Fair Value Measurement of Assets and Liabilities (Tables)

6 Months Ended

Jun. 30, 2024

Schedule of Fair Value of Assets and Liabilities Measured on a Recurring Basis

The following tables present our financial assets and liabilities measured at fair value on a recurring basis as of the dates indicated (in millions):


	June 30, 2024		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash, cash equivalents and restricted cash
Cash and cash equivalents	$	1,963	$	1,963	$	—	$	—
Customer accounts	478		478		—		—
Restricted cash included in other current assets	112		112		—		—
Restricted cash included in other assets	2		2		—		—
Total cash, cash equivalents and restricted cash	2,555		2,555		—		—

Derivatives	380		—		41		339
Short-term investments:
Corporate debt securities	2,749		—		2,749		—
Government and agency securities	454		—		454		—


Total short-term investments	3,203		—		3,203		—
Long-term investments:
Corporate debt securities	770		—		770		—
Government and agency securities	409		—		409		—
Equity investment under the fair value option	307		—		—		307
Total long-term investments	1,486		—		1,179		307
Total financial assets	$	7,624	$	2,555	$	4,423	$	646

Liabilities:
Aurelia option	$	109	$	—	$	—	$	109

Derivatives	$	10	$	—	$	10	$	—


	December 31, 2023		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash, cash equivalents and restricted cash
Cash and cash equivalents	$	1,985	$	1,985	$	—	$	—
Customer accounts	481		481		—		—
Restricted cash included in other current assets	23		23		—		—
Restricted cash included in other assets	4		4		—		—
Total cash, cash equivalents and restricted cash	2,493		2,493		—		—
Equity investment in Adevinta	4,474		4,474		—		—
Derivatives	396		—		32		364
Short-term investments:
Corporate debt securities	2,162		—		2,162		—
Government and agency securities	371		—		371		—


Total short-term investments	2,533		—		2,533		—
Long-term investments:
Corporate debt securities	328		—		328		—
Government and agency securities	271		—		271		—
Equity investment under the fair value option	335		—		—		335
Total long-term investments	934		—		599		335
Total financial assets	$	10,830	$	6,967	$	3,164	$	699

Liabilities:
Other liabilities	$	10	$	—	$	—	$	10
Derivatives	$	33	$	—	$	33	$	—

Schedule of Assets Measured Using Significant Unobservable Inputs

The following table presents a reconciliation of the opening to closing balance of assets measured using significant unobservable inputs (Level 3) as of the dates indicated (in millions):


	June 30, 2024		December 31, 2023
Opening balance at beginning of period	$	364	$	214

Change in fair value	(25)		150
Closing balance at end of period	$	339	$	364

The following table presents quantitative information about Level 3 significant unobservable inputs used in the fair value measurement of the warrant as of June 30, 2024 (in millions, except percentages):

Fair value

Valuation technique

Unobservable Input (1)

Range (weighted average)

Warrant

339

Black-Scholes and Monte Carlo

Probability of vesting

0.0% - 95.0% (78.4%)

Equity volatility

(44%)

(1) Probability of vesting was weighted by the unadjusted value of the tranches. For volatility, the average represents the arithmetic average of the points within the range and is not weighted by the relative fair value or notional amount.

The following table presents a reconciliation of the opening to closing balance of the equity investment in Gmarket measured using significant unobservable inputs (Level 3) as of the dates indicated (in millions):


	June 30, 2024		December 31, 2023
Opening balance at beginning of period	$	335	$	431

Change in fair value	(28)		(96)
Closing balance at end of period	$	307	$	335

The following table presents quantitative information about Level 3 significant unobservable inputs used in the fair value measurement of the equity investment in Gmarket as of June 30, 2024 that may have a significant impact on the overall valuation (in millions, except multiples):

Fair value

Valuation technique

Unobservable Input (1)

Range

Equity investment in Gmarket

307

Market multiples

Revenue multiple — GPC method

0.7x — 1.7x

Revenue multiple — GMAC method

1.0x — 2.7x

(1) The primary unobservable inputs used in the fair value measurement of our equity investment in Gmarket under the fair value option, when using the Guideline Public Company (GPC) method and the Guideline Merged and Acquired Company (GMAC) method under the market multiple approach, are the respective revenue multiples. Significant increases (decreases) in the revenue multiples in isolation would result in significantly higher (lower) fair value measurement. The market multiples are derived from respective groups of guideline public companies and guideline merged and acquired companies.

- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

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