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Equity Method Investments | 3 Months Ended
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Mar. 31, 2022
Equity Method Investments and Joint Ventures [Abstract] |
Equity Method Investments | Note 4 – Equity Method Investments The carrying value of our equity method investments were as follows (in millions):
|  | As of
|  | December 31, 2021 |  | March 31, 2022
MLU B.V. |  | $ | 751 |  |  | $ | 574 |
Mission Bay 3 & 4 |  | 38 |  |  | 37 |
Other |  | 11 |  |  | 13 |
Total equity method investments |  | $ | 800 |  |  | $ | 624 |
MLU B.V. Investment We reviewed for impairment whenever factors indicate that the carrying value of the equity method investment may not be recoverable. During the three months ended March 31, 2022, we determined that our investment in MLU B.V. was other-than-temporarily impaired, and recorded an impairment charge of $182 million in other income (expense), net in the condensed consolidated statement of operations. The impairment was primarily due to consensus projections of a protracted recession of the Russian economy as a result of Russia's invasion of Ukraine. To determine the fair value of our investment in MLU B.V., we utilized a market approach referencing revenue multiples from publicly traded peer companies. MLU B.V. Basis Difference Included in the carrying value of MLU B.V. is the basis difference, net of amortization, between the original cost of the investment and our proportionate share of the net assets of MLU B.V. The carrying value of the equity method investment is primarily adjusted for our share in the income or losses of MLU B.V. on a one-quarter lag basis and amortization of basis differences. Equity method goodwill and intangible assets, net of accumulated amortization are also adjusted for currency translation adjustments representing fluctuations between the functional currency of the investee, the Ruble and the U.S. Dollar. The Ruble depreciated against the U.S. dollar by approximately 15% between December 31, 2021 and March 31, 2022. The movement in exchange rates will be reflected in the carrying value of the investment with a corresponding adjustment to other comprehensive income (loss) in our condensed consolidated financial statements at June 30, 2022, as we record our share of MLU B.V.’s earnings and reflect our share of MLU B.V.'s net assets on a one-quarter lag basis. The table below provides the composition of the basis difference (in millions):
|  | As of March 31, 2022
Equity method goodwill |  | $ | 320 |
Intangible assets, net of accumulated amortization |  | 48 |
Deferred tax liabilities |  | (13) |
Cumulative currency translation adjustments |  | (70) |
Basis difference |  | $ | 285 |
We amortize the basis difference related to the intangible assets over the estimated useful lives of the assets that gave rise to the difference using the straight-line method. The weighted-average life of the intangible assets is ap proximately 3.1 years as of March 31, 2022. Equity method goodwill is not amortized. MLU B.V. Call Option On August 30, 2021, we granted Yandex an option (“MLU B.V. Call Option”) to acquire our remaining equity interest in MLU B.V. during a two-year period as part of the agreement with Yandex to restructure our joint ventures in 2021. The MLU B.V. Call Option is recorded as a liability in accrued and other current liabilities on our condensed consolidated balance sheets and measured at fair value on a recurring basis with changes in fair value recorded in other income (expense), net in the condensed consolidated statements of operations. The exercise price of the MLU B.V. Call Option is approximately $1.8 billion, subject to certain adjustments based on the timing of the option exercise. As of December 31, 2021, the fair value of the MLU B.V. Call Option is $193 million. To determine the fair value of the MLU B.V. Call Option as of December 31, 2021, we used a lattice model which simulated multiple scenarios of the exercise behaviors and the corresponding strike prices over the term of the call option. Key inputs to the lattice model were: the underlying business value; option term of 1.7 years; volatility of 50%; risk-free interest rates; and strike price (Level 3). As of March 31, 2022, the fair value of the MLU B.V. Call Option is $12 million, including the recognition of a $181 million gain for the fair value change during the three months ended March 31, 2022. To determine the fair value of the MLU B.V. Call Option as of March 31, 2022, we used a lattice model which simulated multiple scenarios of the exercise behaviors and the corresponding strike prices over the term of the call option. Key inputs to the lattice model were: the underlying business value, which decreased significantly due to the conflict between Russia and Ukraine; option term of 1.4 years; volatility of 65%; risk-free interest rates; and strike price (Level 3).

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- Definition The entire disclosure for equity method investments and joint ventures. Equity method investments are investments that give the investor the ability to exercise significant influence over the operating and financial policies of an investee. Joint ventures are entities owned and operated by a small group of businesses as a separate and specific business or project for the mutual benefit of the members of the group. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -URI http://asc.fasb.org/topic&trid=2196965 + Details
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