The following table shows our marketable securities, by consolidated balance sheet classification and major security type, that are measured at fair value on a recurring basis and were categorized using the fair value hierarchy, as well as their classification on our consolidated balance sheet, as of the periods presented (in millions):

	December 31, 2018
	Total Amortized		Total Fair		Cash and Cash		Short-Term Marketable
	Cost		Value (1)		Equivalents		Securities
Level 1:
Money market funds	$	128	$	128	$	128		—
Level 2:
Commercial paper		20		20		5		15
Total	$	148	$	148	$	133	$	15

Our cash equivalents consist of money market funds and other marketable securities, with maturities of 90 days or less at the date of purchase. Our short-term marketable securities include maturities that were greater than 90 days at the date purchased and had 12 months or less remaining at December 31, 2018.

We classify our marketable securities within Level 1 and Level 2 as we value these financial instruments using quoted market prices (Level 1) or alternative pricing sources (Level 2). The valuation technique we used to measure the fair value of money market funds was derived from quoted prices in active markets for identical assets or liabilities. Fair values for Level 2 marketable securities are considered “Level 2” valuations because they are obtained from independent pricing sources for identical or comparable instruments, rather than direct observations of quoted prices in active markets. Our procedures include controls to ensure that appropriate fair values are

recorded, including comparing the fair values obtained from our independent pricing services against fair values obtained from another independent source.

There were no material realized gains or losses related to sales of our marketable securities for the years ended December 31, 2019, 2018 and 2017.

In November 2019, the Company and Ctrip Investment Holding Ltd, a majority-owned subsidiary of Trip.com Group Limited, entered into an agreement to combine certain assets in China through the creation of a new entity, Chelsea Investment Holding Company PTE, Ltd. Tripadvisor contributed a portion of its business in China, to Chelsea Investment Holding Company PTE, Ltd, including a long-term exclusive brand and content license and other assets, in return for a 40% equity ownership interest in Chelsea Investment Holding Company PTE, Ltd. This investment resulted in the Company recording an initial equity method investment of $41 million, included in non-marketable investments on our consolidated balance sheet as of December 31, 2019, and a $39 million deferred income liability attributable to the brand and content license, included in accrued expenses and other current liabilities and other long-term liabilities on our consolidated balance sheet of $3 million and $36 million, respectively as of December 31, 2019. The Company expects to earn the deferred income ratably over a 15-year period, congruent with the initial term of the brand and content license, presented in other income (expense), net on the consolidated statement of operations. The investment is being accounted for as an equity method investment as the Company determined it has the ability to exercise significant influence over the investee.

We hold investments in equity securities of privately-held companies, which are typically at an early stage of development and do not have a readily determinable fair value. As of December 31, 2019 and 2018, the total carrying value of these investments was $14 million and $12 million, respectively, and included in non-marketable investments on our consolidated balance sheet. Our policy is to measure these investments at cost less impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer such observable price changes may include instances where the investee issues equity securities to new investors, thus creating a new indicator of fair value, as an example. On a quarterly basis, we perform a qualitative assessment considering impairment indicators to evaluate whether these investments are impaired and also monitor for any observable price changes. The Company determined that no changes were required to the carrying value of these equity investments at December 31, 2019 and 2018 and recognized a loss of $2 million related to an equity investment during the year ended December 31, 2017 in other income (expense), net on our consolidated statements of operations.

We generally use forward contracts to reduce the effects of foreign currency exchange rate fluctuations on our cash flows primarily for the Euro versus the U.S. Dollar. For the periods ended December 31, 2019, 2018 and 2017, respectively, our forward contracts have not been designated as hedges and generally had maturities of less than 90 days. Our outstanding or unsettled forward contracts are carried at fair value on our consolidated balance sheets at December 31, 2019 and 2018. We measure the fair value of our outstanding or unsettled derivatives using Level 2 fair value inputs, as we use a pricing model that takes into account the contract terms as well as current foreign currency exchange rates in active markets. We recognize any gain or loss resulting from the change in fair value of our foreign currency forward contracts in other income (expense), net on our consolidated statement of operations. We recorded a net gain of $1 million for the year ended December 31, 2019, a net loss of $3 million for the year ended December 31, 2018, and was not material for the year ended December 31, 2017, respectively, related to our forward contracts.

The following table shows the notional principal amounts of our outstanding derivative instruments for the periods presented:

Other financial instruments not measured at fair value on a recurring basis include accounts receivable and contract assets, accounts payable, deferred merchant payables, short-term debt, accrued expenses and other current liabilities. The carrying amount of these financial instruments approximate their fair value because of the short maturity of these instruments as reported on our consolidated balance sheets as of December 31, 2019 and December 31, 2018, respectively.

The Company did not have any material assets or liabilities measured at fair value on a recurring basis using Level 3 unobservable inputs at both December 31, 2019 and December 31, 2018.