INVESTMENTS AND FAIR VALUE MEASUREMENTS

6 Months Ended

Jun. 30, 2022

Investments

Available-for-sale Investments

The Company's short-term available-for-sale debt investments are measured to fair value on a recurring basis. Unrealized gains and losses related to the Company’s short-term investments are recorded in Other comprehensive loss and are generally due to interest rate fluctuations. The securities that are in an unrealized loss position are reviewed on an individual basis in order to evaluate if all or a portion of the unrealized loss is a result of a credit loss. For impairment indicators due to credit loss factors, the Company establishes an allowance for credit losses with a charge to current period net income. See Note 5 for additional information regarding the credit losses for available-for-sale investments. As of June 30, 2022 and December 31, 2021, unrealized gains and losses from the Company’s available-for-sale investments were not material and the amortized cost approximated their fair value. For the three and six months ended June 30, 2022 and 2021, realized gains and losses on available-for-sale investments were not material.

The average remaining maturities of the Company’s short-term available-for-sale investments at June 30, 2022 were approximately five months. As of June 30, 2022, the Company does not hold long-term available-for-sale investments.

For the three and six months ended June 30, 2022, the Company received $13.0 million from the sales of available-for-sale investments. For the three and six months ended June 30, 2021, the Company did not receive any proceeds from the sales of available-for-sale investments.

Equity Securities Accounted for at Net Asset Value

The Company held equity interests in certain private equity funds of $16.6 million and $21.5 million as of June 30, 2022 and December 31, 2021, respectively, which are accounted for under the net asset value practical expedient. These investments are included in Other assets in the accompanying condensed consolidated balance sheets. The net asset value of these investments is determined using quarterly capital statements from the funds, which are based on the Company’s contributions to the funds, allocation of profit and loss and changes in fair value of the underlying fund investments. These private equity funds focus on making venture capital investments, principally by investing in equity securities of early and late stage privately-held corporations. The funds’ general partner shall determine the amount, timing and form (whether cash or in kind) of all distributions made by the funds. The Company may only transfer its investments in private equity fund interests subject to the general partner’s written consent and cannot trade its fund interests in established securities markets, secondary markets or equivalents thereof. The Company had no unfunded commitments as of June 30, 2022.

Equity Securities without Readily Determinable Fair Values

The Company held direct investments in privately-held companies of $24.3 million and $24.4 million as of June 30, 2022 and December 31, 2021, respectively, which are accounted for at cost, less impairment plus or minus adjustments resulting from observable price changes in orderly transactions for an identical or a similar investment of the same issuer. These investments are included in Other assets in the accompanying condensed consolidated balance sheets. The Company periodically reviews these investments for impairment and observable price changes on a quarterly basis and adjusts the carrying value accordingly.

Assets and Liabilities Measured at Fair Value on a Recurring Basis


	As of June 30, 2022		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In thousands)
Assets:
Cash and cash equivalents:

Cash	$	453,260	$	453,260	$	—	$	—

Money market funds	412,337		412,337		—		—


Available-for-sale securities:

Corporate securities	7,202		—		6,702		500


Prepaid expenses and other current assets:
Foreign currency derivatives	13,745		—		13,745		—
Total assets	$	886,544	$	865,597	$	20,447	$	500
Accrued expenses and other current liabilities:
Foreign currency derivatives	4,014		—		4,014		—
Total liabilities	$	4,014	$	—	$	4,014	$	—


	As of December 31, 2021		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In thousands)
Assets:
Cash and cash equivalents:
Cash	$	425,650	$	425,650	$	—	$	—
Money market funds	70,893		70,893		—		—

Corporate securities	17,450		—		17,450		—

Available-for-sale securities:

Corporate securities	27,940		—		27,440		500


Prepaid expenses and other current assets:
Foreign currency derivatives	741		—		741		—
Total assets	$	542,674	$	496,543	$	45,631	$	500
Accrued expenses and other current liabilities:
Foreign currency derivatives	1,531		—		1,531		—
Total liabilities	$	1,531	$	—	$	1,531	$	—

The Company’s investment policy is designed to limit exposure to any one issuer depending on credit quality. The Company’s fixed income available-for-sale security portfolio generally consists of investment grade securities from diverse issuers with a minimum credit rating of A-/A3 and a weighted-average credit rating of AA-/Aa3. The Company values these securities based on pricing from the Service, whose sources may use quoted prices in active markets for identical assets (Level 1 inputs) or inputs other than quoted prices that are observable either directly or indirectly (Level 2 inputs) in determining fair value, and accordingly, the Company classifies the majority of its fixed income available-for-sale securities as Level 2.

The Company measures its cash flow hedges, which are classified as Prepaid expenses and other current assets and Accrued expenses and other current liabilities, at fair value based on indicative prices in active markets (Level 2 inputs). See Note 12 for further information regarding the Company's derivatives.

Additional Disclosures Regarding Fair Value Measurements

The carrying value of accounts receivable, accounts payable and accrued expenses approximate their fair value due to the short maturity of these items.

As of June 30, 2022, the fair values of the $750.0 million unsecured senior notes due March 1, 2030 (the “2030 Notes”), $750.0 million unsecured senior notes due December 1, 2027 (the “2027 Notes”), $750.0 million 2026 Notes, $1.00 billion term loan credit agreement entered into in 2021 (the “2021 Term Loan Credit Agreement”) and $100 million term loan credit agreement entered into in 2020 (“Term Loan Credit Agreement”) were determined based on inputs that are observable in the market (Level 2). Based on the closing trading price per $100 as of the last day of trading for the quarter ended June 30, 2022, the carrying value was as follows (in thousands):


	Fair Value		Carrying Value
2030 Notes	$	732,923	$	740,878
2027 Notes	$	739,958	$	745,153
2026 Notes	$	725,108	$	743,724
2021 Term Loan Credit Agreement	$	948,130	$	998,863
Term Loan Credit Agreement	$	99,625	$	99,965

See Note 11 for more information on the Company's debt instruments.