Fair Value Measurements

9 Months Ended

Sep. 30, 2020

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

The FASB literature regarding fair value measurements for certain assets and liabilities establishes a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires entities to maximize the use of “observable inputs” and minimize the use of “unobservable inputs.” The three levels of inputs used to measure fair value are as follows:

•Level 1—Quoted prices in active markets for identical assets or liabilities;

•Level 2—Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities in active markets or other inputs that are observable or can be corroborated by observable market data; and

•Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities, including certain pricing models, discounted cash flow methodologies, and similar techniques that use significant unobservable inputs.

Fair Value Measurements on a Recurring Basis

The table below segregates all of our financial assets and liabilities that are measured at fair value on a recurring basis into the most appropriate level within the fair value hierarchy based on the inputs used to determine the fair value at the measurement date (amounts in millions):

			Fair Value Measurements at September 30, 2020 Using
	As of September 30, 2020		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance Sheet Classification
Financial Assets:
Recurring fair value measurements:
Money market funds	$	7,121	$	7,121	$	—	$	—	Cash and cash equivalents
Foreign government treasury bills	33		33		—		—		Cash and cash equivalents
U.S. treasuries and government agency securities	187		187		—		—		Other current assets
Total recurring fair value measurements	$	7,341	$	7,341	$	—	$	—
Financial Liabilities:
Foreign currency forward contracts not designated as hedges	$	(1)	$	—	$	(1)	$	—	Accrued expenses and other liabilities
Foreign currency forward contracts designated as hedges	$	(18)	$	—	$	(18)	$	—	Accrued expenses and other liabilities

			Fair Value Measurements at December 31, 2019 Using
	As of December 31, 2019		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance Sheet Classification
Financial Assets:
Recurring fair value measurements:
Money market funds	$	5,320	$	5,320	$	—	$	—	Cash and cash equivalents
Foreign government treasury bills	37		37		—		—		Cash and cash equivalents
U.S. treasuries and government agency securities	65		65		—		—		Other current assets
Total recurring fair value measurements	$	5,422	$	5,422	$	—	$	—
Financial Liabilities:
Foreign currency forward contracts not designated as hedges	$	(2)	$	—	$	(2)	$	—	Accrued expenses and other liabilities
Foreign currency forward contracts designated as hedges	$	(2)	$	—	$	(2)	$	—	Accrued expenses and other liabilities

Foreign Currency Forward Contracts

Foreign Currency Forward Contracts Designated as Hedges (“Cash Flow Hedges”)

The total gross notional amounts and fair values of our Cash Flow Hedges, all of which have remaining maturities of 13 months or less as of September 30, 2020, are as follows (amounts in millions):

	As of September 30, 2020				As of December 31, 2019
	Notional amount		Fair value gain (loss)		Notional amount		Fair value gain (loss)
Foreign Currency:
Buy USD, Sell Euro	$	608	$	(18)	$	350	$	(2)

The amount of pre-tax net realized gains (losses) associated with our Cash Flow Hedges that were reclassified out of “Accumulated other comprehensive income (loss)” and into earnings was as follows (amounts in millions):

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,				Statement of Operations Classification
	2020		2019		2020		2019
Cash Flow Hedges	$	(5)	$	7	$	7	$	24	Net revenues

Foreign Currency Forward Contracts Not Designated as Hedges

The gross notional amounts and fair values of our foreign currency forward contracts not designated as hedges are as follows (amounts in millions):

	As of September 30, 2020				As of December 31, 2019
	Notional amount		Fair value gain (loss)		Notional amount		Fair value gain (loss)
Foreign Currency:
Buy USD, Sell GBP	$	61	$	(1)	$	25	$	(2)

For the three and nine months ended September 30, 2020 and 2019, pre-tax net gains (losses) associated with these forward contracts were recorded in “General and administrative expenses” and were not material.