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FAIR VALUE MEASUREMENTS

3 Months Ended

Mar. 31, 2022

Financial assets and liabilities carried at fair value at March 31, 2022 and nonrecurring fair value measurements are classified in the categories described in the table below (in millions):


	Level 1		Level 2		Level 3		Total
Recurring fair value measurements
ASSETS:
Cash equivalents and restricted cash equivalents:
Money market fund investments	$	9,691	$	—	$	—	$	9,691





Time deposits and certificates of deposit	63		—		—		63
Short-term investments:



Debt securities	—		24		—		24



Long-term investments:







Equity securities	1,863		—		—		1,863
Derivatives:
Foreign currency exchange derivatives	—		11		—		11
Total assets at fair value	$	11,617	$	35	$	—	$	11,652

LIABILITIES:
Foreign currency exchange derivatives	$	—	$	19	$	—	$	19

Nonrecurring fair value measurements

Assets held for sale (1)	$	—	$	—	$	10	$	10

Total nonrecurring fair value measurements	$	—	$	—	$	10	$	10

(1) See Note 15 for additional information related to assets held for sale.

Financial assets and liabilities carried at fair value at December 31, 2021 and nonrecurring fair value measurements are classified in the categories described in the table below (in millions):


	Level 1		Level 2		Total
Recurring fair value measurements (1)
ASSETS:
Cash equivalents and restricted cash equivalents:
Money market fund investments	$	10,410	$	—	$	10,410



Time deposits and certificates of deposit	25		—		25
Short-term investments:
Debt securities	—		25		25



Long-term investments:






Equity securities	2,850		—		2,850
Derivatives:
Foreign currency exchange derivatives	—		5		5
Total assets at fair value	$	13,285	$	30	$	13,315

LIABILITIES:
Foreign currency exchange derivatives	$	—	$	11	$	11

Nonrecurring fair value measurements
Investments in equity securities of private companies (2)	$	—	$	325	$	325

Total nonrecurring fair value measurements	$	—	$	325	$	325

(1) The Company did not have any Level 3 fair value measurements at December 31, 2021.

(2) During the year ended December 31, 2021, the Company recorded upward adjustments to its investments in equity securities of private companies based on observable price changes in orderly transactions for identical or similar investments of the same issuer (see Note 5).

There are three levels of inputs to measure fair value. The definition of each input is described below:

Level 1: Quoted prices in active markets that are accessible by the Company at the measurement date for identical assets and liabilities.

Level 2: Inputs that are observable, either directly or indirectly. Such prices may be based upon quoted prices for identical or comparable securities in active markets or inputs not quoted on active markets, but corroborated by market data.

Level 3: Unobservable inputs are used when little or no market data is available.

Investments

See Note 5 for additional information related to the Company's investments.

The valuation of the Company's investment in debt securities is considered a "Level 2" valuation because the Company has access to quoted prices for identical or comparable securities, but does not have visibility into the volume and frequency of trading for this investment. A market approach is used for recurring fair value measurements and the valuation techniques use inputs that are observable, or can be corroborated by observable data, in an active marketplace.

Derivatives

The Company's derivative instruments are valued using pricing models. Pricing models take into account the contract terms as well as multiple inputs where applicable, such as interest rate yield curves, option volatility, and foreign currency exchange rates. The valuation of derivatives are considered "Level 2" fair value measurements. The Company's derivative instruments are typically short-term in nature. The Company reports the fair values of its derivative assets and liabilities on a gross basis in the Consolidated Balance Sheets in "Other current assets" and "Accrued expenses and other current liabilities," respectively.

In the normal course of business, the Company is exposed to the impact of foreign currency fluctuations which it mitigates by following established risk management policies and procedures, including the use of derivatives. The Company enters into foreign currency forward contracts to hedge its exposure to the impact of movements in foreign currency exchange rates primarily on its transactional balances denominated in currencies other than the functional currency and does not use derivatives for trading or speculative purposes. As of March 31, 2022 and December 31, 2021, the Company did not designate any foreign currency exchange derivatives as hedges for accounting purposes.

The table below provides estimated fair values and notional amounts of foreign currency exchange derivatives outstanding at March 31, 2022 and December 31, 2021 (in millions). The notional amount of a foreign currency forward contract is the contracted amount of foreign currency to be exchanged and is not recorded in the balance sheets.


	March 31, 2022		December 31, 2021
Estimated fair value of derivative assets	$	11	$	5
Estimated fair value of derivative liabilities	$	19	$	11

Notional amount:
Foreign currency purchases	$	1,360	$	840
Foreign currency sales	$	2,019	$	1,857

The Company recorded losses of $16 million and $9 million in "Other income (expense), net" in the Unaudited Consolidated Statements of Operations related to foreign currency exchange derivatives for the three months ended March 31, 2022 and 2021, respectively.

Other Financial Assets and Liabilities

At March 31, 2022 and December 31, 2021, the Company's cash consisted of bank deposits. Cash equivalents principally include money market fund investments, time deposits, and certificates of deposit and their carrying value generally approximates the fair value as they are readily convertible to known amounts of cash. Other financial assets and liabilities,

including restricted cash, accounts payable, accrued expenses, and deferred merchant bookings, are carried at cost which approximates their fair values because of the short-term nature of these items. Accounts receivable and other financial assets measured at amortized cost are carried at cost less an allowance for expected credit losses to present the net amount expected to be collected (see Note 7). See Note 9 for the estimated fair value of the Company's outstanding senior notes, including the estimated fair value of the Company's convertible senior notes.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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