TripAdvisor 2013 Annual Report Download - page 102

our long-term marketable securities range from one to three years and our short-term marketable securities
include maturities that were greater than 90 days at the date purchased and have 12 months or less remaining at
December 31, 2013 and 2012, respectively.
We classify our cash equivalents and marketable securities within Level 1 and Level 2 as we value our cash
equivalents and marketable securities using quoted market prices (Level 1) or alternative pricing sources
(Level 2). The valuation technique we used to measure the fair value of money market funds were derived from
quoted prices in active markets for identical assets or liabilities. Fair values for Level 2 investments are
considered “Level 2” valuations because they are obtained from independent pricing sources for identical or
comparable instruments, rather than direct observations of quoted prices in active markets. Our procedures
include controls to ensure that appropriate fair values are recorded, including comparing the fair values obtained
from our independent pricing services against fair values obtained from another independent source.
There were no material realized gains or losses related to sales of our marketable securities for the years
ended December 31, 2013, 2012 and 2011.
As of December 31, 2013, we have marketable securities with a total fair value of $168.8 million in a total
gross unrealized loss position of $0.3 million. We consider the declines in market value of our marketable
securities investment portfolio to be temporary in nature and do not consider any of our investments other-than-
temporarily impaired. When evaluating an investment for other-than-temporary impairment, we review factors
such as the length of time and extent to which fair value has been below its cost basis, the financial condition of
the issuer and any changes thereto, and the our intent to sell, or whether it is more likely than not we will be
required to sell the investment before recovery of the investment’s cost basis. During the years ended
December 31, 2013, 2012 and 2011, we did not recognize any impairment charges. We did not have any material
investments in marketable securities that were in a continuous unrealized loss position for 12 months or greater at
December 31, 2013 or 2012.
Derivative Financial Instruments
In the normal course of business, we are exposed to the impact of foreign currency fluctuations, which we
attempt to mitigate through the use of derivative instruments. Accordingly, we have entered into forward
contracts to reduce the effects of fluctuating foreign currency exchange rates on our cash flows denominated in
foreign currencies. We do not use derivatives for trading or speculative purposes. In accordance with current
accounting guidance on derivative instruments and hedging activities, we record all our derivative instruments as
either an asset or liability measured at their fair value. Our derivative instruments are typically short-term in
nature.
Our current forward contracts are not designated as hedges. Consequently, any gain or loss resulting from
the change in fair value is recognized in the current period earnings. These gains or losses are offset by the
exposure related to receivables and payables with our foreign subsidiaries. We recorded a net loss of $0.3 million
and $0.7 million for the years ended December 31, 2013 and 2012, respectively, related to our forward contracts
in our consolidated statements of operations in Other, net. The net cash received or paid related to our derivative
instruments are classified as operating in our consolidated statements of cash flows, which is based on the
objective of the derivative instruments. No derivative instruments were entered into or settled during the year
ended December 31, 2011.
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