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Investments
9 Months Ended
Sep. 30, 2021
Investments [Abstract]  
Investments
We hold equity investments in publicly traded companies and privately held entities primarily involved in the life science, agtech, and technology industries. Our accounting for non-real estate investments is summarized below. Refer to the “Investments” section in Note 2 – “Summary of significant accounting policies” to our unaudited consolidated financial statements for additional information.

Investments in publicly traded companies

Our investments in publicly traded companies are classified as investments with readily determinable fair values and are presented at fair value in our consolidated balance sheets, with changes in fair value classified in investment income in our consolidated statements of operations.

Investments in privately held companies

Our investments in privately held entities consist of (i) investments in privately held entities that report NAV and (ii) investments in privately held entities that do not report NAV. These investments are accounted for as follows:

Investments in privately held entities that report NAV

Investments in entities that report NAV, such as our privately held investments in limited partnerships, are presented at fair value using NAV as a practical expedient, with changes in fair value recognized in net income. We use NAV reported by limited partnerships generally without adjustment, unless we are aware of information indicating that the NAV reported by a limited partnership does not accurately reflect the fair value of the investment at our reporting date.

Investments in privately held entities that do not report NAV

Investments in privately held entities that do not report NAV are carried at cost, adjusted for observable price changes and impairments, with changes recognized in net income. An observable price arises from an orderly transaction for an identical or similar investment of the same issuer. Observable price changes result from, among other things, equity transactions of the same issuer executed during the reporting period, including subsequent equity offerings or other reported equity transactions related to the same issuer. To determine whether these transactions are indicative of an observable price change, we evaluate, among other factors, whether these transactions have similar rights and obligations, including voting rights, distribution preferences, and conversion rights to the investments we hold.
These investments continue to be evaluated on the basis of a qualitative assessment for indicators of impairment by utilizing the monitoring criteria described in the “Investments” section in Note 2 – “Summary of significant accounting policies” to our unaudited consolidated financial statements, and by monitoring the presence of the following impairment indicators:

(i)a significant deterioration in the earnings performance, credit rating, asset quality, or business prospects of the investee;
(ii)a significant adverse change in the regulatory, economic, or technological environment of the investee;
(iii)a significant adverse change in the general market condition of either the geographical area or the industry in which the investee operates; and/or
(iv)significant concerns about the investee’s ability to continue as a going concern.

If such indicators are present, we are required to estimate the investment’s fair value and immediately recognize an impairment charge in an amount equal to the investment’s carrying value in excess of its estimated fair value.

Investments accounted for under the equity method

We account for our investments under the equity method whenever we are deemed to have significant influence over the investee’s operating and financial policies. Under the equity method of accounting, we initially recognize our investment at cost and subsequently adjust the carrying amount of the investment for our share of the investee’s earnings or losses, distributions received, and other-than-temporary impairments. Refer to the “Investments” section within Note 2 – “Summary of significant accounting policies” to our unaudited consolidated financial statements for additional information on the criteria used to determine whether an investment should be accounted for under the equity method, and for our impairment assessment of our equity method investments.

As of September 30, 2021, we had five investments in privately held entities aggregating $75.2 million accounted for under the equity method. Our ownership interest in each of our investments accounted for under the equity method of accounting is less than 20%. Our equity in earnings or losses of our equity method investees is recognized in each period for which these earnings or losses are reported by the investee, and is classified within investment income in our consolidated statements of operations.

Investment income/loss recognition and classification

We classify unrealized and realized gains and losses on our investments within investment income in our consolidated statements of operations. Unrealized gains and losses represent:

(i)changes in fair value for investments in publicly traded companies;
(ii)changes in NAV as a practical expedient to estimate fair value for investments in privately held entities that report NAV;
(iii)observable price changes for investments in privately held entities that do not report NAV; and
(iv)our share of unrealized gains or losses reported by our equity method investees.

Realized gains and losses on our investments represent the difference between proceeds received upon disposition of investments and their historical or adjusted cost. For our equity method investments, realized gains and losses represent our share of realized gains or losses reported by the investee. Impairments are realized losses, which result in an adjusted cost, and represent charges to reduce the carrying values of investments in privately held entities that do not report NAV per share and equity method investments, if impairments are deemed other than temporary, to their estimated fair value.
The following tables summarize our investments as of September 30, 2021, and December 31, 2020 (in thousands):
September 30, 2021
CostUnrealized
Gains (Losses)
Carrying Amount
Publicly traded companies$282,816 $374,515 $657,331 
Entities that report NAV355,400 480,412 835,812 
Entities that do not report NAV:
Entities with observable price changes 54,562 74,906 129,468 
Entities without observable price changes349,100 — 349,100 
$1,041,878 $929,833 1,971,711 
Investments accounted for under the equity method75,167 
Total investments$2,046,878 

December 31, 2020
CostUnrealized
Gains (Losses)
Carrying Amount
Publicly traded companies$208,754 $351,076 $559,830 
Entities that report NAV334,341 327,741 662,082 
Entities that do not report NAV:
Entities with observable price changes47,545 96,859 144,404 
Entities without observable price changes244,798 — 244,798 
Total investments$835,438 $775,676 $1,611,114 

Cumulative gains and losses (realized and unrealized) on investments in privately held entities that do not report NAV still held as of September 30, 2021, aggregated to a gain of $34.5 million, which consisted of upward adjustments of $75.8 million, downward adjustments of $0.9 million, and impairments of $40.4 million.

Our investment income for the three and nine months ended September 30, 2021 and 2020, consisted of the following (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2021202020212020
Realized gains$81,516 $17,361 $189,013 $25,689 
Unrealized (losses) gains(14,432)(14,013)183,348 140,495 
Investment income$67,084 $3,348 $372,361 $166,184 

During the nine months ended September 30, 2021, gains and losses on investments in privately held entities that do not report NAV still held at September 30, 2021, aggregated to a loss of $28.0 million, which consisted of upward adjustments of $29.9 million and downward adjustments primarily related to observable prices changes aggregating $57.9 million.

During the nine months ended September 30, 2020, gains and losses on investments in privately held entities that do not report NAV still held at September 30, 2020, aggregated to a loss of $17.3 million, which consisted of downward adjustments and impairments of $25.8 million and upward adjustments of $8.5 million.

Unrealized gains and losses related to investments still held at September 30, 2021 and 2020, aggregated to gains of $231.5 million and gains of $151.7 million during the nine months ended September 30, 2021 and 2020, respectively.

Our investment income for the three and nine months ended September 30, 2021, also included $12.5 million of equity in earnings of our equity method investments.

Refer to the “Investments” section in Note 2 – “Summary of significant accounting policies” to our unaudited consolidated financial statements for additional information.
Commitments on investments in privately held entities that report NAV

We are committed to funding approximately $345.8 million for all investments in privately held entities that report NAV. Our funding commitments expire at various dates over the next 12 years, with a weighted-average expiration of 8.9 years as of September 30, 2021. These investments are not redeemable by us, but we may receive distributions from these investments throughout their term. Our investments in privately held entities that report NAV generally have expected initial terms in excess of 10 years. The weighted-average remaining term during which these investments are expected to be liquidated was 5.0 years as of September 30, 2021.