FINANCIAL INSTRUMENTS

Marketable Securities

At December 31, 2018 and 2017, the fair value of marketable securities are as follows:



	December 31,
	2018		2017
	(In thousands)
Available-for-sale marketable debt securities	$	123,246	$	4,995
Marketable equity security	419		—
Total marketable securities	$	123,665	$	4,995

At December 31, 2018, current available-for-sale marketable debt securities are as follows:



	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(In thousands)
Treasury discount notes	$	112,291	$	3	$	(3	)	$	112,291
Commercial paper	10,955		—		—			10,955
Total available-for-sale marketable debt securities	$	123,246	$	3	$	(3	)	$	123,246

The contractual maturities of debt securities classified as current available-for-sale at December 31, 2018 are within one year. There are no investments in available-for-sale marketable debt securities that have been in a continuous unrealized loss position for longer than twelve months as of December 31, 2018.

At December 31, 2017, current available-for-sale marketable debt securities are as follows:



	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(In thousands)
Commercial paper	$	4,995	$	—	$	—	$	4,995
Total available-for-sale marketable debt securities	$	4,995	$	—	$	—	$	4,995

The following table presents the proceeds from maturities and sales of available-for-sale marketable debt securities and the related gross realized gains:



	December 31,
	2018		2017		2016
	(In thousands)
Proceeds from maturities and sales of available-for-sale marketable debt securities	$	333,600	$	114,350	$	279,485
Gross realized gains	—		—		3,556

Gross realized gains from the maturities and sales of available-for-sale marketable debt securities for the year ended December 31, 2016 are included in "Other income (expense), net" in the accompanying consolidated statement of operations. There were no gross realized losses from the maturities and sales of available-for-sale marketable debt securities for the years ended December 31, 2018, 2017, and 2016.

Long-term investments

Long-term investments consist of:



	December 31,
	2018		2017
	(In thousands)
Equity securities without readily determinable fair values	$	235,055	$	—
Equity method investments	—		1,559
Cost method investments	—		63,418
Total long-term investments	$	235,055	$	64,977

Equity securities without readily determinable fair values

The following table presents a summary of realized and unrealized gains and losses recorded in other income (expense), net, as adjustments to the carrying value of equity securities without readily determinable fair values held as of December 31, 2018. The gross unrealized gains principally relate to the Company's remaining investments in an investee following the sale of a portion of the Company's investment during the second quarter of 2018.



	Year Ended December 31, 2018
	(In thousands)
Upward adjustments (gross unrealized gains)	$	128,986
Downward adjustments including impairments (gross unrealized losses)	(4,931		)
Total	$	124,055

Realized and unrealized gains and losses for the Company's marketable equity security and investments without readily determinable fair values for the year ended December 31, 2018 are as follows:



	Year Ended December 31, 2018
	(In thousands)
Realized gains, net, for equity securities sold	$	27,874
Unrealized gains, net, on equity securities held	124,170
Total gains recognized, net, in other income (expense), net	$	152,044

Equity method investments

In 2018 and 2017, the Company recorded other-than-temporary impairment charges on certain of its investments of $0.6 million and $2.7 million, respectively. These charges are included in "Other income (expense), net" in the accompanying consolidated statement of operations.

Cost method investments (prior to the adoption of ASU No. 2016-01)

In 2017 and 2016, the Company recorded $9.5 million and $10.0 million, respectively, of other-than-temporary impairment charges for certain of its investments as a result of our assessment of the near-term prospects and financial condition of the investees. These charges are included in "Other income (expense), net" in the accompanying consolidated statement of operations.

On October 23, 2017, Match Group sold a cost method investment for net proceeds of $60.2 million. The gain on sale of $9.1 million is included in "Other income (expense), net" in the accompanying consolidated statement of operations.

