XML 24 R12.htm IDEA: XBRL DOCUMENT

FINANCIAL INSTRUMENTS

6 Months Ended

Jun. 30, 2022

NOTE 4—FINANCIAL INSTRUMENTS

Equity securities without readily determinable fair values

At both June 30, 2022 and December 31, 2021, the carrying value of the Company’s investments in equity securities without readily determinable fair values totaled $14.2 million, and is included in “Other non-current assets” in the accompanying consolidated balance sheet. The cumulative downward adjustments (including impairments) to the carrying value of equity securities without readily determinable fair values through June 30, 2022 were $2.1 million. For both the six months ended June 30, 2022 and 2021, there were no adjustments to the carrying value of equity securities without readily determinable fair values.

For all equity securities without readily determinable fair values as of June 30, 2022 and December 31, 2021, the Company has elected the measurement alternative. For the three and six months ended June 30, 2022 and 2021, under the measurement alternative election, the Company did not identify any fair value adjustments using observable price changes in orderly transactions for an identical or similar investment of the same issuer.

Fair Value Measurements

The Company categorizes its financial instruments measured at fair value into a fair value hierarchy that prioritizes the inputs used in pricing the asset or liability. The three levels of the fair value hierarchy are:

•Level 1: Observable inputs obtained from independent sources, such as quoted market prices for identical assets and liabilities in active markets.

•Level 2: Other inputs, which are observable directly or indirectly, such as quoted market prices for similar assets or liabilities in active markets, quoted market prices for identical or similar assets or liabilities in markets that are not active, and inputs that are derived principally from or corroborated by observable market data. The fair values of the Company’s Level 2 financial assets are primarily obtained from observable market prices for identical underlying securities that may not be actively traded. Certain of these securities may have different market prices from multiple market data sources, in which case an average market price is used.

•Level 3: Unobservable inputs for which there is little or no market data and require the Company to develop its own assumptions, based on the best information available in the circumstances, about the assumptions market participants would use in pricing the assets or liabilities.

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


	June 30, 2022
	Quoted Market Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Total Fair Value Measurements

	(In thousands)
Assets:
Cash equivalents:
Money market funds	$	1,355	$	—	$	1,355
Time deposits	—		126,496		126,496
Short-term investments:
Time deposits	—		9,240		9,240
Total	$	1,355	$	135,736	$	137,091


	December 31, 2021
	Quoted Market Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Total Fair Value Measurements

	(In thousands)
Assets:
Cash equivalents:
Money market funds	$	260,582	$	—	$	260,582
Time deposits	—		36,831		36,831
Short-term investments:
Time Deposits	—		11,818		11,818
Total	$	260,582	$	48,649	$	309,231

Assets measured at fair value on a nonrecurring basis

The Company’s non-financial assets, such as goodwill, intangible assets, property and equipment, and right-of-use assets, are adjusted to fair value only when an impairment charge is recognized. The Company’s financial assets, comprised of equity securities without readily determinable fair values, are adjusted to fair value when observable price changes are identified or an impairment charge is recognized. Such fair value measurements are based predominantly on Level 3 inputs.

During the second quarter of 2022, the Company recorded an impairment charge of $217.4 million, which is included within impairment and amortization of intangibles, on trade names and technology intangible assets associated with the Hyperconnect acquisition. The Company used avoided royalty discounted cash flow (“DCF”) valuations for the various intangibles to determine the current fair value of these intangible assets at June 30, 2022. Our expectations of future revenues and cash flows of Hyperconnect have declined since the time of the acquisition, including impacts of unfavorable foreign currency exchange rate changes in certain of Hyperconnect’s key markets. Additionally, the discount rates used in the valuations have increased since the time of the Hyperconnect acquisition, further negatively impacting the fair value of these intangible assets.

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.


	June 30, 2022				December 31, 2021
	Carrying Value		Fair Value		Carrying Value		Fair Value

	(In thousands)
Current maturities of long-term debt (a) (b) (c)	$	(45,110)	$	(92,998)	$	(84,333)	$	(254,472)
Long-term debt, net (b) (c)	$	(3,832,534)	$	(3,642,506)	$	(3,829,421)	$	(4,772,140)

______________________

(a)At June 30, 2022 and December 31, 2021, the carrying value excludes $13.7 million and $15.6 million, respectively, of aggregate principal amount of the exchanged 2022 Exchangeable Notes (described in “Note 5—Long-term Debt, net”) as those amounts are carried at fair value.

(b)At June 30, 2022 and December 31, 2021, the carrying value of current maturities of long-term debt, net includes unamortized debt issuance costs of $0.1 million and $0.6 million, respectively. At June 30, 2022 and December 31, 2021, the carrying value of long-term debt, net includes unamortized original issue discount and debt issuance costs of $42.5 million and $45.6 million, respectively.

(c)At June 30, 2022, the fair value of the 2022 Exchangeable Notes, 2026 Exchangeable Notes, and 2030 Exchangeable Notes (described in “Note 5—Long-term Debt, net”) is $93.0 million, $603.6 million, and $626.5 million, respectively. At December 31, 2021, the fair value of the 2022 Exchangeable Notes, 2026 Exchangeable Notes, and 2030 Exchangeable Notes is $302.2 million, $932.6 million, and $1,017.7 million, respectively.

At June 30, 2022 and December 31, 2021, the fair value of long-term debt, net, is estimated using observable market prices or indices for similar liabilities, which are Level 2 inputs.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details