed technology was determined using the avoided cost approach. In the avoided cost approach, the fair value of an asset is based on the future after-tax costs which are avoided (or reduced) as a result of owning (or having the rights to) the asset for three years after the Closing Date. Indications of value were developed by discounting these benefits to their present value.
The results of operations for the acquired business have been included in the condensed consolidated statements of operations for the period subsequent to the Company's acquisition of Flexdrive. Flexdrive's results of operations for periods prior to this acquisition were not material to the condensed consolidated statements of operations and, accordingly, pro forma financial information has not been presented.
4. Supplemental Financial Statement Information
Cash Equivalents and Investments
The following tables summarize the cost or amortized cost, gross unrealized gain, gross unrealized loss and fair value of the Company’s cash equivalents and investments as of the dates indicated (in thousands):
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March 31, 2020
Cost or
Amortized
Cost
UnrealizedEstimated
Fair Value
GainsLosses
Unrestricted Balances(1)
Money market funds$204,000  $  $  $204,000  
Money market deposit accounts265,089      265,089  
Term deposits180,000      180,000  
Certificates of deposit899,550  1,166  (821) 899,895  
Commercial paper879,771