Fair Value Measurements

The following tables present the Company's financial instruments that are measured at fair value on a recurring basis:



	December 31, 2018
	Quoted Market Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)			Total Fair Value Measurements
	(In thousands)
Assets:
Cash equivalents:
Money market funds	$	880,815	$	—	$	—		$	880,815
Treasury discount notes	—		561,733		—			561,733
Commercial paper	—		162,417		—			162,417
Time deposits	—		90,036		—			90,036
Marketable securities:
Treasury discount notes	—		112,291		—			112,291
Commercial paper	—		10,955		—			10,955
Marketable equity security	419		—		—			419
Total	$	881,234	$	937,432	$	—		$	1,818,666

Liabilities:
Contingent consideration arrangements	$	—	$	—	$	(28,631	)	$	(28,631	)



	December 31, 2017
	Quoted Market Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)			Total Fair Value Measurements
	(In thousands)
Assets:
Cash equivalents:
Money market funds	$	780,425	$	—	$	—		$	780,425
Commercial paper	—		215,325		—			215,325
Treasury discount notes	—		100,457		—			100,457
Time deposits	—		60,000		—			60,000
Certificates of deposit	—		6,195		—			6,195
Marketable securities:
Commercial paper	—		4,995		—			4,995
Total	$	780,425	$	386,972	$	—		$	1,167,397

Liabilities:
Contingent consideration arrangements	$	—	$	—	$	(2,647	)	$	(2,647	)

The Company's financial instruments that are measured at fair value on a recurring basis using significant unobservable inputs (Level 3) are its contingent consideration arrangements.



	Contingent Consideration Arrangements
	Years Ended December 31,
	2018			2017
	(In thousands)
Balance at January 1	$	(2,647	)	$	(33,871	)
Total net (losses) gains:
Included in earnings:
Fair value adjustments	(1,456		)	(5,801		)
Included in other comprehensive income (loss)	45			(1,404		)
Fair value at date of acquisition	(25,521		)	—
Settlements	948			38,429
Balance at December 31	$	(28,631	)	$	(2,647	)

Contingent consideration arrangements

At December 31, 2018, the Company has two contingent consideration arrangements outstanding related to business acquisitions. One arrangement has a $2.0 million maximum contingent payment that has been earned and will be paid by the Company in the first quarter of 2019. The second arrangement has a total maximum contingent payment of $45.0 million. At December 31, 2018, the gross fair value of this arrangement, before unamortized discount, is $44.0 million.

The contingent consideration arrangements are based upon earnings performance and/or operating metrics. The Company generally determines the fair value of the contingent consideration arrangements by using probability-weighted analyses to determine the amounts of the gross liability, and, because the arrangements were initially long-term in nature, applying a discount rate that appropriately captures the risks associated with the obligation to determine the net amount reflected in the consolidated financial statements. The fair values of the contingent consideration arrangements at December 31, 2018 reflect discount rates ranging from 12% to 25%. The fair values of the contingent consideration arrangements at December 31, 2017 reflect discount rates of 12%.

The fair value of contingent consideration arrangements is sensitive to changes in the forecasts of earnings and/or the relevant operating metrics and changes in discount rates. The Company remeasures the fair value of the contingent consideration arrangements each reporting period, including the accretion of the discount, if applicable, and changes are recognized in "General and administrative expense" in the accompanying consolidated statement of operations. The contingent consideration arrangement liability at December 31, 2018 and 2017 includes a current portion of $2.0 million and $0.6 million, respectively, and non-current portion of $26.6 million and $2.0 million at December 31, 2018 and 2017, which are included in "Accrued expenses and other current liabilities" and "Other long-term liabilities," respectively, in the accompanying consolidated balance sheet.

Financial instruments measured at fair value only for disclosure purposes

The following table presents the carrying value and the fair value of financial instruments measured at fair value only for disclosure purposes:



	December 31, 2018						December 31, 2017
	Carrying Value			Fair Value			Carrying Value			Fair Value
	(In thousands)
Current portion of long-term debt	$	(13,750	)	$	(12,753	)	$	(13,750	)	$	(13,802	)
Long-term debt, net^(a)	(2,245,548		)	(2,460,204		)	(1,979,469		)	(2,168,108		)

_________________


^(a)	At December 31, 2018 and 2017, the carrying value of long-term debt, net includes unamortized original issue discount and debt issuance costs of $88.9 million and $109.1 million, respectively.

Excluding the MTCH Credit Facility, the fair value of long-term debt, including the current portion, is estimated using observable market prices or indices for similar liabilities, which are Level 2 inputs. The Company considers the outstanding borrowings under the MTCH Credit Facility, which has a variable interest rate, to have a fair value equal to its carrying value.